My friend on the Hill has confirmed the Washington Post’s claim that the big banks have lost their bid for exemption from state regulations.
But only in the House. My friend says that the too big to fails are going to try to kill the bill in the Senate.
As the Post summarizes the battle in the House:
The House Financial Services Committee is expected to vote Tuesday to let state governments protect bank customers by imposing restrictions that go beyond existing federal laws, according to congressional and industry sources.
The move would roll back a doctrine called preemption that has allowed big banks to answer solely to federal regulators. The banks argue that operating under a single set of rules is more efficient and results in lower prices for customers. But the Obama administration, which is pushing for the change, regards preemption as a cause of the crisis because it prevented state regulators from quashing obvious abuses.
The change essentially would unleash 50 additional regulators on the largest banks.
Large banks have fought bitterly against the proposal, which they regard as one of the most problematic components of the administration’s financial reform plan, but they have been unable to sway House Democrats.
Call your Senator and demand that state banking regulations be allowed to be as tough as the state wishes.