Cantero v. Bank of America, N. A.

Summary

The Second Circuit failed to analyze whether New York’s interest-on-escrow law is preempted as applied to national banks in a manner consistent with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Barnett Bank of Marion Cty., N. A. v. Nelson, 517 U. S. 25.

Text

PRELIMINARY PRINT 
Volume 602 U. S. Part 1 
Pages 205–221 
OFFICIAL REPORTS 
OF 
THE SUPREME COURT 
May 30, 2024 
REBECCA A. WOMELDORF 
reporter of decisions 
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NOTICE: This preliminary print is subject to formal revision before 
the bound volume is published. Users are requested to notify the Reporter 
of Decisions, Supreme Court of the United States, Washington, D.C. 20543, 
[email protected], of any typographical or other formal errors.

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OCTOBER TERM, 2023 205 
Syllabus 
CANTERO et al., individually and on behalf of 
all others similarly situated v. BANK OF 
AMERICA, N. A. 
certiorari to the united states court of appeals for 
the second circuit 
No. 22–529. Argued February 27, 2024—Decided May 30, 2024 
The United States maintains a dual system of banking. Banks with fed-
eral charters—called national banks—are subject primarily to federal 
oversight and regulation. Banks with state charters are subject to ad-
ditional state oversight and regulation. As relevant here, the National 
Bank Act expressly grants national banks the power to administer home 
mortgage loans. 12 U. S. C. § 371(a). When national banks make home 
mortgage loans, they often offer escrow accounts designed to protect 
both the bank and the borrower. Escrow accounts ensure the availabil-
ity of funds to pay the insurance premium and property taxes on the 
borrower's behalf. Escrow accounts operated by national banks are ex-
tensively regulated by the Real Estate Settlement Procedures Act of 
1974. RESPA was designed to protect borrowers from “certain abu-
sive practices” that were being carried on by national banks. § 2601(a). 
But RESPA does not mandate that national banks pay interest to 
borrowers on the balances of their escrow accounts. New York state 
law is different. It provides that a bank “shall” pay borrowers “inter-
est” on the balance held in an escrow account maintained in connection 
with a mortgage on certain real estate. N. Y . Gen. Oblig. Law Ann. 
§ 5–601. 
In this case, petitioner Alex Cantero and petitioners Saul Hymes and 
Ilana Harwayne-Gidansky obtained home mortgage loans from Bank of 
America, a national bank chartered under the National Bank Act. Both 
contracts required the borrowers to make monthly deposits into escrow 
accounts. Bank of America did not pay interest on the balances held in 
either escrow account, but informed the borrowers that the New York 
interest-on-escrow law was preempted by the National Bank Act. The 
borrowers brought putative class-action suits in Federal District Court. 
The District Court concluded that nothing in the National Bank Act or 
other federal law preempted the New York law. The Second Circuit 
reversed, holding that because the New York law “would exert control 
over” national banks' power “to create and fund escrow accounts,” the 
law was preempted.

