fifty four point eight eight would significantly interfere with bank of america's powers as congress intends those powers and that last part is critical because the born of bank case reminds us that the issue here  question of congressional intent we have a very unique situation here because congress has actually spoken directly about the exact type of state law that's an issue here in two thousand and ten as part of the dodd frank act congress expressly directed all creditors without accepting national banks to follow this exact type of state law in the mandatory escrow context now bank of america would like you to believe that that has nothing to do with national banks but think it's important to distinguish between the claims that we have there based on violations of the federal statute and claims that we have that are based on violations of the state statute or yes but as you recognize these this is the statutory provision the federal statutory provision and dodd frank because it's all of a piece that is there is a set of federal requirements were regarding escrow and they undoubtedly refer apply here but only as of two thousand thirteen right is that correct so far that part is correct in terms of there was no direct obligation under the federal law in other words there would not be a direct claim under the federal law in till two thousand and this provision that you're a lying on that incorporates state law for one purpose applies to the mandatory escrow those that are covered by the section so how do you get there well because our state law claims are premised on a state statute that has been in effect for forty years and this bank has operated under the assumption that it doesn't need to follow that because of federal preemption but we would submit that as of two thousand and ten not two thousand and thirteen as of two thousand and ten when congress expressed its intent in passing the dodd frank act bank of america's position was no longer a viable position because congress had made its intent clear that was in two thousand and ten and if it wasn't you know held in times of the stats we language such person and i wonder if this is the right case given that the mortgage agreement in this case predates the in ackman of the legislation the exactly the federal legislation but the state law has been on the books for forty years and national banks powers and the scope of those powers and how they relate to the state laws that issue i would submit that congress does intend to two thousand and ten was cleared not just with respect to what was directed by the statute but also in terms of how congress  i know you just saying that but there statutory language sharon make kelly how i can deal with that well because the statutory language evidence is congress's belief at the time in two thousand and ten that there is no problem with the application conceptually with the application of these exact state laws as to national banks it doesn't view it as a conflict it doesn't view it as an affront to national bank powers and that's clear but the entire doesn't know that argument goes to your preemption argument now the question is even assuming that your preemption argument is correct you're also assuming retroactivity no no because our state law claims are based on a statute that was an act one nine hundred seventy six we don't depend on retroactivity are you do you maintain that before the new statute there there was no preemption i think that's an open question that was certainly bank of america's position our position is at the very least as  but why is it that you're so sure that this type of escrow account is one that is captured well all of mr laws next agreements and there are three of them there was one in two thousand and one two thousand and one and two thousand  if it is the case that his agreements are not technically within the scope of sixteen thirty nine d it would be only by virtue of their timing because of the effective date but that most not because they were v a let guarantee law and you think they otherwise would qualify again setting aside the that what i'm calling of the sequence of events of your preemption argument absolutely yes there there are the these are mandatory escrow accounts because they're v a loans right that's correct the district court applied to basis for reaching the opposite logical it also would render the entire section meaningless and that's because the district court essentially reads this to say you need to follow these laws unless you don't and so by definition any entity that would be covered already needs to follow these laws so the s serve no purpose and so that could have been congress's intent fortunately there's a much more logical reading of the word applicable and that is that applicable state law means the law of the state where the property is located and what the section is saying is that if that particular state's law or if federal law prescribes you know paying escrow interest you need to act in a matter consistent with that law apple not all states have this type of law right correct applicable is about what i think you have a question about that i  relatively persuasive sitting alone but i noticed that the immediately preceding sections has the following administration and you harness with the law of the state if applicable where there are real property securing the credit consumer credit translation is located so i would have thought also that applicable meant the state where their real property securing the credit transaction is located but this immediately preceding sentence is if applicable it's pre context of g three which is the provision of issue in this case even among those states that have these laws there are variations in terms of the interest rates but also in terms of the types of escrow accounts that require interest to be