However, the Supreme Court determined that the Second Circuit failed to apply the preemption standard properly, emphasizing that it necessitates “a practical assessment of the nature and degree of the interference” caused by the state law in question. Justice Brett Kavanaugh, writing for the unanimous court, noted that the Second Circuit used a “categorical test that would preempt virtually all state laws regulating national banks,” contrary to the nuanced standard required by Dodd-Frank.
The court’s decision referenced the 1996 landmark ruling in Barnett Bank of Marion County NA v. Nelson, which established that some non-discriminatory state laws regulating national banks are preempted. The Supreme Court concluded that the Second Circuit’s analysis did not align with the standards set by Dodd-Frank and Barnett Bank, necessitating a remand for further proceedings consistent with the Supreme Court’s opinion.
The case is Cantero et al. v. Bank of America NA, case number 22-529, in the Supreme Court of the United States.
