Wells Fargo Wins Appeal in Lending Case

By Jonathan Stempel, Reuters

A federal appeals court in California ruled that the operating units of nationally chartered banks cannot be regulated by states, but that California’s limits on mortgage interest charges were nevertheless valid.

Friday’s decision by the U.S. Court of Appeals for the Ninth Circuit in San Francisco, in a case involving Wells Fargo & Co., adds to a series of victories by big banks seeking to be regulated under federal laws rather than potentially stricter state laws.

The decision affirms U.S. District Judge Garland Burrell’s 2003 ruling that the National Bank Act and regulations issued by the Office of the Comptroller of the Currency pre-empt state regulation of the bank’s Wells Fargo Home Mortgage Inc. unit. But it reverses Burrell’s finding that the state cannot stop banks from charging interest too early.

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