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Page Number: 2.0

2 

CANTERO v. BANK OF AMERICA, N. A. 

Syllabus 

Bank Act.  The borrowers brought putative class-action suits in Fed-
eral District Court.  The District Court concluded that nothing in the
National Bank Act or other federal law preempted the New York law. 
The Second Circuit reversed, holding that because the New York law 
“would exert control over” national banks’ power “to create and fund
escrow accounts,” the law was preempted. 

Held: The Second Circuit failed to analyze whether New York’s interest-
on-escrow law is preempted as applied to national banks in a manner
consistent with Dodd-Frank and Barnett Bank.  Pp. 5–14.

(a) Congress  has 

instructed  courts  how  to  analyze 

federal 
preemption of state laws regulating national banks in the Dodd-Frank 
Wall  Street  Reform  and  Consumer  Protection  Act  of  2010.    Dodd-
Frank ruled out field preemption.  Instead, Dodd-Frank provides that 
the  National  Bank  Act  preempts  a  state  law  “only  if”  the  state  law 
(i) discriminates against national banks as compared to state banks; 
or  (ii)  “prevents  or  significantly  interferes  with  the  exercise  by  the 
national  bank  of  its  powers,”  as  determined  “in  accordance  with  the 
legal standard for preemption” in the Court’s decision in Barnett Bank 
of  Marion  Cty.,  N. A.  v.  Nelson,  517  U. S.  25.    §§25b(b)(1)(A),  (B). 
Because  the  New  York  law  does  not  discriminate  against  national
banks, the preemption question must be analyzed under Dodd-Frank’s 
“prevents  or  significantly 
interferes”  preemption  standard  “in 
accordance with” Barnett Bank.  Pp. 5–12.

(1) In  Barnett  Bank,  a  dispute  arose  because  a  national  bank 
wanted  to  sell  insurance  in  a  Florida  small  town,  but  the  State 
prohibited  most  banks  from  selling  insurance.    The  Court  held  the 
Florida  law  preempted  because  it  significantly  interfered  with  the 
national bank’s ability to sell insurance—a federally authorized power. 
Importantly, Barnett Bank made clear that a non-discriminatory state
banking  law  can  be  preempted  even  if  it  is  possible  for  the  national 
bank to comply with both federal and state law.  517 U. S., at 31.  The 
Court  reasoned  that  “normally  Congress  would  not  want  States  to 
forbid, or to impair significantly, the exercise of a power that Congress 
explicitly granted.”  Id., at 33.  But the Court added that its ruling did
not  “deprive  States  of  the  power  to  regulate  national  banks,  where 
(unlike here) doing so does not prevent or significantly interfere with 
the national bank’s exercise of its powers.”  Ibid.  Pp. 6–7.

(2) Barnett  Bank  did  not  purport  to  establish  a  clear  line  to 
demarcate when a state law “significantly interfere[s]” with a national
bank’s  ability  to  exercise  its  powers.    517  U. S.,  at  33.  Instead,  the 
Court  analyzed  its  precedents  on  that  issue,  looking  to  prior  cases 
where the state law was preempted and where the state law was not 
preempted.  Given  Dodd-Frank’s  direction  to  identify  significant
interference  “in  accordance  with”  Barnett  Bank,  courts  addressing