Martin Flumenbaum, left, and Brad S. Karp Federal Preemption of State Banking Laws
The Second Circuit's 'Cantero' decision clarifies the preemptive scope of the National Bank Act: If a state law purports to control an enumerated or incidental power of a national bank, then it is preempted by the NBA regardless of its impact on a bank's revenues or management.
October 25, 2022 at 11:00 AM
8 minute read
Financial Services and BankingIn Cantero v. Bank of America, N.A., 49 F.4th 121 (2d Cir. 2022), the U.S. Court of Appeals for the Second Circuit addressed the preemptive effect of National Bank Act (NBA) and the Dodd-Frank Wall Street Reform and Consumer Protection Act on state laws regulating banks. Plaintiffs in two putative class actions argued that Bank of America's failure to pay interest on mortgage escrow accounts ran afoul of a New York statute requiring payment of two percent interest on such accounts; Bank of America responded that the NBA preempted the state-law claims.
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