The White House this week is fighting Senate Democrats over states' rights and the balance of power regarding financial oversight.
In a bipartisan amendment to financial regulatory reform legislation being considered in Congress, Senators want the federal government -- not state regulators -- to enforce protection laws on national banks and their subsidiaries.
But White House officials are pushing back, arguing that the states have a better on-the-ground understanding of the issues. From MSNBC's First Read:
Deputy Director of the National Economic Council Diana Farrell told reporters on a conference call that the amendment would have the net effect of weakening the new bill's regulations, as state watchdogs are more acutely sensitive to their local financial environment than are national regulators.
"States are better able to respond to abuses in local markets," Farrell said. "States and state attorneys general are in a unique capacity to understand where the violations are taking place," she continued.
Unsurprisingly, Democrat AG's Richard Blumenthal of Connecticut and Tom Miller of Iowa are criticizing the amendment. "It's just imperative that it be a joint effort," says Miller. "With mortgages, credit cards, and other transactions, there's no way the federal government can do the whole job," he continued.
Zach Patton -- Executive Editor. Zach has written about a range of topics, including social policy issues and urban planning and design. Originally from Tennessee, he joined GOVERNING as a staff writer in 2004. He received the 2011 Jesse H. Neal Award for Outstanding Journalism
E-mail: zpatton@governing.com 
From regulations to spending, the federal government can be a huge thorn in the sides of state and local governments. Written by Ryan Holeywell, GOVERNING FedWatch monitors all the money spent and all the mandates required by the federal government that effect states and localities.
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