Calif. court rules out local subprime mortgage laws

Mon Jan 31, 2005 07:29 PM ET

SAN FRANCISCO, Jan 31 (Reuters) - Local governments in California may not impose lending rules for mortgages carrying high interest rates for people with risky credit backgrounds, the California Supreme Court ruled on Monday.
Writing for the majority in a 4-3 decision, Justice Janice Rogers Brown said California's legislature has exclusive authority over mortgage lending laws.

Allowing local governments to go beyond state rules on "predatory" lending in the subprime mortgage market would create a market filled with "potentially hundreds of competing and inconsistent measures," Brown wrote.