In 2024, the Supreme Court decided Cantero v. Bank of America, unanimously vacating the Second Circuit’s decision finding a New York law on interest on escrow accounts for home mortgage loans preempted by the National Bank Act. At the same time, the Court granted, vacated, and remanded Kivett v. Flagstar Bank, a decision from the Ninth Circuit that had held a similar California law was not preempted under prior circuit precedent.
On remand, the Ninth Circuit issued a memorandum opinion holding that Cantero suggested that the prior circuit precedent was correct, and that it did not overrule that prior circuit precedent. Yesterday, the Court issued a published decision in a response to a petition for panel hearing, holding again that Cantero did not effectively overrule the Ninth Circuit’s precedent. Dissenting, Judge Nelson would have held otherwise, and that under the Cantero standard, the interest-on-escrow law was preempted.
