Boutris

In these cross-appeals concerning California’s regulation of residential mortgage lenders, we decide two issues: First, does the National Bank Act (“Bank Act”), 12 U.S.C. §§ 21 et seq., preempt the California Commissioner of Corporations’ (“the Commissioner”) exercise of investigative and licensing authority over “operating subsidiaries” of national banks? Second, does section 501 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA), 12 U.S.C. § 1735f-7a, preempt California’s per diem loan-interest statute?

The district court answered both questions in the affirmative. Wells Fargo Bank, N.A. v. Boutris, 265 F.Supp.2d 1162 (E.D.Cal.2003) (Wells Fargo II). For the reasons that follow, we affirm the district court’s conclusion as to preemption under the Bank Act but hold that the per diem loan-interest statute is not preempted by the DIDMCA.

I. Background

These appeals arise out of California’s attempts to require Wells Fargo Home Mortgage Inc. (WFHMI) and National City Mortgage Co. (NCMC), wholly owned subsidiaries of Wells Fargo National Bank and National City Bank of Indiana, respectively, to conduct audits of their residential mortgages. The…