Wednesday, May 19, 2010

Senate amendment broadens states' leeway in cases against national banks

Senate amendment broadens states' leeway in cases against national banks; Washington Post

The Senate overwhelmingly approved Tuesday an amendment to the financial regulation bill awarding states more power to pursue cases against national banks, but preserving the right of a federal bank regulator to stop states from pressing some consumer protection cases.

The amendment sponsored by Sen. Thomas R. Carper (D-Del.) passed 80 to 18.

Under the amendment, state attorneys general gain the ability to pursue consumer protection cases against national banks based on rules set by a new consumer protection bureau, which would be housed in the Federal Reserve. The consumer watchdog will have the authority to enforce its own rules, but the Carper amendment would allow state attorneys general to play a role in enforcing those rules as well. ...

But the amendment also contains a provision, opposed by consumer groups, giving the Office of Comptroller of the Currency the ability to stop states from pursuing some consumer protection cases even if there is no federal law covering the issue. Under the compromise, there is a lower standard for the OCC to preempt state cases than was originally contained in the legislation.

Read the whole article here.

Comment: This is not a "win" for the states, but for the banks.

Break the special interest monopoly in the US Senate and the states (citizenry) will get real victories, not this smoke and mirror display created by Carper.

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