Speaking to a gathering of lawmakers and journalists in Washington on June 17, President Obama unveiled his plan to overhaul government oversight of the consumer banking and financial services markets. As the cornerstone of the president's proposal, an independent regulatory agency would set baseline rules for credit cards, payday loan companies, and mortgage lenders. While states still enforce their own banking laws, the proposed Consumer Financial Protection Agency would promote financial literacy among Americans while enforcing nationwide compliance with new ethics guidelines and operating standards.
Treasury officials released supporting documentation about Obama's proposal, noting that the new agency would operate under five guiding principles:
The proposal would move oversight of the financial sector from the traditionally hands-off Federal Reserve. As a follow-up to tighter regulation of the credit card industry, lawmakers expect the new agency to further restrict predatory lending and other high risk practices among lenders.