March, 02, 2010

The head of the Federal Deposit Insurance Corp. pitched again Monday for a new agency for consumer financial protection, now a key sticking point in Senate talks in legislation to overhaul the finance system.FDIC Chairman Sheila Bair said a new agency was needed and she believes it "would help community banks, not hurt them."The banking industry overall opposes creation of a new agency, which would enforce rules and police the fine print of credit cards, mortgages and other financial transactions. Bair said she was hopeful a bipartisan agreement can be reached in Congress on the issue.

"I don't think we've done a good job protecting consumers in financial services," Bair said in remarks to a conference of the National Association of Attorneys General.Attorneys general in several states have actively prosecuted mortgage fraud and other financial violations in the wake of the financial crisis that struck in late 2008.Bair, an independent regulator, has endorsed creation of a consumer protection agency — a key pillar of the Obama administration's plan to reconfigure the financial system.

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