As the country emerges from the worst recession in generations, the Obama administration's push for sweeping measures to prevent future financial crises has lost momentum, stalled, say political commentators, by the economy's recent improvement and the debate about proposed health care overhaul.
Treasury Secretary Tim Geithner came to Capitol Hill today in an effort to take back some of that momentum.
"We can't let the need for reform fade as the memory of the crisis recedes," said Geithner before the House Financial Services Committee.
"Time is the enemy of reform," he said in prepared testimony. "As some normalcy returns to our financial system and our economy, we cannot let it be cause for complacency. We must act to correct the regulatory problems that have left our financial system so fragile and prone to future trouble."
In his prepared remarks, Geithner called for a consumer financial protection agency, and powers for the government to wind down failing institutions that could threaten the overall financial system if they collapsed uncontrolled.
Some Reform Plans Pared Back
Rep. Barney Frank, chairman of the House panel, and Sen. Chris Dodd, chairman of the Senate Banking committee, have committed to President Obama's pledge to enact legislation by the end of this year, but question marks hang over whether that plan remains realistic.
"The media reports that it is dead for the year are inaccurate," Frank said, noting that he has spoken to Dodd, who also expects to act on the issue this year.
On Wednesday, Frank sent a memo to Democratic lawmakers on the panel making "key changes" to the administration's proposed consumer financial protection agency.
One change Frank made was dropping a requirement for banks and other financial institutions to provide "plain vanilla" products such as 30-year fixed-rate mortgages.
When Republicans asked Geithner about his reaction to the changes at today's hearing, the Treasury chief responded that he was "very supportive" of these changes.
On Tuesday, Frank sent committee Democrats a memo, obtained by ABC News, in which he outlines "key changes" that would scale back the administration's proposal for the consumer protection agency.
However, in his prepared remarks, Geithner emphasizes the need to change a system that allows consumers to fall prey to the ploys of banks.
'Death Panels' -- But For Financial Institutions
"Without a strong framework of regulation, banks and other providers compete to take advantage of consumer confusion rather than to better serve consumer preferences," Geithner said in his prepared statement. "This must end."
In his opening remarks, Frank said that Congress will enact "death panels" -- but they will have nothing to do with health care as Sarah Palin and others famously suggested.
"We will be providing a mechanism for putting non-bank financial institutions out of everybody's misery," said Rep. Frank. "There will be 'death panels' enacted by this Congress, but they will be for non-bank financial institutions that will not be considered too big to die."
"We are talking about dissolution, not resolution," he said.