June 19, 2009

NEW YORK (AP) — Of all the financial regulatory changes the Obama administration has proposed, one stands tallest as a threat to bank industry profits: the creation of an agency to protect consumers from risky products.Banking lobbyists are already trying to curb the agency, which is fast becoming the first big battleground over the financial overhaul. But it's up against an industry with a track record of staying one step ahead of regulators.

If approved by Congress, the Consumer Financial Protection Agency could curtail or ban a host of dubious — but lucrative — bank practices such as ballooning mortgages, excessive credit card interest rates and surprise overdraft fees.The administration says such safeguards could have minimized the meltdown's damage. But a concerned banking industry is taking aim at the proposed watchdog.Saying they're being unfairly cast as the villain, banks fear a new agency would create conflicting layers of regulation and give outsiders broad sway over their products and services.