WASHINGTON DC, United States – US financial institutions and their allies mobilised lobbyists and fueled their media campaigns yesterday in a swift response to a Democratic plan to rein in Wall Street and protect consumers in their banking and borrowing transactions.

The US Chamber of Commerce prepared a US$3- million blitz aimed at members of the Senate Banking Committee, and banking lobbyists prepared amendments and looked for friendly senators to advance them.

Senate Banking Committee Chairman Christopher Dodd unveiled a 1,336-page bill Monday that would give the government unprecedented powers to split up firms that threaten the economy, force the industry to pay for its most spectacular failures and create an independent consumer watchdog.

The financial industry’s immediate objections put pressure on senators to weaken the bill and created a series of obstacles for Dodd as he attempts to navigate between the Senate’s institutional need for bipartisanship and the pull of liberals and consumer advocates who want to crack down on Wall Street.

The Obama administration ramped up its own countercampaign Tuesday, sending Treasury Secretary Timothy Geithner on a round of television appearances to signal that the White House is not in a compromising mood.

“We are going to look for ways to make it stronger,” Geithner said on Fox News. “And we are going to resist efforts to weaken it.”

Dodd hopes to get the bill through his committee next week, preparing it for action on the Senate floor sometime after Congress’s two-week recess that begins March 27.

The consumer bureau, which would be located within the Federal Reserve but have fairly autonomous powers, promptly emerged as the main industry target. Bank officials said Dodd unnecessarily separated the functions of the Fed and other regulators from the consumer agency. The chamber argued that the watchdog’s reach would extend to small businesses.

“Our basic argument is that effective consumer protection can be achieved without creating a giant new bureaucracy with unlimited powers, unlimited scope to regulate businesses that had nothing to do with the crisis,” said David Hirschmann, president of the Chamber’s Center for Capital Markets Competitiveness.

The chamber is focusing its message in six states, five of them home to members of the Senate Banking Committee — Democrats Mark Warner of Virginia, Tim Johnson of South Dakota, Evan Bayh of Indiana and Jon Tester of Montana, and Republican Bob Corker of Tennessee, who attempted to negotiate a bipartisan deal with Dodd.

Also in the chamber’s sights is Democrat Blanche Lincoln of Arkansas, who is facing a difficult re-election and who chairs the Senate Agriculture committee. The agriculture committee is helping write legislation governing derivatives, highly complex transactions blamed in part for the financial crisis. The chamber is working with a coalition of corporations that want to be exempt from some restrictions because they use derivatives as hedges against market fluctuations, not as investment opportunities.

The chamber mounted an earlier campaign against a House version of the legislation. The bill, which contained a freestanding consumer protection agency, ultimately passed on a strict party-line vote.

Hirschmann said the bureau proposed in Dodd’s bill would have too many powers to write and enforce regulations, even on the smallest institutions on the basis of the bill’s unspecified “abusive practices.”