House Debates Financial Rules Overhaul, Reins in State Powers

By Alison Vekshin and Lorraine Woellert

Dec. 10 (Bloomberg) -- The U.S. House debated legislation today to toughen rules policing Wall Street after leaders quelled a Democratic revolt by members seeking to scale back states’ power to regulate national banks.

The New Democrat Coalition of 68 pro-business lawmakers won concessions after demanding consideration of a proposal to bar states from overriding federal consumer-protection rules for banks. Financial companies support pre-emption, to avoid a patchwork of state laws, while consumer groups and state attorneys general want states to impose tougher rules on banks as part of the overhaul of Wall Street regulations.

The legislation “makes it very, very unlikely that we’ll see a repeat of the economic problems we had before,â€