WASHINGTON. The Federal Reserve, which was criticized for failing to protect consumers in the run-up to the credit crisis, would be the home of a new financial consumer watchdog under an agreement announced yesterday.

 

House of Representatives Democrats said they have agreed to go along with a Senate proposal to put the watchdog inside the Fed, backing down from their earlier support for setting up a powerful new stand-alone agency.

 

The House’s retreat on the issue resolves a lingering dispute and moves historic Wall Street reform legislation closer to completion.