The legislation would establish a "National Bank Supervisor" and an independent agency within the executive branch, headed by a presidential nominee.
According to the legislation, the new agency would "seek to promote transparency, simplicity, fairness, accountability, and access in the market for consumer financial products or services" and be able to craft new regulations to carry out that mandate.
The legislation, promised by President Obama and Treasury Secretary Tim Geithner, is a core part of the administration's initiative to overhaul U.S. financial regulations. Geithner had signaled last week that legislation to centralize consumer protection was forthcoming.
Still, the proposed consumer protection "czar" has been the core of business groups' opposition to elements of Obama's regulatory overhaul, with those groups -- joined by some conservative Republicans in Congress -- worrying that the new agency would only add to bureaucracy instead of streamlining regulation.