Now this comes as a shock:  Obama Blueprint Deepens Federal Role in Markets

…The plan seeks to overhaul the nation’s outdated system of financial regulations. Senior officials debated using a bulldozer to clear the way for fundamental reforms but decided instead to build within the shell of the existing system, offering what amounts to an architect’s blueprint for modernizing a creaky old building. …

The key points:

The proposals would greatly increase the power of the Federal Reserve, creating stronger and more consistent oversight of the largest financial firms.

It also asks Congress to authorize the government for the first time to dismantle large firms that fall into trouble, avoiding a chaotic collapse that could disrupt the economy.

Federal oversight would be extended to dark corners of the financial markets, imposing new rules on trading in complex derivatives and securities built from mortgage loans.

The government would create a new agency to protect consumers of mortgages, credit cards and other financial products.

And the administration would increase its coordination with other nations to prevent businesses from migrating to less regulated venues.

The plan includes provision for creating a Consumer Financial Protection Agency. It’s purpose:

The agency would have broad authority to overhaul a tangled mess of federal regulations, such as the various laws that compel lenders to give mortgage borrowers a massive stack of paperwork at closing that includes several calculations of the true cost of the loan itself.

“Consumers should have clear disclosure regarding the consequences of their financial decisions,” the plan states.

The agency also would have the authority to change the way that loans are sold…

There’s this little bit:

And the agency would have a mandate to increase the availability of financial products in lower-income communities and other underserved areas, in part by enforcing the Community Reinvestment Act, which requires banks to make loans everywhere that they collect deposits.

Doesn’t that sound like the kind of action that caused the financial meltdown last fall, banks being mandated to make home loans to make Congress’s dream of affordable housing for everyone come true?

Critics of centralization say it will stifle innovation and restrict consumer choice:

Regulatory agencies and industry groups acknowledge failures in recent years. But they say the existing model remains the best way to protect consumers, arguing that the agencies can identify problems more easily because of their close engagement with firms. They also are concerned that a consumer agency could be overly restrictive, limiting access to loans and constraining the development of new types of accounts, loans and other financial services.

“This consumer protection agency would be deciding how people get to live as opposed to people getting to decide for themselves,” said Kelly King, chief executive of BB&T, a large commercial bank based in North Carolina.

The White House document is here (PDF).

Much more at the link.

H/T Instapundit