206 CANTERO v. BANK OF AMERICA, N. A. 
Syllabus 
Held: The Second Circuit failed to analyze whether New York's interest-
on-escrow law is preempted as applied to national banks in a manner 
consistent with Dodd-Frank and Barnett Bank. Pp. 213–221. 
(a) Congress has instructed courts how to analyze federal preemption 
of state laws regulating national banks in the Dodd-Frank Wall Street 
Reform and Consumer Protection Act of 2010. Dodd-Frank ruled out 
field preemption. Instead, Dodd-Frank provides that the National 
Bank Act preempts a state law “only if” the state law (i) discriminates 
against national banks as compared to state banks; or (ii) “prevents or 
signifcantly interferes with the exercise by the national bank of its pow-
ers,” as determined “in accordance with the legal standard for preemp-
tion” in the Court's decision in Barnett Bank of Marion Cty., N. A. v. 
Nelson, 517 U. S. 25. §§ 25b(b)(1)(A), (B). Because the New York law 
does not discriminate against national banks, the preemption question 
must be analyzed under Dodd-Frank's “prevents or signifcantly in-
terferes” preemption standard “in accordance with” Barnett Bank. 
Pp. 213–219. 
(1) In Barnett Bank, a dispute arose because a national bank 
wanted to sell insurance in a Florida small town, but the State prohib-
ited most banks from selling insurance. The Court held the Florida law 
preempted because it signifcantly interfered with the national bank's 
ability to sell insurance—a federally authorized power. Importantly, 
Barnett Bank made clear that a non-discriminatory state banking law 
can be preempted even if it is possible for the national bank to comply 
with both federal and state law. 517 U. S., at 31. The Court reasoned 
that “normally Congress would not want States to forbid, or to impair 
signifcantly, the exercise of a power that Congress explicitly granted.” 
Id., at 33. But the Court added that its ruling did not “deprive States 
of the power to regulate national banks, where (unlike here) doing so 
does not prevent or signifcantly interfere with the national bank's exer-
cise of its powers.” Ibid. Pp. 214–215. 
(2) Barnett Bank did not purport to establish a clear line to demar-
cate when a state law “signifcantly interfere[s]” with a national bank's 
ability to exercise its powers. 517 U. S., at 33. Instead, the Court ana-
lyzed its precedents on that issue, looking to prior cases where the state 
law was preempted and where the state law was not preempted. Given 
Dodd-Frank's direction to identify signifcant interference “in accord-
ance with” Barnett Bank, courts addressing preemption questions in 
this context must do the same and likewise take account of those prior 
decisions. § 25b(b)(1)(B). The paradigmatic example of signifcant in-
terference identifed by Barnett Bank occurred in Franklin National 
Bank of Franklin Square v. New York, 347 U. S. 373, where a New York 
law prohibiting most banks “from using the word `saving' or `savings' 
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Cite as: 602 U. S. 205 (2024) 207 
Syllabus 
in their advertising or business” was held preempted because it inter-
fered with the national bank's statutory power “to receive savings de-
posits.” Id., at 374, 378–379. The Court in Franklin found the New 
York law preempted—even though it did not bar national banks from 
receiving (or even advertising) savings deposits—because the New York 
law interfered with the banks' ability to advertise “using the commonly 
understood description which Congress has specifcally selected.” Id., 
at 378. Barnett Bank also pointed to a second example of signifcant 
interference—Fidelity Federal Savings & Loan Association v. De la 
Cuesta, 458 U. S. 141—where the state law similarly limited a federally 
authorized power. For purposes of applying Dodd-Frank's preemption 
standard, Franklin, Fidelity, and Barnett Bank together illustrate the 
kinds of state laws that signifcantly interfere with the exercise of a 
national bank power and thus are preempted. Pp. 215–217. 
(3) The primary example of a case identifed in Barnett Bank where 
state law was not preempted is Anderson National Bank v. Luckett, 
321 U. S. 233. There, a Kentucky law required banks to turn over aban-
doned deposits to the State. The Anderson Court held that the Ken-
tucky law did not interfere with national banks' federal power to collect 
deposits because that power includes the inseparable “obligation to pay” 
deposits to those “entitled to demand payment.” Id., at 248–249. An-
derson distinguished a similar California law at issue in First National 
Bank of San Jose v. California, 262 U. S. 366, where the Court had 
found the state law to be preempted, and its reasons for differentiating 
the California law help demonstrate when a state law regulating na-
tional banks crosses the line from permissible to preempted. In con-
trast to the Kentucky law in Anderson, the California law in First Na-
tional Bank of San Jose allowed the State to claim dormant deposits 
without proof of abandonment. The Court noted that California's law 
could therefore cause customers to “hesitate” before depositing funds at 
the bank—and thus interfere with the “effciency” of the national bank 
in receiving deposits. 262 U. S., at 369–370. Barnett Bank also cited 
two other examples of state laws that were not preempted, both of 
which regulated banks in “their daily course of business.” See Na-
tional Bank v. Commonwealth, 9 Wall. 353; McClellan v. Chipman, 164 
U. S. 347. Pp. 217–219. 
(b) The Court's precedents applying Barnett Bank furnish content 
to the signifcant-interference test—and therefore also to Dodd-Frank's 
preemption standard incorporating Barnett Bank. A court applying 
that standard must make a practical assessment of the nature and de-
gree of the interference caused by a state law. If the state law's inter-
ference with national bank powers is more akin to the interference in 
cases like Franklin, Fidelity, First National Bank of San Jose , and 
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208 CANTERO v. BANK OF AMERICA, N. A. 
Syllabus 
Barnett Bank, then the state law is preempted. But if the state law's 
interference with national bank powers is more akin to the interference 
in cases like Anderson, National Bank, and McClellan, then the state 
law is not preempted. In this case, the Second Circuit did not conduct 
the kind of nuanced comparative analysis required by Barnett Bank, 
but instead distilled a categorical test that would preempt virtually all 
state laws that regulate national banks. Congress expressly incorpo-
rated Barnett Bank into Dodd-Frank, and Barnett Bank did not draw 
a bright preemption line. The Court of Appeals must conduct a preemp-
tion analysis in a manner consistent with that standard. Pp. 219–221. 
49 F. 4th 121, vacated and remanded. 
Kavanaugh, J., delivered the opinion for a unanimous Court. 
Jonathan E. Taylor argued the cause for petitioners. 
With him on the briefs were Deepak Gupta, Gregory A. 
Beck, Hassan Zavareei, Anna C. Haac, Jonathan M. Streis-
feld, Mark C. Rifkin, and Matthew M. Guiney. 
Deputy Solicitor General Stewart argued the cause for the 
United States as amicus curiae supporting vacatur. With 
him on the brief were Solicitor General Prelogar, Principal 
Deputy Assistant Attorney General Boynton, Charles L. 
McCloud, Gerard Sinzdak, and Urja Mittal. 
Lisa S. Blatt argued the cause for respondent. With her 
on the brief were Enu Mainigi, Sarah M. Harris, Aaron Z. 
Roper, Mark W. Mosier, and Kendall T. Burchard.* 
*Briefs of amici curiae urging reversal were fled for the State of New 
York et al. by Letitia James, Attorney General of New York, Barbara D. 
Underwood, Solicitor General, Andrea Oser, Deputy Solicitor General, and 
Sarah L. Rosenbluth, Assistant Solicitor General, by Brenna Bird, Attor-
ney General of Iowa, and Eric H. Wessan, Solicitor General, and by the 
Attorneys General for their respective jurisdictions as follows: Treg Tay-
lor of Alaska, Kris Mayes of Arizona, Rob Bonta of California, Philip J. 
Weiser of Colorado, William Tong of Connecticut, Kathleen Jennings of 
Delaware, Brian L. Schwalb of the District of Columbia, Christopher M. 
Carr of Georgia, Anne E. Lopez of Hawaii, Kwame Raoul of Illinois, Theo-
dore E. Rokita of Indiana, Kris Kobach of Kansas, Aaron M. Frey of 
Maine, Anthony G. Brown of Maryland, Andrea Joy Campbell of Massa-
chusetts, Dana Nessel of Michigan, Keith Ellison of Minnesota, Austin 
Knudsen of Montana, Michael T. Hilgers of Nebraska, Aaron D. Ford of 
Nevada, Matthew J. Platkin of New Jersey, Joshua H. Stein of North 
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Cite as: 602 U. S. 205 (2024) 209 
Opinion of the Court 
Justice Kavanaugh delivered the opinion of the Court. 
Federal law extensively regulates national banks such as 
Bank of America and expressly preempts some (but not all) 
state laws that regulate national banks. This case concerns 
the standard for determining when state laws that regulate 
national banks are preempted. As relevant here, the 
Dodd-Frank Act of 2010 expressly incorporated the standard 
that this Court articulated in Barnett Bank of Marion 
County, N. A. v. Nelson, 517 U. S. 25 (1996). 12 U. S. C. 
§ 25b(b)(1)(B). That standard asks whether a state law “pre-
vents or signifcantly interferes with the exercise by the na-
tional bank of its powers.” Ibid. Because the Court of Ap-
peals in this case did not apply that standard in a manner 
consistent with Dodd-Frank and Barnett Bank, we vacate 
and remand. 
I 
A 
The United States maintains a dual system of banking, 
made up of parallel federal and state banking systems. 
Carolina, Gentner Drummond of Oklahoma, Ellen F. Rosenblum of Ore-
gon, Michelle A. Henry of Pennsylvania, Peter F. Neronha of Rhode Is-
land, Marty J. Jackley of South Dakota, Ken Paxton of Texas, Sean D. 
Reyes of Utah, Charity R. Clark of Vermont, Robert W. Ferguson of 
Washington, and Bridget Hill of Wyoming; for the Conference of State 
Bank Supervisors et al. by Stefan L. Jouret and Arthur E. Wilmarth, Jr.; 
for the Constitutional Accountability Center by Elizabeth B. Wydra and 
Brianne J. Gorod; for Flagstar Plaintiffs by Steve W. Berman, Thomas E. 
Loeser, Kevin K. Green, and Peter B. Fredman; and for Public Citizen 
et al. by Adina H. Rosenbaum and Allison M. Zieve. 
Briefs of amici curiae urging affrmance were fled for the Bank Policy 
Institute et al. by H. Rodgin Cohen, Matthew A. Schwartz, and Thomas 
Pinder; for the Chamber of Commerce of the United States of America by 
Shay Dvoretzky, Parker Rider-Longmaid, Jonathan D. Urick, and Tyler 
S. Badgley; for Flagstar Bank, N. A., by Jonathan Y . Ellis, Brian D. 
Schmalzbach, and Thomas M. Hefferon; for Former Comptrollers of the 
Currency et al. by William M. Jay; for the Washington Legal Foundation 
by John M. Masslon II and Cory L. Andrews; for Dori K. Bailey by Louis 
Orbach; and for Joseph R. Mason by Anton Metlitsky and Jenya Godina. 
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210 CANTERO v. BANK OF AMERICA, N. A. 
Opinion of the Court 
That dual system allows privately owned banks to choose 
whether to obtain a charter from the Federal Government 
or from a state government. 
Banks with federal charters, called national banks, are 
subject primarily to federal oversight and regulation. And 
banks with state charters, called state banks, are subject to 
additional state oversight and regulation. Those two bank-
ing systems co-exist and compete. 
The national banking system began in 1863 when Treasury 
Secretary (later Chief Justice) Salmon Chase proposed, Con-
gress passed, and President Lincoln signed the National 
Bank Act. 12 Stat. 665; 13 Stat. 99. When a bank obtains 
a federal charter under the National Bank Act, the national 
bank gains various enumerated and incidental powers. 12 
U. S. C. § 24. The National Bank Act expressly affords na-
tional banks the powers that they need to organize and 
operate—for example, the powers to “make contracts,” to 
“sue and be sued,” and to “elect or appoint” a “board of direc-
tors.” Ibid. The Act also provides national banks with 
banking-specifc powers. As relevant here, the Act ex-
pressly supplies national banks with the power to “make, 
arrange, purchase or sell loans or extensions of credit se-
cured by liens on interests in real estate”—in other words, 
to administer home mortgage loans. § 371(a). The Act also 
expressly authorizes national banks to exercise “all such inci-
dental powers as shall be necessary to carry on the business 
of banking.” § 24. 
When national banks make home mortgage loans, they 
often offer escrow accounts. Mortgage-escrow accounts are 
designed to protect both the bank and the borrower. When 
the borrower makes a mortgage payment, the borrower puts 
money into an escrow account operated by the bank; the 
bank then uses the funds in escrow to pay the borrower's 
insurance premium and property taxes on the borrower's be-
half. That arrangement helps the borrower by simplifying 
expenses and budgeting. Instead of having to pay large

