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WASHINGTON (Reuters) � Elizabeth Warren, the Obama administration's new consumer financial czar, offered an olive branch to the largest U.S. banks on Wednesday, saying she wanted their help in developing a principles-based approach to rulemaking.

Warren told the Financial Services Roundtable that the new Consumer Financial Protection Bureau she is setting up does not intend to layer on complex new rules that add compliance costs and encourage avoidance by banks.

"Instead of creating a regulatory thicket of 'thou shalt nots,' and instead of using ever more complex disclosures that drive up costs for lenders and provide little help for consumers, let's measure our success with simple questions," Warren said in remarks prepared for delivery to the banking trade group.

She said these should include whether customers can understand financial products, figure out their costs and risks and compare products in the marketplace.

Among her first tasks in launching the new agency is to develop a new, simplified disclosure form for credit cards. She said an average consumer should be able to read the form in about four minutes, with 90 percent comprehension and "understand the deal."

Created by landmark financial reform legislation enacted in July, the new agency will take over consumer protection functions from several existing regulatory agencies.

Warren reiterated that she's not interested in dictating costs, terms or product features -- that's up to the marketplace, but for the market to function properly, information needs to be transparent.

"I come to Washington as a genuine believer in markets and a genuine believer that the purpose of regulating the consumer credit market is to make that market work for buyers and sellers alike: a level playing field where the best products at the best prices win," she told the group, which represents the 150 largest U.S. integrated financial institutions..

Warren, a Harvard Law School professor and consumer advocate, was named a special adviser to President Barack Obama and Treasury Secretary Timothy Geithner on September 17 to set up the agency, much to the chagrin of Wall Street.

Long a fierce critic of deceptive mortgage and credit card lending practices, she has been criticized by many financial executives for what they see as a lack of practical banking experience and a predisposition that banks are guilty parties.

Since shifting from her previous role as bailout watchdog chairing the Congressional Oversight Panel, Warren has spent time mending fences with the financial industry.

Earlier on Wednesday, she told reporters that the traditional rulemaking approach would put smaller banks at a disadvantage because it would raise compliance costs and "locks in an adversarial relationship" between banks and their customers, letting the rules shape the products.

She said she wants credit cards and mortgages to be more like toasters or cell phones, where customers can easily compare the costs and benefits.

To do this, she said she wants to set goals and work with the industry to meet them through clear, simple rules that do not require much "fine print" or pages of legal disclaimers.

"Layering 10,000 rules is not going to turn this into a working relationship," she told reporters. "Maybe that's the way we have to go. This is the invitation to another approach, and I hope they will work with me."

(Reporting by David Lawder; Editing by Bernard Orr)

WASHINGTON (Reuters) � The House of Representatives stepped up pressure on China to let its currency rise faster, passing a bill on Wednesday that could penalize Chinese goods, as lawmakers blamed it for lost jobs in America.

The bill is likely to fan the flames of a long-running dispute with China over trade and jobs, even though passage in the Senate remains far from a sure bet.

The bill passed with solid bipartisan support just over a month ahead of mid-term elections as voters focus on the still-struggling economy and persistently high unemployment. Many lawmakers both in the House and the Senate have complained for years that China's policies create an unfair trade advantage, but this is strongest step taken yet.

The bill treats China's exchange rate as a subsidy, opening the door to extra duties on Chinese goods entering the United States, some of which are already subject to special levies.

It passed by a vote of 348-79, with 99 Republicans joining 249 Democrats to pass the bill. Five Democrats and 74 Republicans voted no.

Any vote in the Senate, however, won't come until after congressional elections on November 2 when the U.S. political landscape could be greatly changed.

"China's persistent manipulation of its currency contributes to the outsourcing of American jobs and poses a very serious problem that requires real action," said House Ways and Means Committee Chairman Sander Levin.

House Speaker Nancy Pelosi said the bill would give President Barack Obama leverage in talks with China and "make it clear that if China wants a strong trading relationship with the United States, it must play by the rules."

The Obama administration has not taken a stance on the bill . But after the vote, a Treasury Department spokeswoman said the legislation reflected the "serious concerns" in Congress about China's currency practices.

"The president and Secretary Geithner share those concerns. They both have said repeatedly that China needs to allow a significant, sustained appreciation over time," she said.

Before the House vote, China's central bank reaffirmed its pledge to increase the flexibility of the yuan and improve the way it manages the exchange rate.

Obama and Chinese Premier Wen Jiabao talked about China's currency and huge trade surplus with the United States on the sidelines of the U.N. General Assembly last week.

Despite the yuan's modest gains against the dollar since Beijing allowed more movement in June, International Monetary Fund economists estimate the yuan is 5 percent to 27 percent undervalued.

Representative Dave Camp, the top Republican on the Ways and Means Committee, said he voted for the bill "because it sends a clear signal to China that Congress's patience is wearing out."

On the opposing side, Representative Jeb Hensarling, a Texas Republican, said he feared China could retaliate against the bill by shutting its market to U.S. farm exports, offsetting any gains in U.S. manufacturing jobs.

U.S. retailers, who source heavily from China, also expressed concern about being caught in the cross-fire.

