US banks have another 50 problems. The Supreme Court on Monday partially overturned rules preventing states from holding national banks to account. Federal pre-emption refers to the various ways that federal law can override state rules – in this case under the 1864 National Bank Act. The court found, however, in a 5-4 decision that while state officials cannot demand documents or inspect national banks at will, they are permitted to bring lawsuits under their enforcement powers. Requiring that states use the courts at least means they must first assemble solid evidence or risk the embarrassment of having their case dismissed.

Bank regulation is heading from asleep-at-the-wheel to control freakery. More oversight is merited. But the prospect of banks dealing with each state’s competing, inconsistent concerns is overwhelming and impractical. In this case, involving the New York Attorney General’s office, the fair lending rules in question were identical at the state and federal level. But there is another danger. The Treasury’s plans for a new consumer protection agency go further, specifying that states should be able to “adopt and enforce stricter laws” than those drawn up nationally. This would tamper with so-called “conflict pre-emption” by setting federal rules as the floor, not the ceiling, in protecting consumers.