Financial Law
2007
Watters v. Wachovia Bank, N.A.
550 U.S. 1 (2007)
Supreme Court of the United States
Issue
National bank operating subsidiaries, state licensing, and federal supervisory authority.
Facts
Michigan sought to apply state mortgage-lending registration, inspection, and enforcement requirements to Wachovia Mortgage, a state-chartered operating subsidiary of a national bank.
Holding
The Court held that the state requirements were preempted as applied to the national bank's operating subsidiary.
Reasoning
Justice Ginsburg's opinion treated the subsidiary's mortgage-lending activities as activities of the national bank for purposes of OCC supervision. The state could regulate generally applicable laws that did not interfere with banking powers, but it could not impose visitorial or licensing regimes on the federally supervised banking enterprise.
Why It Matters
Watters is important for the pre-crisis architecture of banking preemption, regulatory arbitrage, and the boundary between state consumer oversight and federal bank supervision.
Research Questions
- How does the allocation of regulatory authority affect coordination, expertise, and capture risk?
- Which private or systemic risks remain outside the court’s doctrinal inquiry?
Case Text and Citation
Cite the reported decision as 550 U.S. 1 (2007). The linked copy is provided for reading access and may be hosted by a court, institutional repository, or secondary case archive.
Open case text: Justia U.S. Supreme Court Center