Washington (CNNMoney.com) - The Senate might break its impasse on financial overhaul if it moves forward with a proposal that would put a consumer financial protection watchdog inside the Federal Reserve.
But such a move could water down the impact of a such a consumer watchdog, especially when compared to the stand-alone agency first proposed by President Obama. It would also be a big reversal for the Senate Banking committee, which has accused the Fed of letting down consumers, contributing to the economic meltdown.
Housing a new consumer regulator in the Fed is not set in stone, but lawmakers on the Senate Banking panel are talking it over these next few days, say sources who are not authorized to speak about the negotiations.
Protecting consumers who buy financial products like mortgages, credit cards and even auto loans has been the big sticking point holding up Senate progress on legislation to overhaul the financial system.