Senate Seeks to Limit State Powers Over Banks

WASHINGTON (CN) – The Senate passed an amendment Tuesday that would limit states’ authority over national banks as part of financial reform. Senators voted 80-18 to give states some authority over federally chartered banks but lets federal regulators have the final say.

     Under the measure, brought by Sen. Tom Carper, D-Del., state attorneys general could enforce consumer protection policies established by the new federal consumer protection agency, but federal bank regulators could put a stop to consumer protection cases brought by states.
     The Treasury Department’s Office of Comptroller of the Currency also could invoke federal preemption, which limits the ability of states to go after national banks.
     Senators voted 55-43 Tuesday against a provision brought by Sen. Bob Corker, R-Tenn., that would have denied states any powers over the banks.
     The Senate is expected to hold a final vote on the financial reform package later this week.

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