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Cantero v. Bank of America

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Supreme Court of the United States
Cantero v. Bank of America
Term: 2023
Important Dates
Argued: February 27, 2024
Decided: May 30 2024
Outcome
vacated and remanded
Vote
9-0
Majority
Chief Justice John Roberts • Clarence Thomas • Samuel Alito • Sonia Sotomayor • Elena Kagan • Neil Gorsuch • Brett Kavanaugh • Amy Coney Barrett • Ketanji Brown Jackson

Cantero v. Bank of America is a case that was decided by the Supreme Court of the United States on May 30, 2024, during the court's October 2023-2024 term. The case argued before the Supreme Court of the United States on February 27, 2024.

In a 9-0 opinion, the U.S. Supreme Court vacated the United States Court of Appeals for the Second Circuit decision and remanded the case for further proceedings, holding that the did not analyze whether New York’s intereston-escrow law is preempted as applied to national banks in a way that was consistent with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Barnett Bank of Marion Cty., N. A. v. Nelson. Justice Brett Kavanaugh delivered the opinion of the court.[1] Click here for more information about the ruling.

HIGHLIGHTS
  • The issue: The case concerned the National Bank Act. Click here to learn more about the case's background.
  • The questions presented: Does the National Bank Act preempt the application of state escrow-interest laws to national banks?[2]
  • The outcome: In a 9-0 opinion, the U.S. Supreme Court vacated the United States Court of Appeals for the Second Circuit decision and remanded the case for further proceedings, holding that the did not analyze whether New York’s intereston-escrow law is preempted as applied to national banks in a way that was consistent with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Barnett Bank of Marion Cty., N. A. v. Nelson.[1]


    • The case came on a writ of certiorari to the United States Court of Appeals for the Second Circuit. To review the lower court's opinion, click here.

    Timeline

    The following timeline details key events in this case:

    Background

    Cantero v. Bank of America involves the National Bank Act of 1864 (NBA). The Court was asked to determine if the NBA preempts the application of state escrow-interest laws to national banks.[2]

    The NBA is a federal statute that regulates national banks. It instituted a dual banking system which enabled federal and state governments to charter and regulate banks. It also granted national banks the power to issue real estate loans and offer escrow services.[3][4]

    New York General Obligations Law (GOL) § 5-601 requires banks that maintain escrow accounts related to mortgage agreements to pay interest on those funds. In 2018, the New York Department of Financial Services changed the minimum interest rate to "the lesser of two percent or the six-month yield on United States Treasury securities."[2][3][4]

    On August 3, 2010, Alex Cantero purchased a house in Queens, New York that was financed through a home mortgage loan from Bank of America (BOA). His loan agreement required him to deposit funds into an escrow account for property taxes and insurance premiums. According to Cantero, BOA paid no interest on the escrow funds.[2][3][4]

    BOA argues that the NBA preempts GOL and they should be allowed to operate under uniform national rules regarding their escrow-interest policies.[3][4][5]

    The district court found that the NBA did not preempt GOL due to GOL's limited "degree of interference" with the powers granted to national banks. They denied BOA's motion to dismiss the case. The United States Court of Appeals for the Second Circuit reversed the district court's ruling, finding that GOL would infringe on a banking power granted by the NBA.[3][4]

    Questions presented

    The petitioner presented the following questions to the court:[2]

    Questions presented:
    “ Does the National Bank Act preempt the application of state escrow-interest laws to national banks?

    [6]

    		”

    Oral argument

    Audio

    Audio of oral argument:[7]




    Transcript

    Transcript of oral argument:[8]

    Outcome

    In a 9-0 opinion, the U.S. Supreme Court vacated the United States Court of Appeals for the Second Circuit decision and remanded the case for further proceedings, holding that the court did not analyze whether New York’s interest-on-escrow law is preempted as applied to national banks in a way that was consistent with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Barnett Bank of Marion Cty., N. A. v. Nelson (1996). Justice Brett Kavanaugh delivered the opinion of the court.[1]

    Opinion

    In the court's majority opinion, Justice Brett Kavanaugh wrote:[1]

    “

    Federal law extensively regulates national banks such as Bank of America and expressly preempts some (but not all) state laws that regulate national banks. This case concerns the standard for determining when state laws that regulate national banks are preempted. As relevant here, the Dodd Frank Act of 2010 expressly incorporated the standard that this Court articulated in Barnett Bank of Marion County, N. A. v. Nelson, 517 U. S. 25 (1996). 12 U. S. C. §25b(b)(1)(B). That standard asks whether a state law ‘prevents or significantly interferes with the exercise by the national bank of its powers.’ Ibid. Because the Court of Appeals in this case did not apply that standard in a manner consistent with Dodd-Frank and Barnett Bank, we vacate and remand.[6]

    		”
    —Justice Brett Kavanaugh

    Text of the opinion

    Read the full opinion here.

    October term 2023-2024

    See also: Supreme Court cases, October term 2023-2024

    The Supreme Court began hearing cases for the term on October 2, 2023. The court's yearly term begins on the first Monday in October and lasts until the first Monday in October the following year. The court generally releases the majority of its decisions in mid-June.[9]


    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 1.2 1.3 U.S. Supreme Court, "CANTERO ET AL., INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED v. BANK OF AMERICA, N. A.," accessed May 31, 2024
    2. ↑ 2.0 2.1 2.2 2.3 2.4 Supreme Court of the United States , "ALEX CANTERO, SAUL R. HYMES, and ILANA HARWAYNE-GIDANSKY, v. BANK OF AMERICA, N.A., On Petition For A Writ Of Certiorari To The United States Court Of Appeals For The SecondCircuit" May 3, 2023
    3. ↑ 3.0 3.1 3.2 3.3 3.4 United States Court of Appeals for the Second Circuit , "Cantero v. Bank of Am." September 15, 2022
    4. ↑ 4.0 4.1 4.2 4.3 4.4 Supreme Court of the United States , "Cantero v. Bank of America, N.A." accessed January 23, 2024
    5. ↑ Supreme Court of the United States , "ALEX CANTERO, SAUL R. HYMES, and ILANA HARWAYNE-GIDANSKY, v. BANK OF AMERICA, N.A., BRIEF FOR RESPONDENT" February 16, 2023
    6. ↑ 6.0 6.1 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
    7. ↑ Supreme Court of the United States, "Oral Argument - Audio," argued February 27, 2024
    8. ↑ Supreme Court of the United States, "Oral Argument - Transcript," argued February 27, 2024
    9. ↑ SupremeCourt.gov, "The Supreme Court at Work: The Term and Caseload," accessed January 24, 2022
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