- Gentlemen, start your drones: Judge’s ruling opens door for commercial use
- Soldier who hid, bragged about not saluting flag to be punished — in secret
- ‘Maverick’ of the seas: ‘Top Gun’ school for U.S. ship officers to launch
- Putin declares Sochi Paralympics open amid Ukrainian protest
- ‘In Jesus name, we pray’ sparks ire at Ohio council meeting
- Navy’s first laser weapon ready for prime time; drone killer to deploy this summer
- Billionaire backer: Rick Santorum ‘needs to be heard’ in 2016
- Obamacare fallout: 49 percent pessimistic; 45 percent ‘scared’
- DHS accused of holding U.S. citizen at airport, using emails to pry into her sex life
- Seattle socialist: Minimum-wage discussion skewed by ‘right-wing’ GAO analysis
Lawmakers attack Fed’s expanded role
Lawmakers warned Treasury Secretary Timothy F. Geithner on Thursday that President Obama’s plan to greatly expand the Federal Reserve’s powers to oversee financial markets might overburden the central bank and lead to future problems on Wall Street going unchecked.
Members of the Senate Banking, Housing and Urban Affairs Committee generally agreed with Mr. Obama’s push announced Wednesday to create an oversight agency to protect consumers and investors from unscrupulous deals, but the senators expressed unease with some of the details.
The secretary’s appearance on Capitol Hill came a day after the Obama administration unveiled sweeping regulatory reforms of the nation’s financial system - a plan widely criticized on Wall Street and by leading financial industry lobbies.
The committee’s top Republican, Sen. Richard C. Shelby of Alabama, said he was concerned about giving more duties to the Federal Reserve, which already sets monetary policy and regulates banks among other functions.
“I do not believe that we can reasonably expect the Fed or any other agency to effectively play so many roles,” he said.
Mr. Shelby added that because Congress has limited oversight control over the central bank, it would be unwise to hand it additional responsibilities.
New York Democratic Sen. Charles E. Schumer, whose state contains the nation’s leading financial hub, said the administration’s plan should include greater consolidation of regulatory agencies.
“A multiplicity of regulators tends to produce less oversight overall,” Mr. Schumer said.
But Mr. Geithner said that because the Fed already supervises and regulates bank holding companies, including all major U.S. commercial and investment banks, it makes sense to convert the agency into a super-regulator that would oversee financial firms deemed too big or too critical to the economy to fail.
“Our plan gives a modest amount of additional authority - and accountability - to the Fed to carry out that mission,” he said.
Mr. Geithner dismissed the idea of creating a council of regulators - being pushed by some on Capitol Hill - saying it wouldn’t be able to respond as quickly to financial emergencies as the Fed.
“You don’t convene a committee to put out a fire,” he said.
The administration has proposed a Financial Services Oversight Council that would bring together the heads of all major federal financial regulatory agencies. The council’s goals would be to “fill gaps in the regulatory structure where they exist” - not to serve as a “first-responder.”
The secretary also tried to soothe concerns about overtaxing the Fed, noting that the administration’s plan also calls for moving consumer protection duties from the central bank and other regulators to a new independent agency devoted solely to consumer protection.
“Before this crisis many federal and state regulators had authority to protect consumers, but few viewed it as their primary charge,” he said.
About the Author
Sean Lengell covers Congress and national politics and can be reached at email@example.com.
- GOP tests Democrats on college loan issue
- Lawmakers outside intelligence loop get miffed about briefing structure in Congress
- John Boehner: Time is right to bring latest farm bill to House floor
- Supreme Court nears rulings on key voting rights cases
- John Boehner demands answers on NSA, phone records
Latest Blog Entries
TWT Video Picks
Taxpayers must pay the freight for over-budget train projects
- Kim Jong-un calls for execution of 33 Christians
- Rand Paul wins 2014 CPAC straw poll, Ted Cruz finishes a distant second
- U.S. deploys 12 F-16 fighter jets to Poland as exercise in response to Ukraine situation
- High schooler suing parents for money shot down by judge
- Senate Democrats, Republicans spar over restoring unemployment benefits
- Six Senate seats could hinge on Keystone pipeline
- Russias Putin nominated for Nobel Peace Prize
- Italy outraged over U.S. gun dealer's 'David' ad
- CURL: The modern GOP really is Reagan's 'Big Tent' party
- U.S. pilot scares off Iranians with 'Top Gun'-worthy stunt: 'You really ought to go home'
Pope Francis meets his 'mini-me'
Celebrity deaths in 2014
Winter storm hits states — again