paid and that's why absolutely none and this you know we were up here on the pleadings at this point so there's been absolutely no discovery there's been no showing of any interference with any of their businesses and we would submit that there is little if any interference certainly not rising to the level of significance but we don't know that right so what relief are you seeking well this court should reverse the district court's finding of preemption as to the state law claims and should reverse the dismissal of the direct federal statutory claims and remain for further proceedings so there would  this because of thirteen sixteen and eighteen well i think the i think you're correct and i was i was assuming that the court wasn't settled on that issue but that is correct our position is the analysis should begin and end with congress's language and s because it's an analysis that turns on congressional intent all of the cases the bank of america cites none of those involve that kind of situation where congress has spoken and that's a critical distinction for an analysis that turns on congressional intent the first place you should look  what has congress said about this right in all of the cases bank of america site the answer is nothing in this case the answer is congress has spoken directly about the very state statutes that are at issue one of the arguments they make is that if congress wanted to speak directly really directly they it different statute as opposed to the truth in lending act sure i mean essentially what the district court is saying there is that congress go only direct banks to follow state law by amending the n b a but that could not possibly be the case and you don't need to look any further than the o c c is interpreted regulation thirty four point four subsection v nine of that which is part of the savings clause says that the actual banks have to follow state laws that are made applicable by federal law it doesn't say made applicable by the national c hasn't actually interpreted this specific issue post doc frank they've made general statements that they think america cites to support their position that the law hasn't changed on this to the extent any of the o c c is interpretations could be read as saying that these states that it's a preempted that's invalid because it would contradict what congress has said the use you see has certain powers they certainly play a role in this scheme but they cannot contradict congress that's beyond the scope of their power  how did the case law shake out earlier i think the answer is likely yes likely that says so you think that the articulation of skidmore deference is not a change in the law no the that is a change in the law but but i thought you're talking about prior now i'm talking about post amendment postcard frank was i was is there an indication in by by articulating skidmore deference that congress was pushing back no i don't think so i don't think that's an indication of any change at all i though this became effective and twenty thirteen well the direct claim under the federal statute could have been brought into a twenty thirty until the effective date but the the operative date for purposes of the claims that relate to the state law violation is two thousand and ten you keep saying that because on the breach of contract they circle back to i think i'm not sure which my colleague that's asked the question but it wasn't until twenty thirteen that you could really stand out from the podium and say state or federal law requires this right no state law has required it i mean twenty ten you c it's a federal law if i thought the rest of your argument federal law is going to require this and twenty thirty no no state no no what you could say in two thousand and ten was state laws require this for forty years the bank has said we don't have to follow the game what the bank would say is yes that law's been on the books since one nine hundred seventy whatever it was and it's been preempted that's what they would think if that at all through this briefing ok right the preemption defense bill ceases to exist in two thousand and ten when congress makes its intent clear and that's because the clock leon so this is the part now you're repeating when we talk about congressional intent we're talking about something more conceptual something that doesn't break down into time periods in that matter right we're talking about how congress conceives of national bank powers and how that relates to the state laws issue and it's true that we can now that goes back to my retroactivity question which i i haven't heard a really clear answer why doesn't it apply at the time that the federal legislation was inactive going forward instead of going back and applying account that was his stablish before the legislation was passed like what in the statute tells me that i have to go back in time versus applying it from that date forward it doesn't when you talk about applying your correct he would apply it going forward for purpose provisions laid out in the statute right and i don't know that this escrow account is subject to the provisions of the accounts laid out in the statute not in the technical sense that we would be able to bring the direct claim under the statute until the effective did but in the sense that congress has expressed its intent more generally more conceptually on the subject in two thousand and ten it's made clear if they think the work was entered into should go all the way back at the very least though they should have been complying with respect to any escrow balances that relate to the two thousand and eleven agreement because that post dates the passage of done fred but we would submit that because the state law is forty years old the point is that as of tw ten the preemption defense no longer exists right because congress