Credit Card Magazine

When the economy was booming, banks doled out credit to consumers like candy. People who could never afford to live their dream found pay option adjustable rate mortgages and other easy-access loans just a signature away. Credit cards put the pain of payment off to another day — never mind the fees hidden in the fine print.

But what is good for consumers may not always square with what is good for banks. And the banking industry — which says it stands to lose billions of dollars — is bracing for a fight as the administration’s plan to overhaul the way the industry is regulated heads to Capitol Hill.

Banks “are really dumbfounded by the scope of this agency,” Edward L. Yingling, the president of the American Bankers Association, said. “It’s not like the current regulators don’t have all the authority they need. You don’t have to blow up the system.”

Banking groups are concerned about the costs a new layer of regulation might impose, and the prospect of more examiners crowding into their banks.

“You are talking about an agency that is authorized to design financial products and, in fact, say that they must be offered first, over the banks’ own products,”

It may also be difficult to separate “consumers” from “investors,” leaving uncertainty about whether some financial products fall under the purview of the new agency or the Securities and Exchange Commission, which monitors many investor products. A spokesman for the Treasury said the S.E.C. would maintain its power over investor protection.