Geithner urges independent U.S. financial watchdog

* Obama admin statement comes amid tough U.S. Senate fight

* Geithner marks implementation of new credit card rules

* Consumer group: banks devising new 'tricks and traps'

WASHINGTON, Feb 22 - The Obama administration on Monday urged support for a U.S. financial consumer watchdog that is strong and independent, pushing Senate Democrats to resist compromises sought by Republicans and bank lobbyists.

Treasury Secretary Timothy Geithner said the administration is still fighting to consolidate the fragmented authority of seven separate agencies into a single, independent and accountable Consumer Financial Protection Agency (CFPA).

Geithner's remarks came in a statement marking the implementation on Monday of tough new rules for the credit card industry, signed into law last year by Obama as his first clear victory in a major push to tighten financial regulation.

After the worst banking and capital market crisis since the 1930s, Obama in mid-2009 also proposed creating the CFPA. The House of Representatives endorsed the president's proposal in December as part of a sweeping financial reform bill.

However, in recent weeks the CFPA has become the main obstacle to a bipartisan Senate deal on financial reform.

Senate Banking Committee Chairman Christopher Dodd, a Democrat, is working closely with Republican Senator Bob Corker, a committee member, on crafting an agreement that they hope will win broad support. But the CFPA remains an issue.

Democrats want an independent agency with expansive powers, saying it is needed to shield Americans from predatory mortgages and abusive credit cards. Republicans want to block the CFPA or weaken it, an objective shared by lobbyists for banks who oppose it as an excessive intrusion on business.

As originally proposed, the CFPA would centralize consumer protection laws and staffs now located and managed within the Federal Reserve, the Federal Deposit Insurance Corp and other agencies criticized for doing a poor job ahead of the crisis.

Seeking compromise, Dodd in recent weeks has discussed multiple options with Republicans, but has not struck a deal.

The only compromise proposal still in play, aides said, is one that would make the CFPA a unit of a new bank super-cop that Dodd favors, the Financial Institutions Regulatory Administration (FIRA). Still disputed, however, is how much autonomy and rule-writing power to give the CFPA director.

Dodd was discussing a compromise with Senator Richard Shelby, the banking committee's top Republican, but their talks collapsed last month over the consumer watchdog issue.

Corker, stepping into the breach left by the Shelby impasse, has said that failure to work out the CFPA issue could prevent Congress from producing any reform bill.

The Consumer Federation of America, a lobbying group, applauded the implementation of the new credit card rules, but said that more is needed to shield consumers.

Large credit card issuers are already coming up with new tricks and traps to extract as much money as possible from consumers, said Travis Plunkett, a federation spokesman.

That's why we need the Senate to enact the Consumer Financial Protection Agency, so that consumers will have a cop on the beat to stop continuing credit card company antics. (Reporting by Kevin Drawbaugh; Editing by Dan Grebler)