Bankers get partial win on state consumer rules

[Joanne98]

Source: AP


WASHINGTON — The Senate has handed bankers a partial victory by voting to limit the ability of states to impose their own consumer rules on federally chartered banks.

The measure by Democratic Sen. Tom Carper of Delaware rolled back provisions in an underlying financial regulation bill that broadened the authority of states. The vote was 80-18

Current law permits federal regulators to issue a blanket rule overriding state laws concerning licensing, credit terms and loan disclosures. State attorneys general cannot enforce federal laws.

Carper's provision would allow federal regulators to override state law on a case-by-case basis and permit attorneys general to enforce federal regulations.

The amendment passed after the Senate voted down 55-43 an amendment preferred by bankers that was offered by Republican Sen. Bob Corker of Tennessee.



Read more: http://www.google.com/hostednews/ap/article/ALeqM5g7ffRdswXTlfgaQS0FCOZmrvbwcAD9FPEVDG1

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Five Reasons the Carper Amendment Must Be Defeated

One of the more menacing amendments circling the financial reform bill is a proposal by Senator Tom Carper (D-DE) that would bar states from enforcing consumer protection laws against national banks and would make it easier for banks to claim immunity from state laws they don't like.

This dangerous measure has some legs.

The big bank lobby has described it as their "number one" priority. It has support from conservative Democrats and Republicans. The Washington Post editorialized in favor of it today. Although the White House opposes Carper's amendment, Senator Dodd seems lukewarm at best on the question of state authority and has refused to rule out including a version of Carper in his "manager's amendment," a package of negotiated changes to the bill that Senators who want financial reform to pass have little choice but to accept.

Here's why Carper's amendment would be a disaster:

1. It would hamstring states and prevent them from catching and stopping dangerous consumer lending practices before they metastasize into another crisis. State regulators routinely spot problems well before they become national epidemics. So it was with abuses in the mortgage industry. As early as 1998, states, like Illinois, New York, and Georgia, were taking predatory lenders to court, connecting the dots to Wall Street, and passing laws that limited risky, high-cost mortgage terms.

http://www.huffingtonpost.com/stacy-mitchell/five-reasons-the-carper-a_b_580291.html

No matter what happens on cloture, amendments continuing today
Some amendment highlights today:

The Senate will take up the Carper weakening amendment starting at 2:15 pm, eastern. This amendment strips the authority of state Attorneys General to enforce state laws against large financial instutions, and has some Demcoratic support. Zach Carter explains:

Over the past decade, state regulators tried to crack down on subprime outrages, but federal regulators stepped in to protect the megabanks. If we want to establish a fair financial system, we have to empower states to take action against abusive banks.
That’s what makes a new amendment from Sen. Tom Carper, D-Del., so dangerous. Carper’s plan is to ban states from enforcing their own laws against big national banks like Wells Fargo, Citigroup, and Bank of America. This is an overt attempt to take cops off the beat and allow banks to get away with outright abuses. While doing lipservice to “strong consumer protection,” Sens. Bob Corker, R-Tenn., John Ensign, R-Nev., D-Mark Warner, D-Va., Tim Johnson, D-S.D., Ben Nelson, D-Neb., and Evan Bayh, D-Ind., have all gone to bat for America’s largest banks.

This is the kind of amendment that can actually sink the bill if adopted. For years, federal bank regulators at the Office of Comptroller of the Currency (OCC) asserted broad powers to preempt state laws, and courts generally backed them. But in 2009, the Supreme Court reversed those decisions, giving states the ability to go after big banks through the court system. Carper’s amendment wouldn’t just institutionalize a destructive status quo-it would actively deregulate, further empowering banks to take advantage of the public.

This is a very dangerous amendment. Read Zach’s whole piece for more.

http://blogs.alternet.org/speakeasy/2010/05/18/wall-street-reform-moves-forward-heres-whats-going-on/

[xchrom]

1. Recommend - quelle shock and awe. Nt

[Mojorabbit]

2. It is so damn discouraging. nt

[onethatcares]

3. are not state rights the trump over the fed?

except of course when it comes to womans' rights, marijuana usage, abortion, and a few other things I can't remember at present.

You would think the teabaggers would be all over this as a states right issue.

But, then again, guess who owns our government?