Big banks lose clout in the House while state regulators get a boost

As Congress gets more and more angry about excessive bonuses for bankers, the nation's biggest banks could lose one of their favorite defenses against stronger consumer protections -- the preemption doctrine. The House Financial Services Committee will likely vote Tuesday to allow state governments to protect their citizens by permitting them to impose restrictions on national financial institutions that go beyond existing federal laws.

This move will roll back the banks' gains from a hard-won battle for exemption from state laws that dates back as far as the 1980s. That's when national banks were allowed to expand beyond state lines. Those banks did not want to answer to 50 different states' laws, so they gradually fought for and won the right not to comply with state laws.