Cite as: 602 U. S. 205 (2024) 211 
Opinion of the Court 
lump-sum insurance and tax payments once or twice a year, 
the borrower can instead make small payments throughout 
the year. And the arrangement also assists the bank by en-
suring that the borrower's insurance and tax bills are timely 
paid, thus protecting the loan collateral (the home) against 
tax foreclosure or uninsured damage. 
In light of those benefts to both sides, the vast majority of 
home mortgages come with escrow accounts. Indeed, many 
federal agencies and programs require them. The Federal 
Housing Administration and the Department of Agriculture's 
Rural Housing Service, for example, mandate escrow ac-
counts for mortgages that they administer or insure. 
In the 1970s, Congress found that some national banks 
were engaging in “certain abusive practices” and that “sig-
nifcant reforms” were necessary to protect borrowers. 12 
U. S. C. § 2601(a). To that end, Congress passed and Presi-
dent Ford signed the Real Estate Settlement Procedures Act 
of 1974, or RESPA. Among other things, RESPA exten-
sively regulates national banks' operation of escrow ac-
counts. RESPA frst sets out the general terms for national 
banks that operate escrow accounts. For example, RESPA 
requires national banks to “promptly retur[n] to the bor-
rower” any funds left over after the loan is paid, § 2605(g), 
and to provide borrowers with notifcations and account 
statements, §§ 2609(b), (c). RESPA also contains a specifc 
safeguard for borrowers: It caps the amount that national 
banks can require borrowers to deposit into escrow accounts. 
§ 2609(a). But as relevant to this case, RESPA (unlike New 
York law, as we will discuss) does not mandate that national 
banks pay interest to borrowers on the balances of their es-
crow accounts.
1 
1 Another federal law, the Truth in Lending Act, also addresses national 
banks' operation of mortgage-escrow accounts. The Truth in Lending Act 
requires national banks to operate escrow accounts for certain mortgages. 
82 Stat. 146, 15 U. S. C. § 1639d. For those mandatory escrow accounts, 
the national bank must “pay interest” to the borrower “in the manner as 
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212 CANTERO v. BANK OF AMERICA, N. A. 
Opinion of the Court 
B 
Bank of America is a national bank chartered under the 
National Bank Act. Bank of America offers mortgage loans 
to homeowners, among other services. 
In 2010, Alex Cantero obtained a home mortgage loan from 
Bank of America to purchase a house in Queens Village, New 
York. In 2016, Saul Hymes and Ilana Harwayne-Gidansky 
similarly obtained a home mortgage loan from Bank of 
America to buy a house in East Setauket, New York. Both 
mortgage contracts required the borrowers to make monthly 
deposits into escrow accounts, which Bank of America used 
to pay the borrowers' property taxes and insurance premi-
ums when those taxes and premiums came due. 
Under New York law, when a bank “maintains an escrow 
account pursuant to any agreement executed in connection 
with a mortgage” on certain real estate, the bank “shall” pay 
borrowers “interest at a rate of not less than two per centum 
per year” on the balance. N. Y . Gen. Oblig. Law Ann. § 5– 
601 (West 2022). But Bank of America did not pay interest 
on the money in Cantero's escrow account or Hymes and 
Harwayne-Gidansky's escrow account. Bank of America no-
tifed the borrowers that the New York law was preempted 
by the National Bank Act. Both plaintiffs brought putative 
class-action suits against Bank of America in the U. S. Dis-
trict Court for the Eastern District of New York, alleging 
that Bank of America violated New York law by failing to 
pay them interest on the balances in their escrow accounts. 
The District Court decided the two cases together. The 
court agreed with the plaintiffs that New York law required 
Bank of America to pay interest on the escrow account bal-
ances. The court ruled that the New York interest-on-
escrow law applied to national banks such as Bank of 
America, concluding that nothing in the National Bank Act 
prescribed by [an] applicable State or Federal law.” § 1639d(g)(3). All 
parties agree that § 1639d does not apply to the mortgages in this case. 
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Opinion of the Court 
or other federal law preempted the New York law. Hymes 
v. Bank of America, N. A., 408 F. Supp. 3d 171, 198 (EDNY 
2019). 
The U. S. Court of Appeals for the Second Circuit re-
versed, holding that the New York interest-on-escrow law 
was preempted as applied to national banks. Relying pri-
marily on “an unbroken line of case law since McCulloch [v. 
Maryland, 4 Wheat. 316 (1819)],” the Court of Appeals held 
that federal law preempts any state law that “purports to 
exercise control over a federally granted banking power,” 
regardless of “the magnitude of its effects.” 49 F. 4th 121, 
131 (2022). Because the New York interest-on-escrow law 
“would exert control over” national banks' power “to create 
and fund escrow accounts,” the court concluded that the law 
was preempted. Id., at 134. 
This Court granted certiorari. 601 U. S. ––– (2023). 
II 
Congress has instructed courts how to analyze federal pre-
emption of state laws regulating national banks. In the 
wake of the 2008 fnancial crisis, Congress passed and Presi-
dent Obama signed the Dodd-Frank Wall Street Reform and 
Consumer Protection Act of 2010. Pub. L. 111–203, 124 
Stat. 1376. Among other things, Dodd-Frank established 
the controlling legal standard for when a “State consumer 
fnancial law,” like New York's interest-on-escrow law, is pre-
empted with respect to national banks. 12 U. S. C. § 25b. 
To begin, Dodd-Frank ruled out field preemption. 
§ 25b(b)(4) (federal banking law “does not occupy the feld in 
any area of State law”). As a result, we know that not all 
state laws regulating national banks are preempted. 
Instead, Dodd-Frank provided, as relevant here, that the 
National Bank Act preempts a state law “only if” the state 
law (i) discriminates against national banks as compared to 
state banks; or (ii) “prevents or signifcantly interferes with 
the exercise by the national bank of its powers,” as deter-
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214 CANTERO v. BANK OF AMERICA, N. A. 
Opinion of the Court 
mined “in accordance with the legal standard for preemption 
in the decision of the Supreme Court of the United States 
in Barnett Bank of Marion County, N. A. v. Nelson, Flor-
ida Insurance Commissioner, et al., 517 U.S. 25 (1996).” 
§§ 25b(b)(1)(A), (B). 
New York's interest-on-escrow law does not discriminate 
against national banks. The question of whether New 
York's interest-on-escrow law is preempted therefore must 
be analyzed under Dodd-Frank's “prevents or signifcantly 
interferes” preemption standard. To guide judicial applica-
tion of that preemption standard, Dodd-Frank expressly 
incorporates this Court's decision in Barnett Bank. The 
preemption question here therefore must be decided “in 
accordance with” Barnett Bank, as Dodd-Frank directs. 
§ 25b(b)(1)(B).
2 
A 
In Barnett Bank, a Florida law prohibited most banks 
from selling insurance. Barnett Bank of Marion Cty., N. A. 
v. Nelson, 517 U. S. 25, 29 (1996). A dispute arose because 
federal law authorized national banks to sell insurance in 
small towns, and a national bank wanted to sell insurance in 
a small Florida town. Id., at 28–29. 
This Court held that the Florida law was preempted be-
cause the law signifcantly interfered with the national 
bank's ability to exercise a power—selling insurance— 
authorized by federal law. Id., at 33–35. Importantly, 
Barnett Bank made clear that a non-discriminatory state 
banking law can be preempted even if it is possible for the 
national bank to comply with both federal and state law— 
2 Cantero's mortgage agreement (unlike Hymes and Harwayne -
Gidansky's mortgage agreement) was signed after Dodd-Frank was 
enacted but before Dodd-Frank became effective. Because we conclude 
that Dodd-Frank adopted Barnett Bank, and because Barnett Bank was 
also the governing preemption standard before Dodd-Frank, the timing of 
Cantero's mortgage agreement does not affect the preemption analysis 
here. 
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Cite as: 602 U. S. 205 (2024) 215 
Opinion of the Court 
there, by declining to sell insurance. Id., at 31. The Court 
emphasized that federal law's “grants of both enumerated 
and incidental `powers' to national banks” are “grants of au-
thority not normally limited by, but rather ordinarily pre-
empting, contrary state law.” Id., at 32. Congress had af-
forded national banks a “broad, not a limited,” power to sell 
insurance—a power “without relevant qualifcation.” Ibid. 
The Court reasoned that “normally Congress would not want 
States to forbid, or to impair signifcantly, the exercise of a 
power that Congress explicitly granted.” Id., at 33. Be-
cause federal law “explicitly grant[ed] a national bank an au-
thorization, permission, or power” with “no indication that 
Congress intended to subject that power to local restriction,” 
the Court concluded that state law could not limit national 
banks' ability to sell insurance. Id., at 34–35 (internal quo-
tation marks omitted); see id., at 37. But the Court added 
that its ruling did not “deprive States of the power to regu-
late national banks, where (unlike here) doing so does not 
prevent or signifcantly interfere with the national bank's ex-
ercise of its powers.” Id., at 33. 
In short, Barnett Bank decided that the non -
discriminatory Florida law at issue there signifcantly inter-
fered with the bank's exercise of its powers, and thus was 
preempted. 
B 
But Barnett Bank did not purport to establish a clear line 
to demarcate when a state law “signifcantly interfere[s] with 
the national bank's exercise of its powers.” Ibid. Instead, 
the Court analyzed the Court's precedents on that issue. 
Specifcally, to determine whether the Florida law was pre-
empted, Barnett Bank looked to prior cases of this Court 
where the state law was preempted, as well as several cases 
where the state law was not preempted. Given Dodd-
Frank's direction to identify signifcant interference “in ac-
cordance with” Barnett Bank, courts addressing preemption 
questions in this context must do as Barnett Bank did and

