WASHINGTON — Treasury Secretary Tim Geithner is telling senators that consumers and investors need protections against manipulation and deception in financial services.
In prepared remarks to the Senate Banking Committee, Geithner says new financial products have resulted in benefits, but lax regulation has exposed Americans to abuses.
Administration and industry officials say the Obama administration is considering creation of a regulatory commission to protect consumers of financial products such as credit cards and mortgages. Geithner hosted a dinner Tuesday to discuss such steps.
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Geithner told senators Wednesday that government rules should ensure that financial choices are clear, reasonable and appropriate.
The head of the Treasury Department also said he expects a federal program aimed at helping banks get distressed assets off their books to be in place by early July.
“Working with the Federal Reserve and the FDIC, we expect these programs to begin operating over the next six weeks,” Geithner said.
The Treasury’s Public-Private Investment Program will use as much as $100 billion of government funds to finance sales of $1 trillion in distressed mortgage-backed securities and other assets.
“A variety of troubled legacy assets are congesting the U.S. financial system,” Geithner said. “This constraint on capital reduces the ability of financial institutions to provide new credit and uncertainty about the value of legacy assets is constraining the ability of financial institutions to raise private capital.”
Geithner also said that the Treasury has about $124 billion left in the $700 billion Troubled Asset Relief Program, which has funded bailouts of banks.