(Reuters) - A federal appeals court on Monday rejected a Dallas suburb's controversial law that would have prevented illegal immigrants from renting housing.

In a 9-6 ruling, the 5th U.S. Court of Appeals in New Orleans upheld a lower-court decision to block the ordinance in Farmers Branch, Texas, finding that the law interfered with the federal government's authority over immigration policy.

The law would have required renters in the suburb to register with the city and obtain an occupancy license. The city's building inspector would verify an applicant's immigration status with the federal government, and landlords who rented to unregistered tenants would face criminal fines or face losing their rental licenses.