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216 CANTERO v. BANK OF AMERICA, N. A. 
Opinion of the Court 
likewise take account of those prior decisions of this Court 
and similar precedents. § 25b(b)(1)(B). 
The paradigmatic example of signifcant interference iden-
tifed by Barnett Bank occurred in Franklin National Bank 
of Franklin Square v. New York, 347 U. S. 373 (1954). The 
New York law at issue in Franklin prohibited most banks 
“from using the word `saving' or `savings' in their advertis-
ing or business.” Id., at 374. The Franklin Court con-
cluded that the law was preempted because it interfered 
with the national bank's statutory power “to receive savings 
deposits.” Id., at 374, 378–379. Importantly, the New 
York law did not bar national banks from receiving savings 
deposits, “or even” from “advertising that fact.” Id., at 378. 
Nonetheless, the Court determined that the New York law 
signifcantly interfered with the banks' power because the 
banks could not advertise effectively “using the commonly 
understood description which Congress has specifcally se-
lected” to describe their activities: receiving savings depos-
its. Ibid. Federal law gave national banks the power not 
only “to engage in a business,” but also “to let the public 
know about it”—and state law could not interfere with the 
national bank's ability to do so effciently. Id., at 377–378. 
In Barnett Bank, the Court compared the Florida insur-
ance law at issue there to the New York savings-deposit law 
at issue in Franklin, and the Court concluded that the two 
state laws were “quite similar.” 517 U. S., at 33. Because 
the Florida law interfered with the national bank's power in 
a way similar to the New York law in Franklin, the Florida 
law was preempted. 
Barnett Bank also pointed to a second example of signif-
cant interference—Fidelity Federal Savings & Loan Associ-
ation v. De la Cuesta, 458 U. S. 141 (1982). In Fidelity, fed-
eral law allowed, but did “not compel, federal savings and 
loans to include due-on-sale clauses in their contracts.” Id., 
at 155. But California law “limited” that right to circum-
stances where the federal savings and loan association could

