WASHINGTON — The Supreme Court's decision Monday to let states have enforcement authority over national banks could open the floodgates for lawsuits from state attorneys general and bolster momentum for President Obama's regulatory restructuring plan.

The surprise 5-to-4 ruling was a devastating blow to the Office of the Comptroller of the Currency, which had previously won every high court challenge of its preemption power, and its full impact may not be totally clear for some time.

But observers said it gives states an opportunity to pursue legal action against national banks in enforcing state fair-lending laws, though it also limited their means to do so. Under the ruling, state enforcement agencies cannot examine banks or use subpoenas to engage in so-called "fishing expeditions," looking for evidence of wrongdoing.

Still, observers agreed that attorneys general are likely to try to use the opening if they acquire or develop evidence against a national bank.

"Most attorney generals were waiting until this case was decided," said Arthur Wilmarth, a professor at George Washington Law School. "Given the amount of private litigation we've seen, it certainly wouldn't surprise me to see some state enforcement actions."

Politically, the case could also help propel the administration's plan to create a consumer protection agency. This plan would effectively end preemption, requiring the new agency to set minimum federal standards that it would enforce but allowing states to go further. State attorneys general could also enforce federal and state standards against state-chartered and national banks.

Bankers were already arguing that the plan would force national banks to comply with 50 state laws and subject them to over-burdensome regulation on multiple fronts. Many had used recent preemption cases as a shield, arguing that Obama is seeking to overturn 140 years of case law on the subject.

But the Supreme Court ruling weakens that argument by allowing supporters of the new agency to argue that it is a relatively moderate change.

"The language from the court case will be embraced by leaders of congressional committees that are supportive of ongoing and continued efforts to implement state law provisions through a state enforcement mechanism with congressional approval and/or acquiescence," said Tim McTaggart, a partner in Pepper Hamilton LLP.

The Supreme Court ruling was a rare thing in Washington — it caught nearly everyone by surprise. Though the ruling had been predicted to come on Monday, the high court was widely expected by both sides to rule in favor of the OCC.

Only two years ago, in Watters v. Wachovia, the Supreme Court had ruled that state consumer protection laws did not apply to national bank subsidiaries. During oral arguments in April, several justices had appeared skeptical of arguments that states had enforcement powers over national banks. Many observers had considered the decision a foregone conclusion, though there were lingering concerns over why the court had agreed to hear the case so soon after deciding another preemption case.

Justice Antonin Scalia, writing for the majority, said that though state attorneys general lack "visitorial" powers to examine national banks, they clearly could sue them for alleged violations of state laws.

"When, however, a state attorney general brings suit to enforce state law against a national bank, he is not acting in the role of sovereign-as-supervisor but rather in the role of sovereign-as-law-enforcer," Scalia wrote. "Such a lawsuit is not an exercise of visitorial powers, and thus the comptroller erred by extending the definition of visitorial powers to include prosecuting enforcement actions in state courts."

The case of Cuomo v. Clearing House Association LLC stems from a 2005 investigation by then-New York Attorney General Eliot Spitzer, who requested information from several national banking companies — including Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. — to determine whether they engaged in discriminatory practices.

The OCC objected to the information request, arguing that it had sole visitorial powers and it supported a lawsuit by Clearing House Payments Co. LLC representing the banks that disputed Spitzer's request.

The current New York attorney general, Andrew Cuomo, who inherited the case, argued that visitorial authority does not exclude a state from enforcing its own nonpreempted laws.

Though the decision was a victory for Cuomo and other attorneys general, it also threw up obstacles to pursuing actions against national banks. For one, it was unclear how many state fair lending laws are not preempted.

It was also uncertain how attorneys general could bring suit without the ability to examine a bank directly or to issue a broad subpoena.

"Although there is no longer an across-the-board bar [to] state attorneys general, the [c]ase and the existing federal law does impose a roadblock to such actions," said Howard Cayne, a partner at Arnold & Porter. "First, it doesn't allow the attorney general to conduct investigations."

He said the court set a bar that the state must have a basis for a court action before acting and must go through the slower judicial mechanisms.

L. Richard Fischer, a partner in the Morrison & Foerster law firm, said the court found middle ground by limiting the states' subpoena power.

"The part I thought presented the greatest risk was the ability of a state attorney general to use the subpoena power to examine bank records; the court clearly said they can't do that," he said. "On the other hand they can bring an action like any other civil litigant. I think what you will see is new cases brought and maybe a continuation of this one by Cuomo, but I don't see a rush. Had there been an ability to use the subpoena power, then there would have been a full case attack."

John Ryan, an executive vice president of the Conference of State Bank Supervisors, dismissed the likelihood of a rush by states to litigate.

Instead, he said, the ruling would encourage cooperation between state and federal regulators. "There was a perception this would unleash the uncoordinated patchwork of regulation. That is not the world as we see it, and we actually have a lot of coordination on our front," Ryan said. "I sometimes see more coordination on the state front than the federal level … . If there are real issues out there, expect the states to address them, but it hasn't been done in a totally uncoordinated way."

The OCC declined to make an official available for this story, but said in a statement that it too was working on cooperating with states.

The American Bankers Association, however, said the decision could have negative repercussions. "What it is going to do is potentially impose another regulation on top of the OCC and create confusion when there is a diver[gence of] approach in enforcing state laws," said Greg Taylor, a vice president and the ABA's senior litigation counsel.

He also pointed to the ambiguity the case creates.

"There is the potential for them to be caught in the crossfire if there is disagreement [between] the OCC and a state on a noncompliance state law," he said. "How they resolve that will be interesting. It may result in litigation. In that sense, this may provide more chaos than clarity."

How long such chaos would last is another question. The Treasury Department is expected as early as today to send language to Capitol Hill for creating a consumer protection agency.

"What this litigation has done is, it has changed the burden of inertia on the national bank and the OCC to go to Congress to change," said John Cooney, a partner at Venable. "The person that has to seek a change is always at a disadvantage [compared with] one that has to protect the status quo."

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