WASHINGTON — An Obama administration official says the Treasury will propose the creation of a regulatory agency to protect consumers in their credit, savings and other banking transactions.
The new agency is one of the central elements of President Barack Obama’s overhaul of the financial regulatory system. The president is set to announce his broad plan on Wednesday.
The administration official described the plan on the condition of anonymity because Obama had not yet made it public.
Obama’s decision to create the agency is in response to criticism that lenders and credit card companies have taken advantage of unwitting consumers and saddled them with debt.
The new agency is likely to be one of the flash points in the administration’s proposal because many in the banking industry do not support it.
Obama said today the goal will be to fill a “series of regulatory gaps.”
He told reporters there’s been a “lack of oversight” that allowed what he termed “wild risk-taking.” He says it led to conditions that have been “very dangerous” for the American people.
Obama said rather than adding another layer of regulatory agencies, his approach will be to streamline and consolidate, and to add protections for consumers and investors. He said the new system will be more integrated than before.
Obama also said some special interests may be hoping that the administration forgets the “disaster” that he says was caused by their “reckless behavior.” He says he’s not going to let that happen — and that he wants a system in place to prevent the financial crisis from happening again.
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