SAN FRANCISCO -- The California Supreme Court says local governments can't regulate mortgage-lending operations that saddle heavy interest rates on home buyers who don't qualify for traditional loans.

Today's 4-3 decision prevents Oakland and Los Angeles from enforcing their local mortgage rules, which were stayed pending the high court's ruling. It also blocks other cities from adopting similar lending ordinances.

At issue is so-called subprime lending to people with risky credit histories at interest rates five or six percentage points higher than traditional loans. Consumer advocates consider the practice to be predatory and say poor and elderly borrowers have lost their homes because they couldn't make high monthly payments.

Ruling in a challenge to Oakland's ordinance, the divided court said that only the California Legislature can set lending controls, which it did in 2001. Allowing cities or counties to expand upon state mortgage laws would create a hodgepodge of unworkable rules, in the court's opinion.