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Geithner: Administration eyes financial reform

Treasury Secretary Timothy Geithner convenes the President's Working Group on Financial Markets in Washington
Treasury Secretary Timothy Geithner convenes the President's Working Group on Financial Markets. SEC Chairman Mary Shapiro, left, and FDIC Chairman Sheila Bair look on.Jose Luis Magana / REUTERS
/ Source: The Associated Press

Treasury Secretary Timothy Geithner said Thursday the administration will send legislative language to Congress in the next few days to create a consumer financial products agency, one of the key parts of its overhaul plan.

Following a meeting with President Barack Obama's working group on financial markets, Geithner told reporters the administration was moving quickly to get the measure through Congress and to promote better coordination among regulators.

But he refused to answer a question on whether he had been informed ahead of time by Citigroup Inc. of its plans to modify its salary arrangements for many bank employees.

The administration last week unveiled a sweeping plan to overhaul the way the government regulates financial markets in the wake of the worst economic crisis to hit the U.S. in seven decades.

The administration plan would give the Federal Reserve expanded powers to oversee institutions whose failure could destabilize the entire financial system.

The proposal also calls for creation of a new agency to oversee various types of financial products provided to consumers from mortgages to credit cards.

The idea for a consumer agency has generated sizable opposition from the finance industry, which argues that it would stifle development of new products. But the proposal is supported by the Democratic chairmen of two key committees, House Finance Committee Chairman Barney Frank and Senate Banking Committee Chairman Christopher Dodd.

Frank on Wednesday said his committee would begin reviewing legislation in July to create the Consumer Protection Financial Agency.

Geithner on Thursday signaled that the administration is pressing for quick movement, saying it would "provide within the next few days" proposed legislative language to set up the consumer agency.

"We are going to try to make sure we are making progress on a range of things that we need to do to make these markets safer, more stable — a more balanced mix of innovation and stability in the future," Geithner said.

The working group, which was created after the 1987 stock market crash, includes the heads of key regulatory agencies from the Fed, Securities and Exchange Commission, Commodity Futures Trading Commission, Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency.