Fed plan would shrink states' powers

By Pauline Vu, Stateline.org Staff Writer

Some state officials see the federal government’s plan to overhaul the country’s financial regulatory systems as an intrusion on their powers to enforce state laws, and state regulators warn that it could carry grave consequences for consumers.

Insurance rates could climb, efforts to fix the mortgage industry mess could be stalled and a grassroots banking system that paved the way for innovations such as interest-paying checking accounts would be threatened, they predict.