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LANSING, Mich. – In a case described as having “national significance” and concerns the ability of the Michigan Commissioner of the Office of Financial and Insurance Services to supervise non-bank mortgage lenders in order to protect consumers and the public interest, OFIS Commissioner Linda Watters appeared in the U.S. District Court for the Western District of Michigan on March 5 for a hearing on a Motion of Summary Judgment in the case of Wachovia Bank, N.A. and Wachovia Mortgage Corporation v. Linda Watters. Wachovia is seeking a Motion for Summary Judgment imposing a permanent injunction prohibiting the Commissioner from enforcing Michigan’s mortgage laws against any mortgage lenders operating as a subsidiary of a bank. Wachovia also seeks a declaration by the court that Michigan’s mortgage laws are fully preempted by the National Bank Act. According to the OFIS, if the court rules for Wachovia, mortgage subsidiaries of nationally chartered banks would no longer be regulated by state banking commissioners, “stripping them of their authority to protect consumers.” “I believe Michigan consumers expect their state regulator to pursue complaints against national bank subsidiaries operating in Michigan when federal authorities decide to take no action,” said Watters. “This case has national significance, and a loss would be a double-whammy – a loss for consumers and states rights.” In addition to hearing oral arguments from the parties involved, one Amici argued on behalf of each side. Professor Art Wilmarth from the George Washington University School of Law and a nationally recognized expert of banking law argued on behalf of OFIS. A lawyer from the OCC argued for Wachovia Mortgage. An amicus brief of the Attorneys General of 40 states and the District of Columbia was also entered on behalf of OFIS.

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