Solely giving greater consumer protection authority to federal bank regulators, for example, won't work. Without strong state enforcement, consumers will not be protected in the financial marketplace.

Of course, Congress could also consider giving authority over banks to the FTC, not to the bank regulators. Recently, the FTC actually worked with local Maryland regulators at the Montgomery County, Maryland, Division of Consumer Affairs to hold KMart accountable for unfair practices related to gift cards. While we are not completely happy with that settlement, we liked the working together with state enforcers part a lot. Meanwhile, the federal bank regulator known as the OCC was assisting Bank of America's successful efforts in federal appellate court to preempt a New Hampshire state gift card law. (Decision and a law professor blog entry discussing the case, SPGGC vs. Ayotte.)

Of course, the odds of Congress giving authority over national banks to the FTC aren't good at all and the odds of it restoring authority to states would depend largely on it holding a continuing series of oversight hearings to expose the weak efforts of federal regulators to police the marketplace.

Giving more authority to federal regulators won't help consumers much, if at all, since federal regulators also lack the will to help consumers. Giving back authority to state regulators would help consumers by putting more cops on the corporate crime beat.

Instead of working with state regulators to make the marketplace work better, too many federal bank regulators would rather burn down their houses and kill their dogs, or at the very least, preempt them out of business, as the OCC continues to demonstrate with its latest New Hampshire effort on behalf of a bank, rather than on behalf of aggrieved consumers.