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Cantero v. Bank of America

In this case, plaintiff Alex Cantero sued Bank of America for failing to pay interest on his mortgage escrow account, as required by New York law. The bank argued that the National Bank Act preempts the state law, and the Court of Appeals for the Second Circuit agreed, adopting a broad standard under which all state laws that “exert control” over a national bank’s exercise of a federal banking power are preempted, regardless of whether the state law has a significant effect on the bank’s exercise of that power. The plaintiff filed a petition for certiorari, and the Supreme Court granted review.

In an amicus brief on behalf of Public Citizen, Consumer Federation of America, National Association of Consumer Advocates, National Consumer Law Center, and Public Justice, we explained that the Second Circuit’s sweeping standard for preemption is contrary to the standard for preemption of state consumer financial laws codified by Congress in the Dodd-Frank Act and that broad preemption of state consumer financial laws harms consumers. In a unanimous decision issued on May 30, 2024, the Court agreed that the Second Circuit had not applied the standard set forth in the Dodd-Frank Act, which requires a practical assessment of the nature and degree of the interference caused by a state law. The Court vacated the court of appeals’ decision and remanded the case for consideration under the proper standard.