Geithner urges financial overhaul by year's end

Treasury Secretary Timothy Geithner urged lawmakers on Friday to pass legislation by the end of the year that would dramatically remake the financial regulatory system, even as lawmakers and existing regulators have expressed growing concerns about the administration's plans.

Geithner testified at a House Financial Services Committee hearing that the administration "is moving aggressively to help advance the overall process," and has already released draft legislation on the bulk of the plan to replace the "patchwork and antiquated" system.

Existing bank regulators have pushed back strongly on many parts of the plan.

The Federal Reserve has expressed concerns about losing its authority to oversee consumer protection issues to a new agency called the Consumer Financial Protection Agency. The Office of Thrift Supervision has pushed back on the administration's plan to merge the agency with the Office of the Comptroller of the Currency. And the Federal Deposit Insurance Corporation (FDIC) has expressed concerns about granting the Fed authority to oversee "systemic risk," and favors a proposal that includes a council of the major financial regulators.

Rep. Paul Kanjorski (D-Pa.) said that he had "deep and profound" concern about granting the Fed authorities on systemic risk. Rep. Jeb Hensarling (R-Texas) and other Republicans on the panel expressed concerns that the administration's plans would perpetuate the government's role in bailing out financial firms.

Committee chairman Rep. Barney Frank (D-Mass.) had intended to pass legislation through his panel by the August recess that would set up the consumer agency. Frank postponed debate until September amid strong opposition from the financial industry, Republicans and some concerned Democrats about the speed of the debate.

Frank intends before the recess to move forward on legislation on executive compensation and "say on pay" authorities, but the vast majority of the overhaul will come in the fall.

Frank said on Friday that he intends to take up the debate on individual titles of the bill but the eventual result would be one bill on the House floor.

"Our expectation is that we’ll go to the floor as one bill because that’s been the Senate process," Frank said.