WFS Financial Inc. said a federal court ruled that the Irvine-based automobile financing company may operate in Wisconsin without state licensing and certain other state requirements.
The decision by the U.S. District Court of the Western District of Wisconsin is the first federal-court ruling addressing whether an operating subsidiary of a federal savings bank enjoys such immunity, said WFS Financial, an operating subsidiary of Western Financial Bank. Rather than being subject to state laws, federal savings banks are regulated nationally by the Office of Thrift Supervision, WFS Financial said.
The Office of Thrift Supervision issued regulations that extended immunity from state laws to operating subsidiaries of federal savings banks. The state of Wisconsin had argued that those regulations were beyond the office's authority.