As of April 2007, the Supreme Court has ruled that states have no authority or control over business conducted by National Banks and by the subsidiaries of National Banks.

A subsidiary is a business that is owned and controlled by another, larger business or corporation, known as the “parent company.”

This ruling hinders State efforts to regulate predatory lending practices, as well as their efforts to impose other consumer protections on National Banks’ business activities.

This ruling says that national banks and their subsidiaries are not restricted by state laws, thus allowing prepayment penalties and other loan terms, which may be less favorable to borrowers.

So, even if a state has a law that prohibits certain predatory lending practices, National Banks and their subsidiaries are not required to obey.

For more information on this Supreme Court Decision, or to keep up to date on predatory lending news, check out Foreclosure FocusUSA Blog at:

http://activerain.com/blogs/usa_dave