The result of the Watters v. Wachovia case is that certain state regulations of national-bank subsidiaries will be preempted (just as state regulation of national banks themselves is often preempted).

Makes sense. Many state lending regulations are counterproductive and actually drive up the cost of credit for consumers (and sometimes reduce the availability of credit as well).

The net result of credit regulations can be to dry up credit and force the would-be borrowers to use cumbersome credit substitutes, like costly installment purchases containing disguised interest.

By increasing the cost of credit, state lending regulations also often undermine the purpose of laws facilitating national banks, which are intended to provide needed credit.

Unlike state regulators, federal regulators like the OCC often take into account both the benefits and the costs to consumers of credit regulations, producing something more likely to lead to an optimal regulatory balance and a healthy banking system.

The dissent in Watters contains some disturbing arguments, relying on judicially-concocted presumptions against preemption that have no basis in constitutional text. Preemption should be applied neither liberally nor narrowly, but rather in a manner that furthers Congressional intent and is consistent with statutory language.

I understand Chief Justice Roberts' sentiment at oral argument that a national bank subsidiary shouldn't be able to have its cake and eat it too (be chartered under state law yet avoid all state rules).

But Justice Stevens' dissent, which he ultimately joined, goes well beyond that relatively narrow argument to launch a broad-brush attack on preemption in general that is not necessary to dispose of the case.

Disclosure: I was one of the attorneys who submitted the amicus brief of economics and scholars, including Professor Zywicki, in the Watters v. Wachovia case.

Strange, I agree with the dissent. Implied (as opposed to express) preemption is what has no basis in the constitutional text. And while implied preemption does have the benefit of promoting uniformity, it also has the drawback of discouraging experimentalism and damaging federalism. Since uniformity and experimentalist seems to be legislative determinations, there is nothing odd about asking Congress to speak up when it intends to strike down state law.