Industry News

Supreme Court to hear case on banking regulation

States should hold authority, say Realtors trade group, attorneys general

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The U.S. Supreme Court will grant a hearing on a case related to state vs. federal authority to regulate operating subsidiaries of nationally chartered banks. In a Sixth Circuit U.S. Court of Appeals decision in December, Judge Boyce F. Martin Jr. affirmed a district court judgment which found that federal regulations "preempt conflicting Michigan laws" relating to authority of federal bank subsidiaries. The case, Wachovia Bank v. Watters, was brought by Linda A. Watters, commission of the Michigan Office of Insurance and Financial Services. Wachovia Bank, a national banking firm, launched Wachovia Mortgage in January 2003 as a wholly owned operating subsidiary in Michigan, according to the court ruling. In April 2003, Wachovia Mortgage advised the state of Michigan that it was surrendering its lending registration in the state, and the state's commissioner advised Wachovia Mortgage that the company would no longer be authorized to conduct mortgage lending business in the st...