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Obama creates new bank watchdog for consumers

Obama creates new bank watchdog for consumers
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The White House has said Barack Obama is exploring a possible fallback plan to avert a debt default on August 2. He again called on Congress to raise the debt ceiling.

The president was announcing the head of a new watchdog, the Consumer Financial Protection Bureau, to help protect individuals from lending institutions.

In charge he has named Richard Cordray, a fierce critic of US banks and lax regulations.

As Ohio Attorney General he took several banks to court alleging abusive mortgage practices.

Barack Obama said:

“There is an army of lobbyists and lawyers right now working to water down the protections and the reforms that we passed. They have already spent tens of millions of dollars this year to try to weaken laws that are designed to protect consumers.”

Ongoing talks with Republican Congressional leaders on the debt crisis have yielded no breakthrough.

The White House opposes a Republican plan based on spending cuts, and says Obama will veto it if it passes Congress.

Attention is being focused on a compromise plan by the top Republican in the Democrat-led Senate, Mitch McConnell, to increase the debt limit.