As previous reported here, President Obama’s release of his plan to overhaul the regulation of the financial industry was followed by Treasury Secretary Timothy Geithner’s defense of the Administration’s proposal before the Senate Committee on Banking, Housing and Urban Affairs on Thursday. The Secretary’s expected appearance before the House Committee on Financial Services later in the day was postponed, due to an extended series of votes on the House floor.

The larger role of the Federal Reserve is shaping up to be the most controversial provision of the plan, as evidenced by the variety of concerns expressed during Geithner’s testimony. Some charged that loading the Fed’s plate with new systemic risk responsibilities would distract from its monetary policy mission. Others expressed concern that the Fed would not be suited for more responsibilities, while others charged that the central bank could lose its political independence under the Administration's proposal to require clearance for emergency lending from the Treasury Department. Such skepticism came from both sides of the aisle, with both Banking Chairman Christopher Dodd (D-CT) and Ranking Member Richard Shelby (R-AL) taking aim at the Fed during their questioning of Geithner.

House Financial Services Chairman Barney Frank (D-MA) plans to tackle the overhaul in July, first by hearing from panels of academics, experts and others during multiple full committee hearings, followed by a full committee markup of the emerging legislation. The Chairman stated that he plans to mark up the legislation in pieces, with the intention of moving them all as one bill on the House floor after the month-long August recess. This marks a shift from the initial pre-August timeframe for floor action, due to the House’s already-crowded schedule that includes healthcare reform and climate change legislation. The Senate is expected to take up the legislation later in the fall.

To date, Chairman Frank’s tentative schedule includes hearings on July 13, 15, 16, 17, 22 and 24, and subsequent markups on July 23, 29 and 30.