Wells Claims Victory in California

Wells Fargo & Co., San Francisco, has claimed victory for the bank and its mortgage subsidiary over the California Department of Corporations.Judge Garland Burrell Jr. of the Federal District Court in Sacramento ruled that the Office of the Comptroller of the Currency has the sole right to regulate national banks and their subsidiaries and that federal law supersedes state law. The dispute between the state and Wells Fargo stems from the question of when a lender can start charging interest. "As we've said time and time again over the past several months, charging interest beginning when a loan is made to the borrower is just common sense," said Wells Fargo chairman and chief executive Richard Kovacevich. ".... That is the fair and most practical way to do it. Forty-nine other states and our regulators all agree." A spokesman for the Department of Corporations said the regulator is required by the state constitution to appeal the ruling because only an appellate court ruling can stop it from seeking regulatory authority. The spokesman said the department's quarrel is not with when Wells Fargo started charging interest, but with the fact that the company touted its California licenses in its marketing while it was in violation of the state statute. It is that Wells Fargo allegedly misled consumers, not the law's provisions on charging interest, that is the issue for the department, he said.