The number one legal priority for business, we've been hearing for the last few years, is federal pre-emption. Corporations would rather live with one federal regulatory regime than the rules of 50 states -- even if a Democrat is the number one federal regulator.
Now, from the other side of the coin, state attorneys general are telling President-elect Barack Obama that pre-emption is their top priority too -- curbing it, that is. In a briefing paper sent to the transition team, the National Association of Attorneys General asks the next administration to resist expansion of federal pre-emption, urging instead that the traditional role of states in consumer protection be preserved.
The state role is especially important, the paper states, as legislation is crafted to handle the credit crisis and mortgage foreclosures. Interestingly, the AGs say federal pre-emption of states in enforcing banking laws "contributed significantly to the ongoing mortgage and credit disasters at the heart of the recent financial crisis." It is critical, they tell Obama, that state AGs continue to be "56 cops on the beat," with the regulatory authority to impose standards on lending institutions. (Why 56, not 50? The association represents the AGs of the 50 states, the District of Columbia, and Puerto Rico, as well as American Samoa, Guam, the Virgin Islands, and the Northern Mariana Islands.)
The AGs also ask for greater cooperation between the states and federal law enforcement agencies through an enhanced role for the Executive Working Group on Prosecutorial Relations, which brings together federal, state, and local prosecutors for regular meetings.
The association also urges restoration of federal grant programs for law enforcement, and offers specific suggestions in the areas of consumer protection, the environment, antitrust, cybercrime, and Medicaid fraud enforcement, tobacco and drug abuse. The full briefing paper is available here.
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