Wall Street isn't buying Obama's reform plan

Banks and other firms are quick to attack Obama's consumer-friendly overhaul of financial rules. The stage is set for a legislative battle, with Wall Street turning to allies in Congress.

By Walter Hamilton and Jim Puzzanghera
LA Times
June 18, 2009

Reporting from Washington — At its core, President Obama's overhaul of regulations for the financial industry seeks a fundamental change: Make the federal bureaucracy work for consumers, not just Wall Street. And Wall Street, not surprisingly, doesn't like it.

Striking a populist tone, Obama complained in a White House speech Wednesday that average Americans were often baffled by such intricacies as the terms of credit cards, home loans and other financial products. That confusion helped fuel the subprime mortgage meltdown that sent the U.S. and foreign economies reeling.

Much of his reform package involves complex changes to the inner workings of the financial system, but Obama said that better consumer protection -- a priority -- was a key to avoiding future financial crises.

Such safeguards could reach far down the line to such everyday matters as bank overdraft protection. A new agency would have the power to write federal rules that, for instance, prohibit prepayment penalties on loans, require better disclosures, order financial companies to offer easily understood options, and levy fines and penalties for lenders that don't comply.

(More here.)