Administration pushes regulatory changes

WASHINGTON -- Debate over the most sweeping proposed overhaul of U.S. financial industry regulation since the Great Depression will open Monday as Treasury Secretary Henry Paulson announces specifics of the administration plan amid mixed response to preliminary details.

Paulson is to present a plan Monday that would give new authority to the Federal Reserve, making the central bank the financial system's most powerful authority. An executive summary said the plan would:

•Expand the Fed's ability to examine any financial institution posing risk to economic system stability.

•Create a Mortgage Origination Commission to develop minimum licensing rules for industry players.

•Fold the Office of Thrift Supervision into the Office of the Comptroller of the Currency, which oversees banks.

•Merge the Commodity Futures Trading Commission and Securities and Exchange Commission into a single regulator for securities and futures.

•Form an Office of National Insurance to regulate insurance firms that opt for a federal charter.

•Gradually create three main overseers: the Fed, a "prudential financial regulator" over banks and a "business conduct regulator" to protect consumers.

The plan comes amid increased calls for tougher oversight of a marketplace with more difficult-to-understand investments and institutions operating beyond the reach of a gap-hobbled regulatory system.

Congressional response, though cautiously approving, signaled the likelihood of years of fierce debate. Sen. Charles Schumer, D-N.Y., chairman of the Joint Economic Committee, said Sunday that oversight consolidation is needed. But he called for "a single regulator, as London has," instead of three.

Schumer, expected to question Fed Chairman Ben Bernanke about the plan at a Wednesday hearing, said it doesn't do enough to deal with unregulated investments even experts "don't fully comprehend."

Rep. Barney Frank, D-Mass., chairman of the House Committee on Financial Services, called the plan constructive. But he said it "goes too far in diminishing the role of the states, and not far enough" in new Fed power over non-bank institutions.