The lead story in today's Washington Post reports that the Obama Administration is willing, if necessary, to bargain away an independent, stand-alone Consumer Financial Protection Agency in exchange for prompt enactment of a law that would place a tough new regulator within a pre-existing executive department such as Treasury. As the Post report puts it:
The Obama administration is no longer insisting on the creation of a stand-alone consumer protection agency as a central element of the plan to remake regulation of the financial system. ... President Obama's economic team is now open to housing the consumer regulator inside another agency, such as the Treasury Department, though they still prefer a stand-alone agency. In either case, they are insisting on a regulator with political autonomy and real teeth so it can effectively enforce rules designed to protect consumers of mortgages, credit cards and other financial products.
It is not clear how this report jibs with the report yesterday from Washington Post columnist Steven Pearlstein that Senators Dodd and Corker are supposedly close to reaching a compromise on a financial regulation bill. Pearlstein's column could be read to indicate that the Dodd-Corker legislation would grant CFPA-type authority to a new agency or at least to a new sub-agency with an independent source of funding.
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