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Obama Pushes For Tougher Financial Regulation

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U.S. President Barack Obama is urging Congress to approve his plan to create a new government agency to protect Americans against financial abuses. The president wants to establish a Consumer Financial Protection Agency.

President Obama says Americans need a single consumer agency to protect them against irresponsible lenders.

The president says many consumers took on too much debt and took out loans they could not afford, but blames some financial companies for taking advantage of their customers.

"My concern are the millions of Americans who behaved responsibly and yet still found themselves in jeopardy because of the predatory practices of some in the financial industry," he said. "These are folks who signed contracts they did not always understand, offered by lenders who did not always tell the truth."

At the White House Friday, Mr. Obama said seven federal agencies each have a part in regulating the financial industry, which means lenders often escape accountability. He says that puts the entire U.S. economy at risk.

"As we have seen over the last year, abuses like these do not just jeopardize the financial well-being of individual Americans-they can threaten the stability of the entire economy. And yet, the patchwork system of regulations we have now has failed to prevent these abuses," said Mr. Obama.

The president says his proposed federal agency will make financial regulation simpler and more effective.

"The new Consumer Financial Protection Agency that I have asked Congress to create will have just one mission: to look out for the financial interests of ordinary Americans," he said. "It will be charged with setting clear rules of the road for consumers and banks, and it will be able to enforce these rules across the board."

Mr. Obama first asked Congress to create such an agency in June. The banking industry and some lawmakers have fought the proposal.

The president says banks and big financial firms are spending millions of dollars to make false claims about how a financial protection agency would work.