Cite as: 602 U. S. 205 (2024) 217 
Opinion of the Court 
make a showing that enforcing the due-on-sale clause was 
reasonably necessary. Id., at 154–155; see also id., at 149. 
The federal savings and loan association could readily comply 
with both the state and federal laws. Id., at 155. Still, the 
Court ruled that the California law was preempted because 
the savings and loan could not exercise a due-on-sale clause 
“solely at its option.” Ibid. (internal quotation marks 
omitted). The California law thus interfered with “the fex-
ibility given” to the savings and loan by federal law. Ibid. 
(internal quotation marks omitted). 
For purposes of applying Dodd-Frank's preemption stand-
ard, Franklin, Fidelity, and Barnett Bank together illus-
trate the kinds of state laws that significantly interfere 
with the exercise of a national bank power and thus are 
preempted. 
C 
Of course, not all state laws regulating national banks are 
preempted. As relevant here, Dodd-Frank preempts a state 
law “only if” it “prevents or signifcantly interferes with” 
national bank powers. § 25b(b)(1)(B). To determine the 
kinds of state-law interference that are not “signifcant” and 
that are therefore not preempted, Barnett Bank again 
scoured this Court's precedents. 
First, Barnett Bank cited Anderson National Bank v. 
Luckett, 321 U. S. 233 (1944), as the primary example of a 
case where state law was not preempted. There, Kentucky 
law required banks to turn over abandoned deposits to the 
State. Id., at 236. The Anderson Court stated that the 
Kentucky law did “not infringe or interfere with any author-
ized function of the bank.” Id., at 249. Even though 
national banks possess a federal power to collect deposits, 
“an inseparable incident” of that power is the “obligation to 
pay” the deposits “to the persons entitled to demand pay-
ment according to the law of the state where it does busi-
ness.” Id., at 248–249. And Kentucky law simply allowed 
the State to “demand payment of the accounts in the same 
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218 CANTERO v. BANK OF AMERICA, N. A. 
Opinion of the Court 
way and to the same extent that the depositors could” after 
the depositors abandoned the account. Id., at 249. There-
fore, the Anderson Court concluded, Kentucky law did not 
“infringe the national banking laws or impose an undue bur-
den on the performance of the banks' functions.” Id., at 248; 
see also id., at 249. 
Anderson distinguished a seemingly similar California law 
at issue in an earlier case, First National Bank of San Jose 
v. California, 262 U. S. 366 (1923), where the Court had 
found the state law to be preempted. 
In First National Bank of San Jose , the California law 
allowed the State to claim deposits that went “ `unclaimed 
for more than twenty years.' ” Ibid. Unlike Kentucky's law, 
however, California did not require proof that the account 
was abandoned. Rather, the California law “attempt[ed] to 
qualify in an unusual way agreements between national 
banks and their customers.” Id., at 370. Therefore, the 
Court noted, the California law could cause customers to 
“hesitate” before depositing funds at the bank—and thus in-
terfere with the “effciency” of the national bank in receiving 
deposits. Id., at 369–370. 
Anderson's reasons for differentiating the California law 
at issue in First National Bank of San Jose help demon-
strate when a state law regulating national banks crosses 
the line from permissible to preempted. In contrast to the 
California law in First National Bank of San Jose , the Ken-
tucky law in Anderson demanded proof that the accounts 
were abandoned—and thus its rule was “as old as the com-
mon law itself.” 321 U. S., at 251. So the Kentucky law 
could produce no such deterrent effect—and it could apply 
to national banks. Id., at 252. 
Barnett Bank also cited two other examples of state laws 
that could apply to national banks. In National Bank v. 
Commonwealth, 9 Wall. 353 (1870), the Court determined 
that a Kentucky tax law was not preempted. The Kentucky 
law at issue there taxed the shareholders of all banks (includ-
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Cite as: 602 U. S. 205 (2024) 219 
Opinion of the Court 
ing national banks) on their shares of bank stock. Id., at 
360. The Court explained that national banks are “ex-
empted from State legislation, so far as that legislation may 
interfere with, or impair their effciency in performing the 
functions” that federal law authorizes them to perform. Id., 
at 362. But national banks are not “wholly withdrawn from 
the operation of State legislation”; rather, they remain sub-
ject to state law governing “their daily course of business” 
such as generally applicable state contract, property, and 
debt-collection laws. Id., at 361–362. Because the Ken-
tucky tax “in no manner hinder[ed]” the national bank's 
banking operations, and produced “no greater interference 
with the functions of the bank than any other” law governing 
businesses, the law was not preempted. Id., at 362–363. 
For similar reasons, the Court in McClellan v. Chipman, 
164 U. S. 347 (1896), another example cited by Barnett Bank, 
concluded that a generally applicable Massachusetts contract 
law was not preempted as applied to national banks. 164 
U. S., at 357–358, 361. The Court noted that a generally ap-
plicable contract law like Massachusetts's could be said to act 
as “a restraint upon the power of a national bank within the 
State to make such contracts.” Id., at 358. But even so, 
such state laws could apply to national banks as long as the 
state laws did not “in any way impai[r] the effciency of na-
tional banks or frustrat[e] the purpose for which they were 
created.” Ibid. 
III 
In sum, Barnett Bank examined this Court's precedents 
to determine whether a state law regulating national banks 
falls on the permissible or preempted side of the signifcant-
interference line. Those precedents furnish content to Bar-
nett Bank 's signifcant-interference test—and therefore also 
to Dodd-Frank's preemption standard incorporating Bar-
nett Bank. 
A court applying that Barnett Bank standard must make 
a practical assessment of the nature and degree of the inter-

