• Washington Post , Wednesday, June 17, 2009 11:15 AM

As expected, the Obama plan to overhaul financial regulations includes a proposal to create a new agency to protect consumers of mortgages, credit cards and other financial products. The overall plan is built around five key points that are detailed in the draft of an 85-page white paper obtained by the Post, Binyamin Appelbaum and David Cho report. President Obama is scheduled to announce the plan today.

One element likely to provoke fierce debate is the establishment of a Consumer Financial Protection Agency that would have broad authority to overhaul a tangled mess of federal regulations, to change the way that loans are sold, and to increase the availability of financial products in lower-income communities and other underserved areas. The agency would have the ability to write rules, conduct examinations, and impose fines and other penalties.

Regulatory agencies and industry groups, while acknowledging that reforms are needed, argue the existing model remains the best way to protect consumers. Consumer advocates disagree. "We've tried it the other way for years, and obviously it didn't work. That's how we got here," says John Taylor of the National Community Reinvestment Coalition.

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