Watters v. Wachovia Bank, N.A., et al.

Case Updates

Agreeing with NCLC, the Supreme Court upheld a lower court ruling that the National Bank Act preempts Michigan from exercising supervisory powers over a mortgage-issuing subsidiary of Wachovia Bank. Because it decided the issue as a matter of statutory construction, the Supreme Court did not reach the regulatory preemption issue and NCLC continues to monitor the issue as it percolates in the lower courts.

NCLC urged the Supreme Court to uphold a lower court ruling that regulations promulgated by the Office of the Comptroller of Currency preempt Michigan from exercising supervisory powers over a mortgage-issuing subsidiary of Wachovia Bank. Urging the high court to reject the state’s efforts to alter the legal framework governing regulatory preemption, NCLC argued federal preemption of state and local law -- which is supported by the Supremacy Clause of the U.S. Constitution -- is exceedingly common, highly beneficial to companies that operate in a national economy, and poses no threat to federalism.