Defeat for States In Bank Regulation Lawsuitby
Linda A. Watters, pictured here, lost a Supreme Court appeal last month. Why should you care?
Because in turning down her appeal, the Supreme Court ruled that state regulators like Watters, who is commissioner of Michigan's Office of Financial and Insurance Services, have no say over the mortgage lending of national banks (like Wachovia) and their operating subsidiaries. The ruling in Watters v. Wachovia was a blow to consumer watchdog organizations, which believe that state regulators are tougher on mortgage lending abuses than federal regulators are. But the feds and the nationally chartered banks applaud the ruling, which saves them from getting tangled up in 50 separate jurisdictions. Watters, not one to give up quickly, said she hopes the decision "will spur greater cooperation between state and federal regulators for the benefit of consumers."
If you want to know more, read this article from stateline.org, a website covering state government.