Enlarge By Karen Bleier, AFP/Getty Images file The U.S. Treasury building in Washington, D.C. Big banks scored a couple of key victories Tuesday in the battle to shape the sweeping overhaul of financial regulation, following recent gains by consumer advocates. In a partial victory for banks, the Senate on Tuesday overwhelmingly passed an amendment that would largely prevent states from writing new laws to protect consumers from questionable financial products even if no federal law exists. However, the measure preserves states' authority to enforce federal rules. Separately, Sen. Richard Shelby, R-Ala., used a procedural tactic to block a proposal to ban banks from making the kind of proprietary trades in high-risk securities that helped fuel the financial crisis. The Senate could vote on the bill late this week. It must then be reconciled with the bill the House passed. The Senate passed the amendment limiting states' powers by an 80-18 vote after a compromise was reached between Sen. Chris Dodd, D-Conn., the bill's chief architect, and the amendment's Democratic sponsors. Under the compromise, federal bank regulators could more easily pre-empt states that pass new laws governing a financial product offered by national banks and thrifts. Dodd's original bill would have permitted states to pass such laws if a new consumer watchdog agency has not established similar rules. Financial institutions say letting states enact a patchwork of laws would confuse consumers and increase costs for providers as they tailor mortgages and other products to various jurisdictions. "We believe there should be strong consumer-protection laws, and they should be uniform," says Scott Talbott of the Financial Services Roundtable. However, states would gain new power to enforce federal law. The original amendment by Sen. Tom Carper, D-Del., — and another that was defeated — would have rescinded that authority, granted in the Dodd bill. Carper said the compromise "will give businesses certainty and provide an extra set of cops on the beat" to protect consumers. Consumer advocates say the subprime mortgage crisis might have been averted if states had the power to write their own rules and enforce federal laws. Ed Mierzwinski of the U.S. Public Interest Research Group says gaining "50 state consumer cops" that can enforce federal law is a victory for consumers. But Lauren Saunders of the National Consumer Law Center says states' inability to write new laws "makes it harder for states to play their traditional role as first responders" to shady practices. The amendment Shelby blocked would bar banks from making the types of trades that led to government bailouts and stop firms from betting against securities they sell. Sen. Jeff Merkley, D-Ore., a chief sponsor, said Republicans are "standing in the way of real reform." Guidelines: You share in the USA TODAY community, so please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Use the "Report Abuse" button to make a difference. You share in the USA TODAY community, so please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Use the "Report Abuse" button to make a difference. Read more