When the administration first unveiled its plan for a broad overhaul of the financial regulatory system, we noted that the banking industry was already targeting one pillar of the plan: a consumer protection agency for financial products. Well, the administration has decided to pursue that proposal first and sent proposed legislation to the House on Tuesday. Democrats say they will move quickly to pass a bill creating the new agency. And the banks are rallying their forces, reports the Washington Post:

The agency would have the power to probe any lender, impose penalties of up to $1 million a day in cases of wrongdoing, limit the compensation even of loan officers and mortgage brokers, and check if banks have been acting discriminatorily by forcing them to disclose the race, age and gender of their customers.

An intense lobbying effort has already begun to win over the few undecided lawmakers who will be critical in deciding which details will be included in the final bill. Industry groups say they are forming a coalition to persuade members of Congress to scale back the bill.

"I think when people read this, they will be shocked about the incredibly broad delegation of power," said Edward L. Yingling, chief executive of the American Bankers Association.

Other links this morning:
A.I.G. Offers Shareholders Little Hope for Recovery (NYT)
Finance Lobby Cut Spending as Feds Targeted Wall Street (WSJ)
Uncertainty Clouds Recovery of U.S. Investment in GM (WaPo)
G.M. Pushes the Case for Its Rebirth in Court (NYT)
General Motors Executives Put Wind-Down Costs at $1.25 Billion (Bloomberg)
Freddie Set To Name CEO, Source Says (WaPo)