FDIC Chief: Parts of Obama Plan Won't Fly

Sheila Bair Says Congress Won't Approve Two Major Parts of Administration's Financial Overhaul

(AP)  Federal Deposit Insurance Corp. Chairman Sheila Bair is pushing back against key elements of the Obama administration's financial overhaul plan, saying they wouldn't survive in Congress and calling her own alternatives more viable.

In an interview with The Associated Press, Bair said Congress won't approve two major parts of the package: Expanding the Federal Reserve's authority to regulate the largest financial companies and giving a proposed new consumer protection agency examination and enforcement powers over banks.

Such authority now belongs to her agency and other bank regulators.

"There's a lot of resistance from a lot of different quarters to a lot of the things the administration has submitted," Bair told the AP Thursday. "That is a reality the administration needs to deal with."

Bair said alternatives she has backed would "provide a framework that can actually get through Congress." Her ideas include empowering a new agency to protect consumers from abusive mortgage and credit card products - but having bank supervisors enforce those rules.

Her statements highlight Treasury's uphill struggle to sell the administration's proposed financial overhaul to Congress and the public. Since the plan was rolled out in June, industry groups have balked at rules they say will burden companies and raise borrowers' costs. Bank industry lobbyists are leading the charge against major parts of the plan.

Congress has objected to concentrating more power in the Fed. Critics note that the central bank failed to properly use its consumer protection authority before the crisis erupted.

Bair and other federal regulators have voiced their own opposition to parts of the plan, in what some Obama officials have dismissed as efforts to protect their turf.

Bair says she's raising legitimate policy questions. As head of an independent regulatory agency, she said she has a duty to tell Congress her opinion.

Amid concerns the plan is faltering, top Treasury officials have defended it in a series of interviews this week. They have insisted the plan is on track and have played down differences among regulators.

"What's important is, at the end of the day, that we all keep our eyes on the prize, make sure we're all pointed toward comprehensive reform of the financial services sector," Deputy Treasury Secretary Neal Wolin told the AP in a separate interview.

He said it's not surprising "that in understandable Washington style, (regulators) defend their own institutions."

Wolin said he worries that Bair's view that the administration plan can't pass Congress could become "a self-fulfilling prophecy."

[stevador39]

FDIC chief Sheila Bair has taken a courageous stand against the Federal Reserve and its culture of secrecy. Obama has steffed his administration with 'goldman sacks' thieves and political hacks.

[lami987]

Federal Reserve to regulate financial institutions is a joke. After all Federal Reserve belongs to financial institutons. They are all private entities trying to make as much money as possible for their share holders and their top executives, at tax payers' expense if necessary. Sadly, Obama's economic team is packed with people from those financial institutions. They are paid by tax payers but they actually work for those financial institutions. All decisions Fed. has ever made were for the benefits of financial institutions not for tax payers. Next time around I'll vote for a third party candidate.

[ibsteve2u]

lollll...well, it is good to see women demonstrating that their gender doesn't stop them from becoming members of "the old boyz network".

[rightbehind]

Funny, I like those ideas. She might want to start packing her belongings now.

[tincup356]

I would imagine the banks would balk at ANYONE standing between them and robbing the people.ALL the major banks that got TARP money ,,,are involved in conspiracy with BOTH parties,,,,they paid their lobby dollars and now they are scared that someone might raise questions of how crooked they really are....as far as I am concerned they could ALL go under and end up in soup lines, God knows they have put plenty of honest citizens there with their lowly tactics and actions.

[surfcity5150]

Come on Pelosi is just a regular American?? Don?t we all own a vineyard valued at 5 ? 25 million? Golly. Give the poor common folk lady a break. She knows how it feels to work 50+ hours a week and clip coupons so she can pay her electic bill and still make her mortgage payment?. just your regular American.

I am sure her vineyard is a completely green operation too! See she is just regular folk!

House Speaker Nancy Pelosi (D-Calif.)

Earned income: $212,100

Major assets: Together with her husband, Paul, Pelosi owns a vineyard in St. Helena, Calif., valued at $5 million-$25 million; a town house in Norden, Calif., valued at $1 million-$5 million; rental property in Napa, Calif., valued at $500,000-$1 million; and a Wells Fargo bank account containing $100,000-$250,000.

Major sources of unearned income: Rent from the Napa property totaled $15,000-$50,000; rental income from the vineyard totaled $50,001-$100,000.

Major liabilities: Mortgage on the vineyard totaled $5 million-$25 million (up from $1 million-$5 million in 2006); mortgage on Norden house totaled $500,001-$1 million; and mortgage on the rental property in Napa totaled $250,000-$500,000.

Gifts: Pelosi received an inscribed decoupage box from the Democratic National Committee Women?s Leadership Fund ($395) and the Eleanor Roosevelt Award from the Women?s National Democratic Club ($983).

Notes: The Pelosis exercised a $1 million-$5 million option to purchase a home in San Francisco as their primary residence in 2007. Paul Pelosi reported nearly four dozen stock sales and purchases last year, sometimes involving sums of up to $1 million or more. The largest included buying $500,001-$1 million of Cisco Systems Inc. stock and $500,001-$1 million worth of New River Pharmaceuticals stock. He invested $1 million-$5 million in Apple Computer stock in January and, in October, sold some of it for $1 million-$5 million. He appeared to take a loss on a $1 million-$5 million investment in Sandisk Corp. stock, which he bought in October and sold in December for $500,000-$1 million.
http://www.politico.com/news/stories/0608/11126.html