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Response to President's memo on Preemption of State Laws

Thursday, May 21, 2009

We applaud President Obama for reaffirming the important role of state law in protecting consumers.

To that end, we call on federal banking regulators to withdraw their misguided and harmful preemption policy so that state regulators can once again protect their residents from unfair and deceptive financial products. We needn't look further than the current mortgage meltdown for evidence that federal preemption in the financial arena has been unwise and detrimental for tens of millions of American families. The inability of states to enforce their own consumer protection laws ? even as federal regulators stood idly by ? was a major factor in the reckless lending that has cost taxpayers trillions of dollars.

Federal protections should be a floor, not a ceiling, that allow state officials to take further steps if needed to curb the kind of abusive practices at the root of economic problems we now face. National and state laws are both needed if we're to provide, in the President's words, 'independent safeguards for the public.'

For more information: Kathleen Day at (202) 349-1871 or kathleen.day@responsiblelending.org; or Ginna Green at (510) 379-5513 or ginna.green@responsiblelending.org; Charlene Crowell at charlene.crowell@responsiblelending.org at (919) 313-8523.