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220 CANTERO v. BANK OF AMERICA, N. A. 
Opinion of the Court 
ference caused by a state law. If the state law prevents or 
signifcantly interferes with the national bank's exercise of 
its powers, the law is preempted. If the state law does not 
prevent or signifcantly interfere with the national bank's ex-
ercise of its powers, the law is not preempted. In assessing 
the signifcance of a state law's interference, courts may con-
sider the interference caused by the state laws in Barnett 
Bank, Franklin, Anderson, and the other precedents on 
which Barnett Bank relied. If the state law's interference 
with national bank powers is more akin to the interference 
in cases like Franklin, Fidelity, First National Bank of San 
Jose, and Barnett Bank itself, then the state law is pre-
empted. If the state law's interference with national bank 
powers is more akin to the interference in cases like Ander-
son, National Bank v. Commonwealth, and McClellan, then 
the state law is not preempted.
3 
In analyzing the New York interest-on-escrow law at issue 
here, the Court of Appeals did not conduct that kind of nu-
anced comparative analysis. Instead, the Court of Appeals 
relied on a line of cases going back to McCulloch v. Mary-
land to distill a categorical test that would preempt virtually 
3 In Barnett Bank and each of the earlier precedents, the Court reached 
its conclusions about the nature and degree of the state laws' alleged inter-
ference with the national banks' exercise of their powers based on the text 
and structure of the laws, comparison to other precedents, and common 
sense. See, e.g., Barnett Bank of Marion Cty., N. A. v. Nelson, 517 U. S. 
25, 33–35 (1996) (comparing Florida law at issue to New York law in 
Franklin); Franklin National Bank of Franklin Square v. New York, 347 
U. S. 373, 378 (1954) (concluding that New York law interfered with ability 
to use “a particular label” that federal law “specifcally selected”); First 
National Bank of San Jose v. California, 262 U. S. 366, 370 (1923) (reason-
ing that customers “might well hesitate” to subject their deposits to “un-
usual” California law); Anderson National Bank v. Luckett, 321 U. S. 233, 
247–248 (1944) (determining that no “word in the national banking laws . . . 
expressly or by implication conficts with the provisions of the Kentucky 
statutes”); id., at 249–252 (comparing the likely effect of the Kentucky 
law to the likely effect of the California law in First National Bank of 
San Jose).

