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Sen. Richard Shelby, the top Republican on the Banking Committee, and other committee Republicans want chairman Christopher Dodd, D-Conn., to hold hearings on the plan. But the day before Obama unveiled his proposal, he made it clear to Dodd and to Banking Committee Republicans that he was still insisting that any regulatory overhaul contain a new consumer protection agency to address mortgages, credit cards and other lending products. That provision, contained in the House bill, has been a major sticking point in negotiations between Dodd and Shelby. Aides to both men have been working on a compromise that would create an entity, either within the Treasury Department or within an overarching bank regulator, to help write consumer regulations. Under that plan, the office would have its own budget, and its head would have to be confirmed by the Senate and report every six months on the status of consumer financial protections. "My sense is the administration is putting a lot of pressure on Dodd," Corker said. "Hopefully, that won't derail the process." While the consumer agency has long been a cornerstone of Obama's regulatory plan, Volcker's proposal was not. Treasury Secretary Timothy Geithner has argued privately and in congressional testimony that proprietary trading by commercial banks did not lead to the financial crisis. But White House and administration officials described a long-term process where Volcker's views were bolstered by other respected international financial figures who were calling for sharply restricting such risky trading. Those included Stanley Fischer, the governor of the Bank of Israel, Mervyn King, the governor of the Bank of England, and John S. Reed, former chairman of Citigroup. By injecting yet another provision into the mix, however, Obama risks creating further delays to passing a Senate bill
-- and complicating negotiations with the House. Obama is both populist and pragmatic. He is also more demanding, urging Congress to do more, and to do it quickly.
[Associated
Press;
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