The U.S. district court in Sacramento has ruled in favor of National City Bank of Indiana and its mortgage affiliate in a suit against the California Department of Corporations.

The order, released Wednesday, granted a summary judgment and permanent injunction to plaintiffs in a dispute over whether the state agency had the right to enforce a "per diem" interest law at the subsidiary of a national bank.

The unique statute prohibits California mortgage lenders from charging interest on a loan for more than one day before the recording of the mortgage. Last year the commissioner for the department found that the bank's National City Mortgage Co. had violated the statute.

National City's application for summary judgment "is granted on their claim that the [National Bank] Act preempts the commissioner from exercising visitorial powers" over the mortgage company, wrote Judge Garland E. Burrell Jr. of the U.S. District Court for the Eastern District of California.

The complaint brought by National City Bank, a subsidiary of National City Corp. in Cleveland, followed a similar suit by the bank subsidiaries of Wells Fargo & Co. of San Francisco. In that case the same judge ruled in Wells' favor.

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