Bank of America goes all-in for SCOTUS; DOJ joins the battle.

Bank of America has filed a merits brief with the US Supreme Court in a case dealing with the scope of national bank preemption, and oral arguments for the case are scheduled for February 27, 2024. The case concerns a New York state law that requires the payment of interest on mortgage escrow accounts, and the question before the Supreme Court is whether this law is preempted by the National Bank Act (NBA). The Second Circuit has held that the New York law is preempted, as it “exert[ed] control over” a national bank’s power to provide escrow services in connection with home mortgage loans. The justices will now decide whether to affirm the Second Circuit’s decision. Bank of America argues in its brief that the New York law is preempted both under ordinary preemption principles and under Dodd-Frank, and that the Second Circuit’s decision was correct. The Department of Justice (DOJ) has filed a motion to participate in the oral arguments as an amicus curiae. The DOJ argues in its brief that the Second Circuit’s interpretation of the preemption standard is incorrect and is inconsistent with the Supreme Court’s previous decisions.