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OFIS Commissioner Watters Goes to Bat for Consumers in U.S. Supreme CourtFOR IMMEDIATE RELEASE
November 28, 2006
Contact: OFIS (toll-free) 1-877-999-6442
Media/Press calls: Kathy Fagan - 517-335-1700
Court’s decision to hear Watters v. Wachovia case on banking regulation has national implications
LANSING – Office of Financial and Insurance Services (OFIS) Commissioner Linda A. Watters announced that a case brought on behalf of OFIS appealing the right of state government to protect consumers through the regulation of mortgage subsidiaries of national banks will be heard by the United States Supreme Court on November 29, 2006.
In Watters v. Wachovia, the issue is whether state-chartered subsidiaries of national banks are exempt from state regulation because of their relationship with a national bank – even when the Office of the Comptroller of the Currency (OCC) fails to follow up on a consumer complaint.
In 2003, Wachovia Bank converted a mortgage company through which it had conducted business in Michigan into an operating subsidiary of the national bank headquartered in North Carolina. Wachovia then informed OFIS that it would no longer be required to be registered in Michigan, claiming that regulations passed by the OCC preempts state mortgage laws over state-chartered subsidiaries of national banks.
OFIS notified Wachovia that without registration, it would no longer be allowed to conduct mortgage lender, broker and servicer activities in Michigan.
Wachovia sued OFIS and won in federal district court and the 6th Circuit Court of Appeals. OFIS appealed these decisions and the Supreme Court agreed to hear the case.
“This case has huge implications for state regulators across the country,” Commissioner Watters said. “The enforcement of consumer protection laws has always been a traditional role of state government. State regulators are best equipped to respond to consumer protection matters within their respective jurisdictions, and mortgage lending regulation is not an exception.”
Watters noted that numerous briefs have been filed in support of OFIS’ position, including a brief prepared by the New York Attorney General and endorsed by every state attorney general in the nation, including those of Washington, D.C., and Puerto Rico.
Other briefs in support were filed by the Maryland Commissioner for Financial Regulation and the American Association of Residential Mortgage Regulators; the National Conference of State Legislatures, the National Governors Association, the Council of State Governments, the National League of Cities, the National Association of Counties, the International City/County Management Association, the U.S. Conference of Mayors, and the Conference of State Bank Supervisors; the National Association of Realtors, and the Center for State Enforcement of Antitrust and Consumer Protection Laws; and the Center for Responsible Lending, which was signed by 12 public interest groups and 17 law school professors.
“We’re very appreciative of the show of support we have received from so many organizations, because it demonstrates the national significance of the case,” Watters said. “Michigan consumers and consumers in every state deserve to be protected by regulators who are looking out for their best interests.”
For more information on the Supreme Court hearing, contact OFIS toll-free at (877) 999-6442.
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