SAN FRANCISCO (Bloomberg) The state mortgage lending licenses for Wells Fargo & Co., California's largest mortgage lender, have been revoked by state regulators.
The decision Thursday by the California Department of Corporations won't affect the San Francisco-based company's ability to make and service home loans under authority given by federal regulators, bank spokeswoman Janis Smith said.
Wells Fargo, a nationally chartered bank, said federal law supersedes state law. Its dispute with California centers on a law that says lenders can't charge interest until the day before a mortgage is recorded officially with the state. Wells Fargo says the law is impossible to follow.
"If Wells Fargo is not going to abide by California's laws, it has no right to California's licenses," Corporations Commissioner Demetrios Boutris said in a statement. In February, the agency threatened to pull the licenses after the bank refused to refund certain charges state regulators considered excessive.
"It makes no difference to our customers whether we have or don't have California mortgage licenses because we are a subsidiary of a national bank operating under a charter issued by the federal government, not by state government," Pete Wissinger, Wells Fargo mortgage chief, said in a statement.
The Department of Corporations is challenging Wells Fargo in federal court. A hearing is scheduled for May 5 to determine whether state regulators or the Office of the Comptroller of the Currency has jurisdiction over the bank's mortgage lending in California, the department said in a statement.