WASHINGTON (Reuters) - U.S. lawmakers pressed financial regulators on Thursday on their efforts to crack down on Wall Street after the 2007-2009 financial crisis, which a new government report said may have cost the U.S. economy more than $10 trillion.
Top regulators lined up for the hearing before the Senate Banking Committee to explain their plans for 2013 and update lawmakers on their progress writing a raft of new rules aimed at preventing another meltdown.
Committee Chairman Tim Johnson, a Democrat from South Dakota, said the Government Accountability Office put together the cost estimate at his request. He pressed the regulators to move forward with efforts to make the financial system more durable.
"I urge you to consider the benefits of avoiding another costly, devastating crisis as you continue implementing Wall Street reform," he said.
Regulators have been scrambling to write dozens of new rules required by the Dodd-Frank oversight law, which Congress passed in 2010 in response to the crisis.
Lawmakers now want to know where regulators stand on writing controversial new reforms such as the Volcker rule, which prevents banks from making risky speculative bets with their own money. Regulators are months behind on releasing the rule.
They also want regulators to explain how various rules, such as a series of new mortgage regulations, will work together and whether the agencies are considering the impact of new capital requirements and other rules on small banks.
Mike Crapo of Idaho, the committee's top Republican, said regulators need to give more information on how new rules for the over-the-counter swaps market would apply overseas.
"There is a bipartisan concern that some of the Dodd-Frank rules go too far and need to be fixed," he said.
Republicans also questioned regulators on whether the dozens of new rules they are writing would restrict consumers' access to credit. They are particularly concerned about a number of new mortgage rules from the Consumer Financial Protection Bureau and other agencies.
CONSUMER BUREAU
One of the fiercest debates in recent weeks has surrounded the consumer bureau, created in Dodd-Frank to help protect Americans from financial scams.
Senate Republicans have refused to confirm President Barack Obama's choice to lead the bureau unless the White House agrees to change its structure. Democrats say the agency is working well and that changes would weaken it.
Richard Cordray, who has led the CFPB on a temporary basis for a year and who was recently nominated for a full term at the helm, appeared at the hearing on Thursday.
"Director Cordray and the CFPB have worked tirelessly to finalize many rules and policies to protect consumers in areas such as mortgages, student lending, servicemembers' rights and credit cards," Johnson said.
"He has done good work, and I urge my colleagues to confirm Director Cordray to a full term without delay and allow the CFPB to continue its important work protecting consumers."
Outside the hearing room, a group of protesters wearing red shirts passed out fliers claiming the bureau has not done enough to help homeowners.
In their opening statements, the regulators discussed issues such as winding down massive failed banks and requests for more funds to carry out the new authorities.
Federal Deposit Insurance Corp Chairman Martin Gruenberg, Federal Reserve Governor Daniel Tarullo, Commodity Futures Trading Commission Chairman Gary Gensler, Securities and Exchange Commission Chairman Elisse Walter and Mary Miller, the Treasury Department's undersecretary for domestic finance, also appeared at the hearing.
(Reporting By Sarah N Lynch, Douwe Miedema and Aruna Viswanatha, Writing by Emily Stephenson, Editing by Tim Ahmann and Andrea Ricci)
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