High Court steps into US subprime crisis

The Financial Times reports:

The US Supreme Court on Tuesday stepped into the subprime lending crisis with a potentially far-reaching ruling that limits the power of individual states to regulate mortgage lending.

The ruling came as federal bank regulators responded to criticism that they had been slow to act over the crisis and cleared the way for lenders to offer relief to distressed homeowners.

Regulators told banks they would “not face regulatory penalties” if they offered borrowers new terms.

The Supreme Court ruled 5-3 that banks regulated by the federal Office of the Comptroller of the Currency had a broad shield from additional state regulation.

The saga continues.