Bank regulators dig in against Obama shake-up

Top U.S. bank regulators will speak out on Tuesday against some key elements of the Obama administration's plan to reshape financial regulation, saying parts of it were unneeded or could be disruptive.

The officials' defiance, in prepared congressional testimony obtained by Reuters, came despite a warning given to them on Friday by Treasury Secretary Timothy Geithner.

In private remarks punctuated with expletives, Geithner urged the regulators to end their turf battles and show support for President Barack Obama's plan, according to a person familiar with the situation on Monday.

But that seemed to have little impact on John Bowman, acting director of the Office of Thrift Supervision (OTS), an agency slated for closure under the Obama plan.

"We do not support the administration's proposal to establish a new agency, the National Bank Supervisor (NBS), by eliminating the Office of the Comptroller of the Currency ... and the OTS," Bowman said in written remarks to be given to the Senate Banking Committee at a hearing.

In addition, he said, "The OTS does not support the provision in the administration's proposal to eliminate the thrift charter and require all federal thrift institutions to change their charter."

Such words marked a retrenching of regulators' opposition to portions of Obama's plans to tighten oversight of banks and capital markets amid the worst financial crisis in generations and with the economy mired in a stubborn recession.

"We do not see merit or wisdom in consolidating federal supervision of national and state banking charters into a single regulator," FDIC chairman Sheila Bair said in her remarks ahead of the hearing on regulatory reform. link....