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Preemption Back In

Anthony Randazzo
December 11, 2009, 10:05am

Last night, as the House continued debate on The Wall Street Reform Act, a positive step was made on consumer protection:

One key change approved Thursday night was the addition of language that would permit federal laws governing consumer protection to continue to preempt those set by individual states. The bill that arrived on the House floor would have allowed states in most cases to impose tougher restrictions, using federal standards merely as a floor rather than a ceiling. The financial industry has lobbied relentlessly against that structure, saying it would saddle national banks with layers of burdensome bureaucracy and cause confusion among consumers.

This by no means abdicates the dozens of other harmful provisions in the bill, but it is one less thing to damage businesses if the bill passes.

Unfortunately there is no much good news beyond that. An amendment by Barney Frank for the Congressional Black Caucus was added that will take $4 billion from the Troubled Asset Relief Program and put it towards housing programs. Apparently that is just a big pile of money now, as opposed to emergency-spending-that-no-one-wanted-to-do-but-was-seen-as-necessary-to-keep-banks-from-destroying-the-global-financial-system.

A vote is expected on the bill later today.


Anthony Randazzo is Director of Economic Research


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