WASHINGTON — Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke squared off Friday in a public dispute on who should become the nation’s top consumer watchdog.
In testimony prepared for a House hearing, Geithner said it was important to strip the Fed and other regulators of their consumer-protection duties and create a new federal agency dedicated solely to such a mission.
Bernanke disagreed, saying the Fed is best suited to the task.
Monitoring risk and protecting consumers are “closely related, and thus entail both informational advantages and resource savings,” said Bernanke.
Geithner said he welcomes debate but that the stakeholders must agree to reform.
“We simply cannot afford inaction on this issue,” he said.
Bernanke’s push back comes as he’s nearing the end of his term.
After it expires early next year, President Barack Obama will have to decide whether to reappoint him. Bernanke, an appointee of President George W. Bush, took over the Fed in February 2006.
House Democrats say they are committed to advancing Geithner’s proposal, although the effort has slowed amid industry opposition.
Financial Services Committee Chairman Barney Frank, D-Mass., delayed plans to consider the proposal this month until after Congress returns from its August recess. Nearly two dozen industry groups had written to Frank objecting to the legislation and warning that it was too broad.