Many lawmakers said the United States was already in a trade war with China and needed new tools to fight it.

Senator Charles Schumer, a Democrat who has been one of the loudest critics in Congress of China's trade policy, said after the vote that he was ready to take up the cause in the Senate. "We plan to push our bill in the Senate when we return later this year," he said.

GLOBAL CURRENCY WAR?

China's tight leash on the yuan is under intense scrutiny as countries around the world look to export their way back to economic health, raising concerns they will intentionally weaken their currencies to gain an edge.

Japan intervened this month to weaken the yen for the first time in six years.

The House move is certain to further roil relations with Beijing, which resents the criticism and says the decision about the speed of currency reforms is its alone.

China, the largest foreign buyer of U.S. government debt with holdings of nearly $847 billion as of July, also says its big trade surplus with the United States is due to Americans saving too little and no longer making the goods China sells.

While Obama has not taken a position on the legislation, House Majority Leader Steny Hoyer said lawmakers worked with the White House to ensure the bill did not violate WTO rules.

Treasury Secretary Timothy Geithner told Congress two weeks ago that Washington would work with Group of 20 nations to push China for faster appreciation but several allies expressed reluctance to join the effort. G20 leaders are set to meet in Seoul on November 10-11.

ECONOMISTS DOUBT BILL WILL WORK

The House bill allows the Commerce Department to treat "fundamentally undervalued currencies" as an illegal export subsidy so that U.S. companies can request a countervailing duty to offset China's price advantage.

That is expected to encourage steel, paper and other import-sensitive U.S. industries to file more cases. The United States now has countervailing duties on less than 3 percent of its imports from China, which totaled $296 billion in 2009.

Some economists said they understood the politics of the debate but questioned whether the bill would bring back American jobs or prod China to move faster on currency reform.

"We consume a lot. The Chinese save a lot. We're going to run a trade imbalance with them," said Derek Scissors of the Heritage Foundation.

China and the United States have a difficult but vital diplomatic relationship, not least in dealing with nuclear threats from Iran and North Korea.

WASHINGTON (Reuters) � U.S. regulators will put up a united front before a divided Congress on Thursday, promising to cooperate on hundreds of new rules aimed at preventing Wall Street excesses from triggering another financial crisis.

In testimony obtained by Reuters on Wednesday, Federal Reserve Chairman Ben Bernanke and other top regulators said they were well aware of the daunting task ahead.

The hearing before the Senate Banking Committee marks regulators' first joint testimony since the financial regulatory overhaul was signed into law two months ago.

"It is imperative that regulators work together, with both speed and openness in the implementation of the Dodd-Frank Act in order to dispel uncertainties and foster a smooth transition by the industry," said Sheila Bair, chairman of the Federal Deposit Insurance Corp.

The reform act, named after the two Democratic lawmakers who spearheaded what became a lengthy, contentious process, was intended to close some of the gaps in oversight exposed after the U.S. housing bubble burst in 2007.

Included in the law were the creation of a "systemic risk" council of regulators to look out for potential financial trouble spots, and new measures designed to safely shut down failing firms and avoid costly, unpopular government bailouts.

Skeptics, however, question whether the provisions really will end the problem of firms being too big to fail. Some Republicans have said they would roll back certain regulatory measures if their party wins control of Congress in November's elections. They are likely to use the hearing as an opportunity to express some of their reservations about the law.

Bair said the reforms included in the legislation provided tools necessary to "end" too big to fail.

"It must be made clear to these companies that their financial folly could result in losses to shareholders and bondholders and in the dismissal of their senior managers," she said.

REAMS OF RULES

Bernanke said past regulations did not keep pace with profound changes in the financial system, and the Fed was committed to working with other agencies to implement the new law.

"All told, the act requires the Federal Reserve to complete more than 50 rulemakings and sets of formal guidelines, as well as a number of studies and reports, many within a relatively short period."

The FDIC has 44 rules to write, and the other agencies have scores more.

"Implementation will require extensive coordination among the regulatory agencies and will fundamentally change the way we regulate large complex financial institutions," the FDIC's Bair said.

The Commodity Futures Trading Commission said about 80 global and regional banks would have to register to continue to trade in contracts that let investors bet on a host of variables including interest rate movements and debt defaults.

Democrats are eager to argue that their response to the worst financial crisis in 80 years will crack down on financial firms' riskiest behavior without choking off economic growth, and that progress is already being made.

Senators on the panel said they would probe regulators on broad issues such as how they plan to avoid turf fights while also focusing on specifics such as how the law will affect community banks.

In addition to Bernanke and Bair, the list of witnesses includes Neal Wolin, a deputy Treasury secretary; Mary Schapiro, chairman of the Securities and Exchange Commission, Gary Gensler, chairman of the Commodity Futures Trading Commission; and John Walsh, acting Comptroller of the Currency.

The same group will convene Friday for the first meeting of the Financial Stability Oversight Council, a group created under the new law to detect risks to financial markets before they threaten to bring the system to its knees.

(Additional reporting by Rachelle Younglai and Roberta Rampton, Writing by Emily Kaiser; Editing by Tim Dobbyn)