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Cite as: 602 U. S. 205 (2024) 221 
Opinion of the Court 
all state laws that regulate national banks, at least other 
than generally applicable state laws such as contract or prop-
erty laws. Bank of America supports the Court of Appeals' 
approach. By contrast, the plaintiffs would yank the pre-
emption standard to the opposite extreme, and would pre-
empt virtually no non-discriminatory state laws that apply 
to both state and national banks. 
We appreciate the desire by both parties for a clearer pre-
emption line one way or the other. But Congress expressly 
incorporated Barnett Bank into the U. S. Code. And in de-
termining whether the Florida law at issue there was pre-
empted, Barnett Bank did not draw a bright line. Instead, 
Barnett Bank sought to carefully account for and navigate 
this Court's prior bank preemption cases. Applying those 
precedents, Barnett Bank ruled that some (but not all) non-
discriminatory state laws that regulate national banks are 
preempted. Under Dodd-Frank, as relevant here, courts 
may fnd a state law preempted “only if,” “in accordance with 
the legal standard” from Barnett Bank, the law “prevents or 
signifcantly interferes with the exercise by the national 
bank of its powers.” § 25b(b)(1)(B). 
Because the Court of Appeals did not analyze preemption 
in a manner consistent with Dodd-Frank and Barnett Bank, 
we vacate the judgment of the Court of Appeals and re-
mand the case for further proceedings consistent with this 
opinion.
4 
It is so ordered. 
4 During the course of the litigation, the parties have raised two other 
issues that the Court of Appeals did not address and that it may address 
as appropriate on remand: frst, the signifcance here (if any) of the pre-
emption rules of the Offce of the Comptroller of the Currency; and second, 
the relevance here (if any) of the Dodd-Frank provision that preempts 
state consumer fnancial laws if a federal law “other than title 62 of the 
Revised Statutes” preempts the state law, 12 U. S. C. § 25b(b)(1)(C).

