The administration will not approve any financial regulatory overhauls that don’t include strong protections for consumers according to Treasury Secretary Tim Geithner.
Treasury issued a statement after Geithner met with about 30 representatives of consumer organizations on Wednesday stressing the importance the administration placed on getting Congress to upgrade consumer protection in any overhaul legislation it passes.
Geithner met with 30 consumer organization representatives on Wednesday to discuss the vital protection clause in overhaul legislation. A treasury statement summarizing the meetings points read, "Strengthening consumer protection remains a central objective of our financial reform efforts… that means a dedicated authority with the independence and capacity it needs to be accountable."
The Treasury did not reveal how devoted it was to forming a stand-alone agency, an element of the plan that has been widely disapproved of by financial groups. A group of this kind was included in a plan approved by the house last year, but the opposition felt toward adding additional regulation may have dissuaded them. At present the option of such a group within the Federal Reserve, rather than as a free standing entity, is being discussed by Senate Bank Committee Chairman, Chistopher Dodd.
The Senate Banking Committee Chairman Christopher Dodd, D-Conn., and Sen. Bob Corker, R-Tenn., are trying to craft a compromise Senate bill. One proposal being considered would house the consumer agency inside the Federal Reserve. Other suggestions have been to put the consumer agency inside the Treasury Department or the Federal Deposit Insurance Agency. Whatever its status, the treasury was clear on the issue of the consumer authority having the capacity to determine and enforce rules for governance over consumer financial services.
"This approach,” the Treasury said in a statement “will strengthen consumer choice and innovation and reinforce, rather than undermine safety and soundness.”
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