By Marcy Gordon, AP Business Writer
WASHINGTON (AP) — High-level government officials met Thursday to discuss the new consumer protection agency established by the financial overhaul law, and employees at seven federal agencies are being told they may be transferred to work at it.
Treasury Secretary Timothy Geithner met with heads of agencies including Federal Reserve Chairman Ben Bernanke; Sheila Bair, head of the Federal Deposit Insurance Corp.; and Housing and Urban Development Secretary Shaun Donovan. They agreed to work closely in the transition period, Treasury spokesman Andrew Williams said. Geithner is the temporary director until a new head of the agency is named.
The independent consumer protection agency, to be located within the Fed, will have the power to write and enforce new rules for mortgages, credit cards, bank fees and other consumer finance.
The agency heads who met at the Treasury Department each agreed to appoint liaisons from their staffs to help coordinate the transition.
The new bureau, drawing its staff mostly from employees at existing agencies with experience in consumer protection issues, is expected to have an annual budget of around $500 million. Under the new law, it must begin operating within a year.The question of who will head the powerful new agency has become a political football in Washington. Liberal lawmakers and consumer advocates are pressing for President Barack Obama to appoint Harvard law professor Elizabeth Warren, a leading proponent of creating the agency. Warren's nomination could face opposition from Senate Republicans if Obama names her.
Warren heads the Congressional Oversight Panel monitoring the government's $700 billion financial rescue effort, which has been critical of the Treasury Department's actions under the bailout.
There has been speculation that Geithner would prefer someone closer to the administration to head the agency. He said last week in a television interview that Warren would "do a great job in that position." But he refused to answer directly when asked whether she was his candidate for the job, saying the choice was up to Obama.