Bankers get partial victory; win some limits on state consumer laws

Bankers get partial win on state consumer rules

WASHINGTON — The Senate has handed bankers a partial victory by voting to limit the ability of states to impose their own consumer rules on federally chartered banks.

The measure by Democratic Sen. Tom Carper of Delaware rolled back provisions in an underlying financial regulation bill that broadened the authority of states. The vote was 80-18

Current law permits federal regulators to issue a blanket rule overriding state laws concerning licensing, credit terms and loan disclosures. State attorneys general cannot enforce federal laws.

Carper’s provision would allow federal regulators to override state law on a case-by-case basis and permit attorneys general to enforce federal regulations.

The amendment passed after the Senate voted down 55-43 an amendment preferred by bankers that was offered by Republican Sen. Bob Corker of Tennessee.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

WASHINGTON (AP) — The Senate has rejected an effort to prevent the federal government from rescuing states or municipalities facing a financial crisis.

The Senate mustered only 47 of the 60 votes it needed to overcome procedural hurdles to pass the measure.

Republican Sen. Judd Gregg of New Hampshire offered the proposal as an amendment to a broad financial regulation bill. Gregg said federal taxpayers should not have to bail out states that fail to be fiscally responsible. Several states face budget shortfalls, with California leading the way with deficit estimated at $19.1 billion.

Gregg’s measure would have allowed aid in cases of disaster or other emergency.

Democratic Sen. Christopher Dodd of Connecticut, made an impassioned defense of the government’s responsibility to provide aid if necessary.