Opposition To Treasury's Blueprint Gains Steam

Go to Washington Post original
Senior Treasury officials identified three immediate targets yesterday for their plan to overhaul the nation's financial regulatory structure, including streamlining the approval process for securities that contributed to the crisis now roiling Wall Street. But their hopes for a few quick changes are running into mounting opposition from interest groups and officials elsewhere in the Bush administration.

Critics said the Treasury's plan is almost too big to succeed. Longtime Washington institutions would undergo wholesale changes or shut down altogether. Few leaders of these agencies -- and the associations that work with them -- welcomed such radical transformation.

Interest groups took particular issue with the proposal to create a single regulator to replace the many agencies that now oversee various types of financial firms. Banks could lose their latitude to pick and choose among state and federal regulators. Thrifts could be forced to become banks, which are more regulated.

"Dismantling the thrift charter and crippling state banking charters will weaken banking in America," said Edward Yingling, president of the American Bankers Association. "We must be careful not to let regulatory boxes substitute for real improvement."

Credit union lobbyists also oppose the plan because it could eliminate their unique niche in the banking system and impose new regulations. Dan Mica, chief executive of the Credit Union National Association, said his group was "astonished and angered" by the proposal to phase out the National Credit Union Administration. The Treasury's proposal makes "no sense" for consumers, who would "pay more and get less in return," he said.

more...