Page Proof Pending Publication
Reporter’s Note 
The attached opinion has been revised to refect the usual publication 
and citation style of the United States Reports. The revised pagination 
makes available the offcial United States Reports citation in advance of 
publication. The syllabus has been prepared by the Reporter of Decisions 
for the convenience of the reader and constitutes no part of the opinion of 
the Court. A list of counsel who argued or fled briefs in this case, and 
who were members of the bar of this Court at the time this case was 
argued, has been inserted following the syllabus. Other revisions may 
include adjustments to formatting, captions, citation form, and any errant 
punctuation. The following additional edits were made: 
None

Retrieval chunks

• #1

  PRELIMINARY PRINT Volume 602 U. S. Part 1 Pages 205–221 OFFICIAL REPORTS OF THE SUPREME COURT May 30, 2024 REBECCA A. WOMELDORF reporter of decisions Page Proof Pending Publication NOTICE: This preliminary print is subject to formal revision before the bound volume is published. Users are requested to notif…

• #2

  interest-on-escrow law was preempted by the National Bank Act. The borrowers brought putative class-action suits in Federal District Court. The District Court concluded that nothing in the National Bank Act or other federal law preempted the New York law. The Second Circuit reversed, holding that because the New Y…

• #3

  does not prevent or signifcantly interfere with the national bank's exer- cise of its powers.” Ibid. Pp. 214–215. (2) Barnett Bank did not purport to establish a clear line to demar- cate when a state law “signifcantly interfere[s]” with a national bank's ability to exercise its powers. 517 U. S., at 33. Instead, …

• #4

  deposits to those “entitled to demand payment.” Id., at 248–249. An- derson distinguished a similar California law at issue in First National Bank of San Jose v. California, 262 U. S. 366, where the Court had found the state law to be preempted, and its reasons for differentiating the California law help demonstra…

• #5

  Jonathan E. Taylor argued the cause for petitioners. With him on the briefs were Deepak Gupta, Gregory A. Beck, Hassan Zavareei, Anna C. Haac, Jonathan M. Streis- feld, Mark C. Rifkin, and Matthew M. Guiney. Deputy Solicitor General Stewart argued the cause for the United States as amicus curiae supporting vacatu…

• #6

  tional bank of its powers.” Ibid. Because the Court of Ap- peals in this case did not apply that standard in a manner consistent with Dodd-Frank and Barnett Bank, we vacate and remand. I A The United States maintains a dual system of banking, made up of parallel federal and state banking systems. Carolina, Gen…

• #7

  bank gains various enumerated and incidental powers. 12 U. S. C. § 24. The National Bank Act expressly affords na- tional banks the powers that they need to organize and operate—for example, the powers to “make contracts,” to “sue and be sued,” and to “elect or appoint” a “board of direc- tors.” Ibid. The Act als…

• #8

  counts. RESPA frst sets out the general terms for national banks that operate escrow accounts. For example, RESPA requires national banks to “promptly retur[n] to the bor- rower” any funds left over after the loan is paid, § 2605(g), and to provide borrowers with notifcations and account statements, §§ 2609(b), (…

• #9

  trict Court for the Eastern District of New York, alleging that Bank of America violated New York law by failing to pay them interest on the balances in their escrow accounts. The District Court decided the two cases together. The court agreed with the plaintiffs that New York law required Bank of America to pay …

• #10

  law (i) discriminates against national banks as compared to state banks; or (ii) “prevents or signifcantly interferes with the exercise by the national bank of its powers,” as deter- Page Proof Pending Publication 214 CANTERO v. BANK OF AMERICA, N. A. Opinion of the Court mined “in accordance with the legal stan…

• #11

  and incidental `powers' to national banks” are “grants of au- thority not normally limited by, but rather ordinarily pre- empting, contrary state law.” Id., at 32. Congress had af- forded national banks a “broad, not a limited,” power to sell insurance—a power “without relevant qualifcation.” Ibid. The Court reas…

• #12

  cluded that the law was preempted because it interfered with the national bank's statutory power “to receive savings deposits.” Id., at 374, 378–379. Importantly, the New York law did not bar national banks from receiving savings deposits, “or even” from “advertising that fact.” Id., at 378. Nonetheless, the Cour…

• #13

  with the exercise of a national bank power and thus are preempted. C Of course, not all state laws regulating national banks are preempted. As relevant here, Dodd-Frank preempts a state law “only if” it “prevents or signifcantly interferes with” national bank powers. § 25b(b)(1)(B). To determine the kinds of st…

• #14

  Anderson's reasons for differentiating the California law at issue in First National Bank of San Jose help demon- strate when a state law regulating national banks crosses the line from permissible to preempted. In contrast to the California law in First National Bank of San Jose , the Ken- tucky law in Anderson …

• #15

  III In sum, Barnett Bank examined this Court's precedents to determine whether a state law regulating national banks falls on the permissible or preempted side of the signifcant- interference line. Those precedents furnish content to Bar- nett Bank 's signifcant-interference test—and therefore also to Dodd-Frank…

• #16

  to use “a particular label” that federal law “specifcally selected”); First National Bank of San Jose v. California, 262 U. S. 366, 370 (1923) (reason- ing that customers “might well hesitate” to subject their deposits to “un- usual” California law); Anderson National Bank v. Luckett, 321 U. S. 233, 247–248 (1944)…

• #17

  the relevance here (if any) of the Dodd-Frank provision that preempts state consumer fnancial laws if a federal law “other than title 62 of the Revised Statutes” preempts the state law, 12 U. S. C. § 25b(b)(1)(C). Page Proof Pending Publication Reporter’s Note The attached opinion has been revised to refect the u…