has made its intent clear with respect to how it conceives of national bank powers in this area even though we could not bring the direct claim under the federal statute in correctly dismissed plaintiffs claims because the national bank act in o c c regulations preempt california as a law requiring the payment of interest on escrow accounts this court can affirm that holding on either of t independent grounds first nothing in dodd frank or any other provision of federal law requires national banks to follow state state escrow laws in exercising their federal real estate lending powers second even if section sixteen thirty nine d impose such a requirement it would not help the plaintiff because his escrow account was established years before section sixteen thirty two thousand and eleven we wouldn't say constituted a new agreement there is a modification of some terms once the plaintiff fell behind in some payments but it wasn't you know two thousand and eight we had a refinance in two thousand and nine where effectively the two thousand and eight and eleven it really doesn't matter unless you accept this argument that congress is intent should be determined separate from the statute they enacted a good day to start because i think what what what's missing from the argument is yes do yet showed that this california statute significantly interferes why should you have to do that because under the national bank act preemption cases this is decided as a matter of law and the question is a lot of those cases that are pretty darned frank so just time and it also codified the skidmore standard and one way to read that and many commentators have read that is it is an underlining an emphasis to say hey we mean it right i mean right but i don't think it would change the analysis from a question of law to a question of fact and before i want to address it on the merits but i will point out that there was not an argument made before or in the district court that this should be a factual basis and they did not argue that they should analysis to look we would look at the nature of the state law and determine the extent to which it interferes so i think the cases i would point this court to which were both i guess post dodd frank enact meant that maybe before force majeure this court's decision in those and california supreme court's decision and parks both of those cases involve the california law that required credit card holders to to put notices on the convenience checks they gave to their users to let them know that even though this looks like a check it's actually a credit card transaction and both this court in rows in the california supreme court in park said that was decided as a matter of law and the pleading stage there was that law pose a significant interference with the exercise of national banks federal powers in both cases the plaintiff argued all the all they have to do is put language on top of the check that's not significant we should remain and for really it was it was following a trial but they didn't look to it didn't look to the evidence both and this is going back to rose what this court said and rose there's no amount of evidence that you could find during discovery that would change the analysis that the supreme court applied in franklin national bank and barnett bank which in both cases the court said federal law allows you to do this state law doesn't and that's a significant interference for purposes the national  arguing just about anything state law does is going to be too much and what am i to make with god franks case by case language it sounds like you want me to set this up this court doesn't have to follow that that's for the o c c and the district court did understand the court has concerns of this and i'm happy to respond to this but this is not really what they're arguing right there's no argument that is but your argument is very sweeping and it's our job to push against it and it seems to me like you want to make a really big expansive ruling i don't think we do and i will note that pre dogs frank there's no argument presented by the other side and no authority that would support that to say that this law was not preempted and it was clearly preempted under the o c c regulations i think it was preempted federal law is not preempted state or federal law that's a fresh range way to say that at a minimum we don't think it's strange to say that a preempt a law is not applicable i mean if the law is printed we think by definition it cannot be applied and you know the way we read section sixteen thirty nine d it's also important to start with fred this provision is stated in the conditional if prescribed by applicable state or federal law then it imposes a requirement we were that is imposing a separate threshold inquiry right before we get to this determination of whether there's a duty we determine is there a state law that can apply and if a state was preempted we say by definition it cannot apply and you look to as  the district or noted at the time dodd frank was enacted it was clear the laws of this sort were preempted when congress would have known that and congress is you look at his draft of the if prescribed by africa the law is congress would applicable state or federal law o c c certainly has the authority to impose requirements on federal banks and area national banks and if the o c c adopted a requirement then you would have applicable federal law so there's a reason why you wouldn't expect national banks to be excluded because it would have to apply with applicable federal law and the argument that somehow our reading renders the provision superfluities is just simply incorrect it's it still applies to state chartered banks and to to what federal court federal government says to state entities that as to which there is no possible preemption right now as a