At my school, they give you 3 tries to pass each step. After failing it the third time you are either dismissed or made to remediate by repeating the first two years or just the second year(step 1) or repeating the third year (Step 2)
Is a pretty rare thing though...but people sometimes have problems.
About 6 mos ago, KCOM had reps from both the NBME & NBOME come speak with us. Currently, for all 3 steps of both USMLE & COMLEX the retakes limits are set by the individual state licensing boards and they range from a minimum of 3 attempts to a max of 6 or 7. However, the Fed of State Med Lic Boards has recently adopted a recommendation, not binding as of yet, that all states adopt a common limit for all three steps of both exams. Furthermore, that both the NBME & NBOME felt that a limit of 3 would be wisest in the context of current medico-legal attitudes.