Business

Obama loses ground in Wall Street overhaul attempt

President Barack Obama's attempt to tighten the government's reins on Wall Street is losing momentum as banks gain traction against his proposal for increased consumer protections and key lawmakers question his call for standardized financial products.

That the financial industry could successfully push back against such a plan would have been unthinkable a year ago, when the markets teetered on the brink of collapse. But as anger over Wall Street greed and arrogance has begun to ebb, the industry is finding breathing room it needs to make its case.

"The sense is that people are taking a more deliberative approach, and I think that is very beneficial," said Wayne Abernathy, executive vice president of the American Banker's Association.

Consumer advocates say they remain optimistic that congressional Democrats ultimately will champion increased protections for average Americans. But they acknowledge that they are frustrated with the dialogue on Capitol Hill.

"I hear some members of Congress mouthing the words of financial lobbyists," said Travis Plunkett, legislative director for the Consumer Federation of America. "They seem to forget these are the same institutions that brought the economy to its knees a year ago."

Two key pieces of Obama's plan have emerged in recent weeks as particularly vulnerable: the creation of a Consumer Financial Protection Agency to police the fine print on credit cards and mortgages, and a requirement that banks offer customers "plain vanilla" -- low-risk, standardized -- products such as 30-year fixed-rate mortgages.

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