Opinion ID: 4567688
Heading Depth: 1
Heading Rank: 1

Heading: introduction

Text: From the 1930s, federal savings associations and national banks were separately regulated. With their different regulation, federal savings association institutions received different and greater preemption from state laws. In contrast, national banks were separately regulated and national banks, like Chase, had less preemption from state regulations and laws. Under the Supremacy Clause, states could regulate national banks more than states could regulate federal savings association institutions. The 2011 Dodd-Frank Act changed this. Now, federal savings associations and national banks face the same state law preemption exceptions. California law requires banks pay consumers a nominal interest on bank customers’ escrow account balances. Before the 2011 Dodd-Frank Act, California did not require similar escrow interest payments by federal savings association institutions. This case asks us to exempt Chase from paying its California customers nominal interest on escrow balance monies that Chase can otherwise use—but asks for this exemption only on accounts that Chase bought from federal savings association institutions before January 21, 2013. MCSHANNOCK V. JP MORGAN CHASE BANK 27 Chase already pays this escrow interest on loans that Chase generated and pays this interest on loans generated by other national banks. After January 21, 2013, revised federal regulations require both national banks and federal savings association comply with state escrow interest rate requirements. Although Chase pays the escrow interest on loans that Chase or other banks generated, Chase says it should not be required to compensate customers whose loans originated with a federal savings association institution before 2013.