|Published:||Jul 21, 2010 11:35 AM EDT|
|Updated:||Jul 21, 2010 8:36 AM EDT|
WASHINGTON (AP) - President Barack Obama aims to usher in a new
era of consumer protections and banking restrictions Wednesday,
checking off another legislative victory just before election-year
politics overtakes the rest of his major agenda.
The president was expected to sign a sweeping overhaul of
financial regulations, a signature achievement that comes nearly
two years after Wall Street's failures knocked the economy into the
worst recession since the Great Depression.
The White House was planning a major signing ceremony featuring
a long list of supporters of the legislation, including former
Federal Reserve Chairman Paul Volcker and Robert Diamond, president
of Barclay's PLC.
Obama is going out of his way to spotlight the legislation's
creation of a consumer protection bureau, an effort to make an
otherwise arcane and complex regulatory bill meaningful to the
public and to fend off Republican criticism that it amounts to an
expansion of government.
"These reforms represent the strongest consumer financial
protections in history," the president says in excerpts released
by the White House in advance of his remarks. "And these
protections will be enforced by a new consumer watchdog with just
one job: looking out for people - not big banks, not lenders, not
investment houses in the financial system."
The law also assembles a powerful council of regulators to be on
the lookout for risks across the finance system. It places shadow
financial markets that previously escaped the oversight of
regulators under new scrutiny and gives the government new powers
to break up companies that threaten the economy.
Large, failing financial institutions would be liquidated and
the costs assessed on their surviving peers. Borrowers will be
protected from hidden fees and abusive terms, but also will have to
provide evidence that they can repay their loans. The Federal
Reserve will get new powers while at the same time coming under
expanded congressional oversight.
In an ironic touch, Obama will sign the bill in the massive
Ronald Reagan Building, named after a president who championed
deregulation. Joining him will be scores of consumer advocates,
state and local government officials, business owners and
executives, and members of Congress who supported the bill. Among
those expected to be featured are Sen. Chris Dodd, D-Conn., and
Rep. Barney Frank, D-Mass., the two committee chairmen who
shepherded the bill through Congress and after whom the bill is
Obama will also be joined by a Maryland Vietnam veteran who was
hit with bank overdraft fees and a Georgia teacher stung by
retroactive interest rate increases on her credit card balance -
two issues the legislation aims to remedy.
Though Obama and his top officials urged Congress to pass the
law while the memory of the 2008 financial meltdown was still
fresh, many of the law's provisions won't take effect for at least
a year as regulators scramble to write new rules and implement
"That will take some time, but it is worth it," Deputy
Treasury Secretary Neal Wolin said Tuesday.
While the bill represents the end of a year's work by Congress
and the administration, Obama has at least one contentious remnant
from the bill to address. He must still nominate a director to the
independent consumer protection bureau, an agency that became one
of the bill's flashpoints and was attacked by Republicans as a
broad expansion of government power over private business.
Among those expected at the signing ceremony is Elizabeth
Warren, the Harvard law professor considered a leading candidate
for the job. Warren is a consumer advocate who was among the first
to propose the idea of a new agency for financial consumers. As
head of the Congressional Oversight Panel for the government's $700
billion Troubled Asset Relief Program, the bank rescue fund known
as TARP, she has periodically clashed with Treasury Secretary
Liberals and unions have been aggressively pressing for her
appointment. AFL-CIO President Richard Trumka was among the latest
to weigh in on behalf of Warren, saying Tuesday she is the only
candidate "uniquely qualified and equipped to head this new
But opposition in the Senate could make her confirmation
difficult, a point Dodd made in a radio interview on NPR Monday.
Also under serious consideration by the White House is assistant
Treasury secretary Michael Barr, one of the architects of the
financial regulation bill and a close ally of some White House
officials. Deputy assistant attorney general Eugene Kimmelman is
also in the running for the slot.
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