So Far, Banks Don't Get Everything on Their Wish List
Yesterday, the Senate voted on two amendments to S. 3217 involving
“preemption.” These amendments determine which parts of the government will be allowed to protect consumers – state or federal level agencies, Attorneys General, current regulators, the new CFPA, etc. More people looking out for consumers is better, especially since the existing regulators at the federal level have not traditionally shown much interest in this area. Keeping state-level cops on the beat is particularly important. Taking them off the beat is a sneaky way to gut consumer protection.
What ended up happening in the Senate neither great not terrible for consumers. An amendment from Senator Carper passed by a vote of 80 – 18 — but the amendment was improved from its original version (which is discussed below). Here’s how Lauren Saunders, from the National Consumer Law Center, puts it:
“Senator Dodd and Senator Carper have reached a deal to modify Senator Carper’s amendment #3949 on the role of states in protecting consumers under the Wall Street reform bill. The deal compromises a bill further that is already full of concessions to the banks and the bank regulators who failed us, but it does not give in to the bank demands to remove the states entirely from their responsibility to protect their residents.
“State attorneys general will be able to take action to enforce new consumer rules against banks that violate those rules if the new Bureau or bank regulators do not. But the deal makes it harder for states to play their traditional role as first responders if banks engage in unfair or deceptive actions that are not yet covered by federal protections.”