The Treasury Department's plan to invest up to $250 billion in at least nine and potentially thousands of financial institutions may let it steer long-scrutinized consumer lending products and practices, observers said.

Any such investment would be a far less severe change for a financial institution than being taken over by the government, which was the fate of IndyMac Bank, Fannie Mae, Freddie Mac, and American International Group Inc. this year. The government would get nonvoting preferred shares, and warrants to buy common shares, in the banks and thrifts, but only in certain circumstances would it get board seats.

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