{"id":2070431,"date":"2023-10-17T15:01:01","date_gmt":"2023-10-17T19:01:01","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/supreme-court-agrees-to-decide-if-federal-banking-laws-supersede-state-banking-laws\/"},"modified":"2023-10-17T15:09:40","modified_gmt":"2023-10-17T19:09:40","slug":"supreme-court-agrees-to-decide-if-federal-banking-laws-supersede-state-banking-laws","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/supreme-court-agrees-to-decide-if-federal-banking-laws-supersede-state-banking-laws\/","title":{"rendered":"Supreme Court to rule on federal vs. state banking laws."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">20<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fsupreme-court-agrees-to-decide-if-federal-banking-laws-supersede-state-banking-laws%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2070431&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><blockquote>\n<h2>The Supreme Court to Decide on New York \u2063State Law\u2063 Requiring \u2063Banks to \u200bPay Interest on Mortgage Escrow Accounts<\/h2>\n<p>The Supreme Court has agreed \u200cto consider whether a federal banking law preempts \u200da \u200dNew York state law that \u200dcompels banks to pay interest on mortgage escrow accounts.<\/p>\n<div class=\"my-5\">\n<p>The case comes at a time \u2062of turmoil in the mortgage markets. Mortgage\u200c loan \u200cborrowing costs <a href=\"https:\/\/www.theepochtimes.com\/real-estate\/mortgage-rates-soar-to-23-year-high-in-fresh-blow-to-homebuyer-affordability-5509148\" target=\"_blank\" rel=\"noopener\">soared<\/a> earlier this month to their highest point in \u200d23 years.<\/p>\n<\/div>\n<p>The average rate for 30-year mortgages \u200bhas risen to 7.57 \u200bpercent, which is\u200c more than double what it \u2064was two years \u2062ago. This is\u200b the highest level since Dec. 1,\u2062 2000, when the 30-year \u200bmortgage rate was at an average of 7.65 percent.\u200b At \u200bthe same time, applications for home loans have fallen\u200b to near <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/the-u-s-money-trail-with-iran-is-worse-than-you-think\/\" title=\"US-Iran Money Trail: Worse Than Expected\">multi-decade\u2062 lows<\/a>, according to the Mortgage Bankers \u2064Association.<\/p>\n<div class=\"shortcode\">\n<div class=\"border-comp-divider mb-4 mr-4 w-full max-w-[500px] border px-5 py-4 text-[16px] leading-[20px] text-[#262626] md:float-left\" id=\"in_article_related_stories\">\n<h2 class=\"mb-3 font-sans text-[16px] font-semibold uppercase leading-[19px] text-[#2F2F2F]\">Related Stories<\/h2>\n<div class=\"mb-4 flex gap-2\">\n<div class=\"grow\">\n<div class=\"mb-1 line-clamp-2\">\n<a href=\"http:\/\/www.theepochtimes.com\/article\/federal-agency-forces-bank-of-america-to-pay-100-million-to-customers-5388602?ea_src=author_manual&#038;ea_med=related_stories\"><\/p>\n<h3>Federal Agency Forces Bank\u200d of\u200c America to Pay $100 Million \u2063to Customers<\/h3>\n<p><\/a>\n<\/div>\n<div class=\"text-comp-caption text-[14px] leading-[18px]\">7\/11\/2023<\/div>\n<\/div>\n<div class=\"shrink-0 basis-[120px]\">\n<a href=\"http:\/\/www.theepochtimes.com\/article\/federal-agency-forces-bank-of-america-to-pay-100-million-to-customers-5388602?ea_src=author_manual&#038;ea_med=related_stories\"><\/a>\n<\/div>\n<\/div>\n<div class=\"mb-4 flex gap-2\">\n<div class=\"grow\">\n<div class=\"mb-1 line-clamp-2\">\n<a href=\"http:\/\/www.theepochtimes.com\/us\/house-gop-investigating-bank-of-america-for-voluntarily-giving-jan-6-bank-records-to-fbi-5292163?ea_src=author_manual&#038;ea_med=related_stories\"><\/p>\n<h3>House GOP Investigating Bank of America for &#8216;Voluntarily&#8217; \u200bGiving Jan. 6 Records to\u2063 FBI<\/h3>\n<p><\/a>\n<\/div>\n<div class=\"text-comp-caption text-[14px] leading-[18px]\">5\/25\/2023<\/div>\n<\/div>\n<div class=\"shrink-0 basis-[120px]\">\n<a href=\"http:\/\/www.theepochtimes.com\/us\/house-gop-investigating-bank-of-america-for-voluntarily-giving-jan-6-bank-records-to-fbi-5292163?ea_src=author_manual&#038;ea_med=related_stories\"><\/a>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p>The nation\u2019s\u2064 highest court granted the petition in\u2064 Cantero v. Bank of \u2064America (court file 22-529) on Oct. \u206413 \u200cin an \u200dunsigned order. No\u2063 justices dissented. The court provided \u2062no reasons \u200cfor its \u2064decision. At least four \u200cof the nine\u2064 justices had to vote\u2063 to grant\u200b the petition\u2064 for it to move forward.