CNN | Lawmakers on Tuesday will consider a deal that would house a powerful new consumer finance regulator inside the Fed. The Senate and the House passed different versions of Wall Street reform legislation, and last week 43 lawmakers started melding the two bills together.

Lawmakers start meeting at 12 p.m. ET on Tuesday to consider consumer protection issues, as well as how to monitor risk in the financial system and how to fund a new process for taking down failing financial firms.

The reforms aim to strengthen consumer protection, shine a light on complex financial products and create a new process for taking down giant, failing financial firms.

Both the Senate and the House bills call for a new consumer protection agency to crack down on excessive and hidden fees in mortgages and credit cards. However, the House bill creates a stand-alone agency, while the Senate’s creates a consumer regulator housed inside the Fed.

House Financial Services chief Rep. Barney Frank, D-Mass., is expected to suggest changes to the combined bill later today, reflecting the framework laid out by the Senate, which puts the consumer regulator inside the Fed. The Senate is likely to agree to that change.

Democrats consider the consumer financial regulator to be the signature piece of financial reform, since it’s the one that most directly impacts the public. The new consumer regulator would have broad oversight over the kinds of loans that consumers buy, and will be tasked with objectives like banning penalty fees for those who pay off subprime mortgages early.

The consumer protection agency has also been one of the hardest fought battles, as banks have argued that any regulator that oversees consumer protection should also ensure that banks are safe and sound. That’s the way the current regulatory system works.

Under the House offer to be discussed today, the new consumer regulator would have power over pay day lenders, companies that do check cashing and fund transfers, as well as private student loan providers. But the consumer regulator would not regulate auto dealers.

President Obama had personally lobbied against efforts to exclude auto dealers from tougher oversight, since dealers are a major source of auto loans, one of the most common types of consumer loans.

The House proposal would also give states more oversight of national banks, when states pass tougher consumer protection laws. Although, this provision could get changed again.

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