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Obama Administration May Overhaul Financial Regulation

The Obama administration is reportedly working on a major overhaul of the U.S. financial regulatory system, in the wake of the financial meltdown blamed in part on inadequate supervision of the complex system.

The Washington Post newspaper and other news outlets quote sources familiar with the plan as saying one provision would create an agency to protect consumers using financial products like mortgages, credit cards and mutual funds.

Responsibility for such oversight is currently distributed among many agencies, some of which make consumer protection a low priority.

The plan could also strip the agency in charge of protecting investors, the Securities and Exchange Commission, of some of its powers.

That possibility is already drawing criticism from SEC Chairman Mary Schapiro. She says she has serious questions about any plan that takes authority away from her agency.

Other proposals that have been under consideration for some time would designate an agency, perhaps the central bank, to guard the financial system against practices that put it in danger.

Some information for this report was provided by AP and Bloomberg.