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Ever since President Barack Obama proposed his wide-ranging financial reforms last month, investors have been wondering how hard he will push for his plans. So far the White House has kept up the pressure, but opposition is mounting. And it's far from clear that Obama is prepared to fight what increasingly looks to be a two-front battle.

First, the progress update. On July 10 the Treasury Department sent legislation to Congress that would turn Obama's investor protection proposals into law. Here are the key changes the White House is seeking:

  • Give the SEC power to regulate broker compensation. Right now, brokers are overseen by FINRA, a self-regulatory agency funded by the brokerage industry. This reform would ban brokers from selling high-commission products that make money for the brokerage firm, but not for customers.

    One early victory sign: a leading industry group, the Securities Industry and Financial Markets Association has announced it will support a fiduciary standard for brokers.

    The White House is also putting its weight behind a new Consumer Financial Protection Agency, which would regulate mortgages, credit cards and other loan products. On Tuesday assistant Treasury Secretary Michael Barr testified before the Senate Banking Committee in support of the agency. "There are too many agencies with consumer protection responsibilities, their authorities are too divided, and their primary missions are too distant from consumer protection," Barr said. "There is only one solution to these deep structural flaws: one regulator with one market with one mission — to protect consumers."

    Other financial services industry lobbyists seeking to defend the status quo, as well as conservatives who oppose more government regulation, are pushing back hard. Edward Yingling, head of the American Bankers Association, testified before the Senate Banking Committee that a consumer protection agency "will chill efforts to innovate and respond to consumer demand." And Peter Wallison of the American Enterprise Institute argued that the agency "reflects a paternalistic desire on the part of elites to control and limit others’ choices while leaving themselves unaffected."

    On the other side of the philosophical divide, some critics say that the White House isn't working hard enough to overcome opposition resistance to a new consumer protection agency, while investor advocates are calling for even stronger fiduciary protection.

    And on Wednesday, an investor coalition that includes two former SEC chairmen, former chair of the Commodity Futures Trading Commission Brooksley Born, and money managers Bill Miller and Jeremy Grantham, issued a report that attacked Obama's plan to reorganize federal agencies on several counts, including awarding risk oversight to the Federal Reserve. As the report put it, the Fed's credibility has been "tarnished" by its "easy credit policies" and "lax regulatory oversight." Instead, the group recommends establishing a Systematic Risk Oversight Regulator, which would have a staff appointed by the president and confirmed by the Senate.

    It looks to be a long, hot summer in Washington.

    What do you think of Obama's financial reform proposals — will they make life better for consumers and investors?