House panel says states can protect consumers

[cal04]

Source: Associated Press

The House Financial Services Committee voted Wednesday to let states regulate large national banks when it comes to protecting consumers from fraud and abuse unless federal regulators intervene.

The measure, approved by voice vote, is a blow to the banking industry, which doesn't want to have to comply with myriad state laws that are often tougher than federal regulations.

Democratic Reps. Melvin Watt of North Carolina and Dennis Moore of Kansas offered the measure as an amendment to a broader bill that would establish a new federal agency dedicated to protecting consumers. The committee was on track to pass that bill later Wednesday or Thursday.

Democrats are casting Watt's amendment as a compromise because it would allow federal regulators to exempt banks from state laws on a case-by-case basis. But otherwise, federally chartered banks would have to comply with state rules when it comes to such matters as interest rates and fees associated with credit cards and mortgages.

Read more: http://news.yahoo.com/s/ap/20091021/ap_on_go_co/us_financial_overhaul

[OffWithTheirHeads]

1. This is change I can believe in! K&R

[JDPriestly]

2. Maxine Waters is right. States should have the right to

regulate banking within state borders especially interest rates. California mortgage laws are fundamentally different from the consumer's point of view than are the laws of some of the other states. California is a trust deed state. That changes the power relationship between lender and borrower and is the reason that California holds on to its Depression laws that protect certain consumers under certain conditions against deficiencies that is having to lose their homes and also pay the remaining mortgage debt. It is my understanding (I could be wrong, but this is how I remember it) that it is often much easier and quicker to foreclose on consumers in California than in some other states.

[SlingBlade]

3. K & R

[shraby]

4. Which state's laws will be upheld? The state the branch

bank is in or the state that the headquarters is in? I'm sure the headquarters will be in the state with the most lenient banking laws. That needs to be determined BEFORE the bill is passed.

[mbperrin]

6. The state the bank is operating in would control the transaction rules.

I'm amazed, but this could be big!

[TheCoxwain]

5. Carpet Bomb those bastards....

[surrealAmerican]

7. Good.

I hope the states are ready to regulate for their residents.

[toopers]

8. It will certainly be easier for the residents to affect laws within . . .

there own states than at the federal level!