By Anne Flaherty, Associated Press Writer
WASHINGTON (AP) — Ceding ground amid growing business opposition, the Obama administration on Wednesday signaled a willingness to exempt retailers, real estate brokers, lawyers, auto dealers, cable companies and accountants from oversight of its proposed Consumer Financial Protection Agency.
Treasury Secretary Timothy Geithner told Congress that he supports a plan by Democratic Rep. Barney Frank that would narrow the purview of the new consumer watchdog. His remarks all but guarantee that lawmakers will move ahead with financial reform legislation less ambitious than the plan that President Barack Obama outlined in June.
"There are lots of different ways to make sure that you don't create too much unbridled authority that would be damaging" to industry competition, Geithner told the House Financial Services Committee.
The proposed agency, CFPA for short, is the centerpiece of Obama's broader effort to fix the regulatory system that contributed to last year's market crisis. Among his top priorities is a separate regulator that could reach across various industries to defend financial consumers from fraud and abuse.
The current regulatory system focuses on banks, leaving swaths of the financial industry unsupervised.
Frank, the liberal Massachusetts Democrat who chairs the House panel, was an early and ardent supporter of Obama's approach. But as the weeks passed, giving the financial industry time to launch a multimillion-dollar lobbying effort to kill the legislation, conservative Democrats joined Republicans in questioning whether such an agency would be too burdensome for local banks and businesses.