Government Regulation

The Environmental Protection Agency has sent a proposal to the White House finding that global warming is endangering the public's health and welfare, according to several sources, a move that could have far-reaching implications for the economy and environment.

Adding to the chorus seeking an overhaul of the nation's food safety system, a report issued Wednesday called on the Obama administration to put someone in charge of safeguarding the food supply and to create a Food Safety Administration. The food safety system is "plagued with problems," said Jeffrey Levi, executive director of Trust for America's Health, which released the report in conjunction with the Robert Wood Johnson Foundation.

To help understand why the Obama administration is pushing for greater financial regulation, it may help to examine the case of Orange County's Ameriquest Mortgage Co., whose dizzying rise was followed by a monumental crash. The company and its affiliates had grown to become the nation's largest subprime mortgage lender when, in January 2006, Ameriquest coughed up $325 million to settle charges it misled borrowers and falsified loan documents.

The Obama administration is proposing the farthest-reaching set of new rules for the financial industry since the Great Depression -- including measures that would for the first time regulate hedge funds and give government the power to seize and dismantle companies deemed a threat to the economy. There is strong support for reform in the wake of last fall's near-meltdown of the global banking system, but several of the measures could trigger fierce resistance from the financial industry.

The Obama administration is actively discussing the creation of a regulatory commission that would have broad authority to protect consumers who use financial products as varied as mortgages, credit cards and mutual funds, according to several people familiar with the matter. The proposed commission would be one of the administration's most significant steps yet to overhaul the financial regulatory system.

Prompted by testimony last week about the crash of a commuter plane near Buffalo, N.Y., four senior senators have called for an independent investigation into federal oversight of regional carriers. In a letter released Tuesday, members of the Senate aviation safety subcommittee told the Transportation Department's inspector general, Calvin L.

Senior administration officials are considering the creation of a single agency to regulate the banking industry, replacing a patchwork of agencies that failed to prevent banks from falling into the worst financial crisis since the Great Depression, according to three people familiar with the matter.

Several large banks may get government approval to repay billions of dollars in federal aid next week after completing a series of tests to prove they can stand without crutches. JPMorgan Chase & Co., Goldman Sachs Group Inc. and American Express Co. are among the most likely candidates to get the Treasury Department's blessing, according to financial analysts. Together they owe the government $38.4 billion. Other banks bidding for approval include credit card giant Capital One Financial Corp.

The financial regulation plan that President Obama will roll out today will impose stricter and broader government oversight of the nation's banking system -- including tough new requirements on companies whose failure would threaten the economy, and creating new agencies to regulate banks and to protect consumers.

Regulators should consider requiring money market mutual funds to float their share prices rather than maintain the constant $1-a-share value that has made the industry a popular haven for investors' cash, the Obama administration says. The idea is mentioned in the wide-ranging plan released this week by President Obama to revamp financial-industry oversight.