Rifts are emerging among Senate Democrats over how much power the federal government should have under the Wall Street overhaul bill to pre-empt state consumer regulations.

By Silla Brush at The Hill

Centrist Democrats argue Senate Banking Committee Chairman Chris Dodd’s (D-Conn.) financial bill should do a better job of reaching a middle ground between state and federal powers. Democratic Sens. Tom Carper (Del.) and Tim Johnson (S.D.) are among those raising concerns, according to several industry and congressional sources.

Meanwhile, many liberal Democrats and consumer advocates support Dodd’s approach, and some are looking for ways to give stronger powers to states.

The balance of federal and state power is at the heart of the debate over a new federal regulator on consumer financial products. As part of its effort to overhaul Wall Street, the White House has pushed hard for more than a year to give state attorneys general and other state officials the power to pursue tougher regulations than imposed by the federal government.

The White House, most Democrats and consumer advocates say the federal government has too often overridden state regulations.

FULL STORY

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