“The plan would do away with the Office of Thrift Supervision, replacing it with a system aimed at closing gaps in coverage and keeping institutions from shopping for the most lenient bank regulator. The consumer agency would place new restrictions on lenders and mortgage brokers, requiring them to offer simple loans to consumers.”

Basically, banks can decide whom to charter themselves with based on whose set of rules is most conducive to their business model. There are different agencies to oversee banks, credit unions, thrifts, etc. Some banks are state chartered, and others are ‘national banks’ that are not subject to state regulation. They want all lenders to play by the same rules–basically minimizing diversification of bank products to minimize risk.