Predatory Lending War Creates Unlikely Foes: State Regulators Versus Federal Agencies Wielding U.S. Constitution, Preemption Efforts to curb abusive lending practices appear to be blurring the once clear line between state and federal regulation of mortgage lending. In the wake of recent regulatory opinions and proposed rules restating and clarifying the supremacy of federal authority in the mortgage arena, industry focus has shifted to a California case that could have immense legal implications for lenders