<\/p>\n<p>Bank of America is challenging New York state\u2019s escrow interest law. \u200cThe statute provides that banks \u200cmust pay \u2062at least 2 percent interest\u2064 on accounts that contain the extra \u2064money\u200b that borrowers pay for insurance and property taxes.<\/p>\n<p>Thirteen states have similar\u200d pro-borrower laws.<\/p>\n<div class=\"shortcode post-related-videos\">\n<div class=\"lazyload-wrapper\">\n<div class=\"lazyload-placeholder\"><\/div>\n<\/div>\n<\/div>\n<p>Bank\u2062 of\u200d America argues that such state laws are preempted by the National Bank Act.<\/p>\n<p>The National Bank Act establishes a system of \u200bfederally chartered national banks whose\u200b banking powers\u200d come exclusively from federal \u200claw and are extensively \u200dregulated\u2063 by \u200dfederal banking authorities, primarily the Office of the Comptroller of\u2063 the Currency (OCC), Bank \u2062of America said in a \u2064brief filed \u200cwith the Supreme Court on Feb.\u200c 16.<\/p>\n<div class=\"post-figure\">\n<figure style=\"width:600px\" class=\"alignnone\"><figcaption>The Supreme Court building in Washington, D.C. \u2062(Rudy Sulgan\/Getty Images)<\/figcaption><\/figure>\n<\/div>\n<p>Because national \u2064banks are created by the federal government, states \u200b\u201ccan exercise no control\u201d over\u2062 them, \u201cnor \u2062in any wise\u2064 affect their operation, except \u200bin so far as Congress may see \u2063proper to permit,\u201d the bank&#8217;s brief states, citing Supreme Court precedent.<\/p>\n<p>A national bank\u2019s federal banking powers are thus \u201cnot normally limited by, but\u2063 rather ordinarily preempt \u2026 contrary state law,\u201d the brief states, also\u2062 citing Supreme \u2062Court precedent.<\/p>\n<p>In the case at hand, the U.S. Court of Appeals for the 2nd Circuit ruled that the National Bank Act preempts a New \u2062York \u200dlaw requiring national banks to pay\u2064 interest on funds\u200d held\u2062 in \u200bmortgage escrow accounts.<\/p>\n<p>The\u2064 decision is at odds with a 2018 \u200bU.S. Court of Appeals for the 9th Circuit\u2063 decision in Lusnak v. Bank\u2063 of America \u2063N.A., which held that neither the National Bank Act nor OCC regulations preempt a similar California law.<\/p>\n<div class=\"my-5\">\n<p>A subsequent decision from that circuit court that applied the \u200dLusnak\u200c decision is now the subject \u2063of a petition that \u2063the justices\u200b are considering in\u200c Flagstar Bank N.A.\u2062 v. Kivett\u200c (court file \u206422-349).<\/p>\n<h2>Risking Market Instability?<\/h2>\n<p>The homeowners \u2063who brought suit against Bank \u200bof America say \u200dthat if federal law is allowed to preempt state escrow-interest laws here, the regime\u200c of laws \u200dgoverning consumer finance could be jeopardized, leading\u200d to market instability.<\/p>\n<\/div>\n<p>U.S. Solicitor General Elizabeth Prelogar\u200c filed a friend-of-the-court brief on Aug. \u206330 siding with \u200dBank of America.<\/p>\n<p>The \u200b13 states that have escrow-interest laws have\u200c had them \u201cin place for decades \u2026 and certain national banks already\u200d comply with such laws\u2064 nationwide,\u201d \u200bthe\u2062 brief states. \u201cThere is consequently no pressing need for this court\u200c to resolve the question presented now.\u201d<\/p>\n<p>The case was originally brought\u200c in federal court by three New York residents, including lead petitioner Alex Cantero, who bought homes\u200d using mortgages from Bank of America.