A group of U.S. legislators, including self-described centrist Democrats appear to be lining up against the White House in its effort to establish a federal consumer protection agency, while instituting a massive overhaul of the rules that govern banks, lenders, investment firms and other financial organizations. In a move that is sure to please the banking and financial services industries, the politicians in questions want to remove a provision of the proposed legislation that would allow individual states to exceed whatever restrictions the new U.S. Consumer Protection Agency might set forth. According to Reuters, “the issue is likely to ignite a battle with liberal Democrats, who argue that the subprime-mortgage mess could have been avoided if states had been allowed to crack down on federally chartered institutions.” Nevertheless, centrists in the Democratic Party, who sit on the House Financial Services Committee said they are determined to rewrite the language of a bill to create the new protection agency so that, rather than creating a minimum level of regulation,a regulatory floor,, it will create a ceiling beyond which states would not be allowed to legislate new rules governing mortgage lenders or other financial services firms. Thom Senzee
