The differences between Treasury Secretary Timothy Geithner and Frank, a key and influential congressional voice on banking, come as the administration prepares to send Congress a package of proposed regulatory changes designed to avert the crisis that struck the financial sector last year.
Frank is promoting a plan to create a council of regulators, chaired by the Federal Reserve, that would identify financial behavior that could have negative systemwide consequences and would require institutions to reduce their level of risk, according to people who have been briefed on Frank's thinking.
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Geithner and the Federal Reserve have been pushing for the Federal Reserve to be the sole authority overseeing so-called systemic risk. But many lawmakers and some regulators believe such exclusive power would undermine other agencies that watch over financial institutions and give too much authority to the independent central bank.
Advocates of a single regulator see the Fed as a more efficient and quick acting authority.
"You can't regulate by committee," said Scott Talbott, a senior vice president at the Financial Services Roundtable, an industry group.
The administration, which is expected to announce its proposals the week of June 15, also wants the power to be able to step in and unwind large failing institutions, much like the Federal Deposit Insurance Corp. can with troubled banks. The administration had initially asked that the FDIC be given that broad authority. But Treasury now appears amenable to Frank's view that primary regulators have that power while relying on the FDIC's expertise, people briefed on the matter say.
Frank also has discussed streamlining some regulatory efforts, including possibly combining the Office of the Comptroller of the Currency, which regulates all national banks, with the Office of Thrift Supervision, which regulates savings and loan companies.