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Facebook WASHINGTON  States may not regulate mortgage-lending subsidiaries of national banks, the Supreme Court ruled Tuesday in a decision that undercuts state efforts to curb predatory practices but ensures that lenders won't be subject to a mix of state and federal rules. By a 5-3 vote in a Michigan case, the justices said subsidiaries of federally chartered banks can be regulated only by the U.S. Office of the Comptroller of the Currency and are shielded from states' licensing rules. States and consumer advocates had argued that federal law alone was not sufficient to protect borrowers from abusive lenders. And on Tuesday, some, including the National Community Reinvestment Coalition, said the court's decision was a blow to consumers. The decision, which rejected arguments by all 50 states, affirms numerous lower-court rulings. Dissenting justices noted that "consumer protection is quintessentially" a state field and said they found it "especially troubling that the court so blithely pre-empts Michigan laws designed to protect consumers." The case arose amid concerns about predatory mortgages and escalating delinquencies in "subprime" loans to borrowers with impaired credit. Michigan Attorney General Mike Cox said the ruling will make it harder for the states, which are in a position to monitor local mortgage foreclosures, to supervise lenders and weed out potential problems. Edward Yingling of the American Bankers Association countered that "avoiding a patchwork of duplicative and conflicting federal and state regulations makes it easier for national banks to grant credit to customers across state lines." From 1997 to 2003, Wachovia Mortgage followed Michigan law requiring lenders to open their books to state examiners. In 2003, when it became a wholly owned subsidiary of Wachovia Bank (WB), it said it no longer needed to meet state rules. National banks are regulated by federal law and are exempt from state rules. State officials said that without registering, Wachovia Mortgage could no longer lend in Michigan. But the Supreme Court made clear that subsidiaries of federally chartered banks are protected from state regulation. Robert Long, a Washington lawyer who argued the case for Wachovia Bank, said it's now clear that "when the bank chooses to make mortgage loans through an operating subsidiary, it's subject to the same regime." Share this story: Digg del.icio.us Newsvine Reddit Facebook Conversation guidelines: USA TODAY welcomes your thoughts, stories and information related to this article. Please stay on topic and be respectful of others. Keep the conversation appropriate for interested readers across the map.