<\/p>\n<p>Their mortgage contract, which \u2062required them to cover property taxes and insurance payments by\u2064 putting money in escrow accounts \u200dheld by the bank, stated \u2062that \u200dit was to\u2062 be governed by New York law.<\/p>\n<p>Despite this contractual provision, the bank refused to pay the 2 percent\u2063 interest required by state law, the homeowners\u2062 said in their petition filed with the Supreme Court \u200con Dec. 5, 2022.<\/p>\n<p>The homeowners urged \u200dthe Supreme Court to take up their case because \u201cthe question presented is indisputably important,\u201d so much so \u200dthat\u2062 \u201cthe banking industry\u2019s \u2063chief\u200b regulator recently described\u200c the question as of \u2018foundational consequence to \u200dthe &#8230; federal \u200dbanking system.\u2019\u201d<\/p>\n<div class=\"my-5\">\n<p>They noted that a separate brief filed by the U.S. Chamber of Commerce in the \u200bFlagstar Bank case called the issue \u201ccritical to the U.S. financial system.\u201d<\/p>\n<h2>2008 Financial Crisis Cited<\/h2>\n<p>The homeowners continued, saying that the\u200c 2nd \u200cCircuit\u2019s decision \u201cto\u2062 <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/supreme-court-agrees-to-decide-if-federal-banking-laws-supersede-state-banking-laws\/\" title=\"Supreme Court to rule on federal vs. state banking laws.\">preempt escrow-interest laws leaves banks uncertain<\/a> of\u2062 the interest rates they must pay, undermining the stability \u2062on which our financial system\u2064 depends.\u201d<\/p>\n<\/div>\n<p>Moreover, the 2nd Circuit\u2019s \u2062reasoning could lead to the preemption of any state law \u201cthat \u2064seeks to exert control over a banking power\u2014no matter how insignificant its impact on banks.\u201d<\/p>\n<p>It could\u200b also \u201callow\u200b banks\u2063 to ignore state \u200dconsumer-financial \u2063regulations with impunity, effectively reinstating the preemption regime that Congress concluded \u2018planted the seeds\u2019 for the 2008 financial crisis.\u201d<\/p>\n<p>Mr. Cantero\u2019s attorney, Jonathan \u200dTaylor of Gupta Wessler in\u200c Washington, told\u200c The Epoch Times: \u201cWe\u2019re pleased that\u200c the Supreme Court agreed to hear our \u200bcase.\u201d<\/p>\n<p>\u201cWe\u2019re looking forward to explaining to the court why state consumer-protection laws aren\u2019t trumped by federal law in this case,\u201d he said by \u2063email.<\/p>\n<p>The \u2064Epoch Times reached out for comment to\u200d the\u200c U.S. Department of Justice and the bank\u2019s attorney,\u2062 Mark W. Mosier of Covington and Burling in Washington, but had\u2062 not received a reply \u200dfrom either\u2064 of them as of press time.<\/p>\n<p>Oral \u2064arguments in Cantero v.\u200c Bank of America have not yet been scheduled.<\/p>\n<div class=\"my-5\">\n<em>Tom Ozimek contributed\u200c to this article.<\/em>\n<\/div>\n<\/blockquote>\n<p> <\/p>\n<h2> How will the court&#8217;s decision in Cantero v. Bank of America affect the rights and financial \u200dwell-being of homeowners?<\/h2>\n<p><span>  Ing a New York state law that\u2063 requires banks to pay interest on mortgage escrow accounts. The case, Cantero v. Bank of America, will be\u200d heard \u2063by the Supreme Court, which will determine whether the federal banking law preempts\u200b this state law.<\/p>\n<p>The timing \u2063of this case is \u200dsignificant, \u2063as the \u200cmortgage markets are undergoing\u200c turmoil. Mortgage loan borrowing costs have soared to\u200b their highest\u2064 point in 23 years, \u200dwith the average rate \u200bfor 30-year mortgages rising to 7.57 percent. This is more than double what \u2062it was two years ago and\u2063 the highest level\u2064 since Dec. 1, 2000. At the \u200dsame time, applications for home loans have fallen\u2063 to near <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/the-dollar-is-almost-at-parity-with-the-euro\/\" title=\"The Dollar Is Almost at Parity With the Euro\">multi-decade lows<\/a>.