matter of this provision it also applies to non baked into these as a matter of fact federal law and that's a significant difference one of the applies it now also applies as a matter of federal law so if a non bank lender prior to dodd frank i had an obligation to pay interest and didn't do it that would be a violation of california law after dodd frank it is also a violation of federal law and here's why that's important because i violated this federal law it is now a violation of the truth in lending act which means it brings the supervision foresman under the power of the consumer financial protection bureau this is one of the main things that dodd frank was intended to do the non bank lenders were one of the leading linders of subprime mortgages and one of the things that congress thought was a problem is that there was no federal oversight of non bank lenders one of the main porch portions of dodge frank is to create the c f p be transferred to the c f p be enforcement in supervisory powers or federal consumer protection laws the truth in lending act  one of those if you look at fifteen u s c fifty five fourteen i believe it is cit section ten twenty four of the dodge frank it explicitly gives the c f p be supervisory authority over non depository lenders a supervisory thor authority that didn't exist before for what it says so so after the stock make provision now the c f p be consumed provides non bank lenders the same way that the o c c supervises national banks p has it's limited to enforcing federal law nothing in dot frank gives the c f b the authority to enforce state law so if you say it doesn't matter if this is a state or federal it doesn't matter and i think not only doesn't matter it's a reason the congress certainly would have been hoping to achieve you know if we talk about the other this is mention the fact that you know one of the reasons that the judge gave is that it was odd that that congress wouldn't have amended the national bank act itself you know i think we don't we're not arguing that it that should be dispositive that there's only one way to go about it but i do think it is it's powerful evidence and it's powerful evidence because if you look at the history of the national bank act national banks of course are there creations of federal law they only have the powers the federal law grants to them and when congress grants a power to a national bank it includes the limitations directly on that power and there are many instances throughout the national bank act where the same provision that grants of power also conditions the exercise of that power on state law if you look at barnett banks discussion of this issue and this is where it gets in saying well normally we don't think that congress has intended a national bank to comply with state law unless it does so expressly the reason it says that is it can point to a number of places in the statue or congress has done that in the cases where the only cases where where we're not aware of any case in which a court has ever held that congress express limited national banks power to comply with state law sort of this indirectly all of the cases and by that they can talks about them these are mainly the make fadden act cases so we're talking about first national bank of logan utah in plant city those cases say the provision says that national banks may open branches to the exchanges to the same extent that a state bank could have done it and that's against that backdrop what congress said or what the supreme court said in barnett bank is that if congress wanted national banks to support for that and this actually also goes to your dear question about the contract because in delhi quest the provision that was an issue was a provision in a contract that said that required the bank to comply with the laws of your jurisdiction and it wasn't considered a lot of your jurisdiction if it was preempted so i think that would be you know i think it would be a closer call but applicable i think apple makes it makes it easy because i think for us a law that's preempted is by definition just to address a couple of points i know but i'll give you some more time but here's my question i came in wondering if sixty three ninety three dozen of applied to federally regulated banks whose it applied to in his  response is that congress is taking too non bank entities right i don't think there's any support for that i mean the concept that somehow dodd frank was not focused on large banks like national banks is absurd and that's we know the dodd frank was heavily focused on cleaning up what was happening at large banks just like bank of america that's a real stretch and they're basically trying to find support for that position but it's not there the other point i weren't sure really was it would apply to state very unusual purpose for congress to add that section the other point that i would make well why why because it doesn't it doesn't have an effect there's already a requirement to follow that law well that's ok so that's the argument in your brief yeah the the other point  make that's related is that bank of america concedes that section six hundred thirty nine d generally applies to it so this argument that somehow this section needed to be in the national bank act and not cuba makes no sense they can see that the other subsections of sixteen thirty nine t apply to it so obviously congress can make national banks do things in places other than the national bank act the last point that i wanted to make is that the dot think authorities that they cite both the case law interpretations obviously didn't have the benefit of congress's expression of intent in two thousand and ten and so they're overridden by what congress did in two thousand to in response to an earlier question surprise me though i asked about congress's expression or perhaps