Click Fraud Protection Tycko & Zavareei LLP Secures Landmark Victory in U.S. Supreme Court Upholding Consumer Rights Against National Banks - Tycko & Zavareei LLP
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Tycko & Zavareei LLP Secures Landmark Victory in U.S. Supreme Court Upholding Consumer Rights Against National Banks

Date Published
May 31, 2024

May 30, 2024. Tycko & Zavareei LLP is proud to announce a significant legal development in the U.S. Supreme Court on behalf of consumers in the case Cantero et al. v. Bank of America, N.A. This opinion, delivered by Justice Kavanaugh, reinforces the applicability of state consumer protection laws against national banks, ensuring that consumers’ rights are upheld across the nation.

In the opinion, the Supreme Court overturned a Second Circuit Court of Appeals decision that would have allowed national banks like Bank of America to avoid complying with virtually all state consumer protection laws based on the legal doctrine of preemption. Specifically at issue in the case is a New York state law requiring interest to be paid on mortgage escrow account balances, which Bank of America refused to follow. Numerous other states have enacted similar escrow interest laws, with 32 other states and the District of Columbia filing amicus briefs supporting the plaintiff consumers’ position. The United States Solicitor General also joined these states and the plaintiff consumers in arguing the Second Circuit’s decision should be overturned.

Tycko & Zavareei Partner Anna C. Haac remarked, “This Supreme Court victory is a triumph not just for our clients but for all consumers across the United States. It underscores the importance of state consumer protection laws and ensures that national banks cannot arbitrarily sidestep these crucial regulations.”

The Supreme Court’s decision makes clear that under the Dodd-Frank Wall Street Reform and Consumer Protection Act, these and other state consumer protection laws are only preempted if they discriminate against national banks or significantly interfere with their federally authorized powers. This requires a practical assessment, grounded in precedents such as Barnett Bank, to determine whether the nature and degree of a state law’s impact reaches the threshold of significant interference.

The Supreme Court’s opinion represents a crucial affirmation of the balance between state and federal regulation in the banking sector, protecting consumers from blanket preemptions that could otherwise strip away vital state-enacted protections.

TZ Managing Partner Hassan Zavareei added, “We are thrilled with the Court’s decision, which will help to fortify the legal framework that protects consumers from potential overreach by large financial institutions and safeguard the interests of individuals.”

Tycko & Zavareei LLP remains committed to advocating for consumer rights and holding powerful entities accountable.

The case is Alex Cantero, et al. v. Bank of America, N.A., No. 22-529, in the Supreme Court of the United States.

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