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Federal Preemption Must Be Explicit

Supreme Court and the States: Business Wins, Voting Rights Lose, and a Mixed Bag on Criminal Justice

As the Supreme Court marches to the Right, corporate interests continue to thrive at the expense of state regulatory powers.  "This has been a very successful year for the business community," said Miguel Estrada, a Washington appellate lawyer who represents many key corporate interests before courts in Washington, D.C."  This session at the U.S. Supreme Court, as this Dispatch will highlight, had an almost uniform tilt towards business versus state regulatory authority.  In other areas like election law, the tilt was against poor voters who faced restrictions on their right to vote, though the term was a more mixed bag on criminal justice and other issues before the Court.

Gutting State Regulation of Insurance under Bush Administration's Financial Oversight "Reform"

While the financial crisis developed over a number of years in the subprime mortgage sector, federal regulators were asleep at the wheel as greedy lenders often took advantage of working families.  Worse, when states tried to step in with new state policies to tighten oversight of predatory lenders, federal officials blocked those state consumer protections, making the effects of the meltdown even worse for families. 

States Barred from Protecting Consumers Hurt by Faulty Medical Devices, Says Supreme Court

In one more example of lax federal agencies being empowered to block tougher state protection of consumers, the Supreme Court ruled yesterday that states are barred from protecting consumers from faulty medical devices, such as breast implants, if the Federal Food and Drug Administration (FDA) has already approved those devices.

Why States Matter

Conventional wisdom inside the D.C. Beltway holds that on major issues like health care or energy independence, it's fine for state legislators to play with their legislative toys in local sandboxes, but that it's really up to the "grown-ups" in the federal government to fix big problems. In national policy debates, state governments are usually treated as a tiny sideshow to the top billing of national legislation.

Industry Looks to Federal Rules to Preempt State Regulation

Suddenly, the news is filled with stories about industry lobbyists marching up to Capitol Hill in Washington, D.C., asking to have their industries regulated:

The Predatory Lending Bubble and How the Feds Made it Worse

The trouble in the subprime lending market is sending ripples through Wall Street.  One of the biggest subprime lenders, New Century, has been de-listed from the New York Stock Exchange.

States Condemn Federal Undermining of Local Laws

At their Spring national gathering, leaders of the National Conference of State Legislatures (NCSL) condemned increasing federal regulatory and legal restrictions on state authority in areas ranging from consumer protection to criminal law:
"Federal regulatory preemption is nothing more than a backdoor, underhanded means by which unelected federal bureaucrats impose their will on the states," [said] New York state Sen.

Supremes May Undercut State Tax Powers

State governments offer businesses tens of billions in tax incentives each year to invest in their states-- corporate subsidies that many advocates see as wasteful giveways but that others see as a lifeline for their communities.

Feds Propose Gutting State Protections Against Predatory Lending

North Carolina was the first state to pass a law reining in shady predatory lending practices, such as steep prepayment penalties, balloon payments and the sale of high-cost loans to borrowers who could qualify for lower rates. Soon a number of other states followed with similar laws and the result, according to a new study, is that homeowners now save $9.1 billion per year.