<\/p>\n<p>The <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/supreme-court-pauses-restrictions-on-biden-admin-contacting-social-media-companies\/\" title=\"Supreme Court halts limits on Biden Admin's communication with social media firms.\">case raises important questions<\/a> about the rights and responsibilities of banks in relation to mortgage escrow accounts. Escrow accounts are used\u2064 to\u2062 hold\u200b funds for\u200d property \u200ctaxes and insurance premiums,\u2064 ensuring that these\u2062 payments are\u200c made when due. Under the New York state law, banks are required to pay interest on these accounts, providing additional income for homeowners. However, Bank of America argues that this requirement conflicts with the federal banking law, which does\u2063 not \u2063mandate interest payments on escrow accounts.<\/p>\n<p>The Supreme Court&#8217;s decision in\u200c this \u200bcase will have significant implications for both banks\u2064 and homeowners. If\u200d the court upholds the New York state law, it could set a precedent for other states to implement similar requirements. This would potentially increase costs for \u2062banks, as\u200d they would need to\u2062 pay \u200dinterest\u200c on\u2062 a larger \u200bnumber of \u200bescrow accounts. On the other hand, homeowners could benefit from this \u2062additional income, particularly in\u200c a time of rising mortgage\u200b costs.<\/p>\n<p>The court&#8217;s decision will also clarify the relationship between \u2064federal and state laws in the banking sector. It will determine whether\u200d state laws can impose additional obligations on \u2062banks, even if they conflict with federal laws. This \u2063has broader implications for the division of powers between\u200b the federal government and individual states in regulating the banking industry.<\/p>\n<p>The Supreme \u200dCourt&#8217;s grant of the petition in \u200bCantero v. Bank\u2062 of America indicates\u200b that the case is of \u2064significant interest \u2062and importance. The fact that no \u200bjustices dissented suggests that there is\u2062 a \u2063consensus among the court \u2064that this issue warrants consideration. However, \u200cthe court has not provided any reasons for its decision, leaving\u200b room for speculation\u200c about the justices&#8217; motivations and <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/former-trump-aide-reacts-minutes-after-hunter-biden-sued-him-over-laptop-they-keep-underestimating-us\/\" title=\"Trump aide responds to Hunter Biden's lawsuit over laptop: 'They underestimate us'.\">potential legal arguments<\/a>.<\/p>\n<p>Overall, the Supreme\u2063 Court&#8217;s decision on the New York state law requiring\u200d banks to\u200c pay interest\u2063 on mortgage\u2062 escrow \u2062accounts will have \u200cfar-reaching consequences. It will \u200dimpact the mortgage and banking industries, as well as the\u200d rights and financial well-being of homeowners. \u2064The outcome \u2063of this case will provide clarity on the relationship between \u200bfederal and\u200d state laws in the banking sector and will shape future regulations and\u200c practices in this area.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Supreme Court will review if a federal banking law overrides a New York state law requiring banks to pay interest on mortgage escrow accounts. This case arises amidst mortgage market instability, with borrowing costs reaching a 23-year peak recently. The average&#8230;<\/p>\n","protected":false},"author":168,"featured_media":2070432,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2070431","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2070431","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/168"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2070431"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2070431\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2070432"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2070431"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2070431"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2070431"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}