The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 limits the “preemptive” effect of federal law governing “national bank[s]” against “state consumer protection laws.” See 12 U.S.C. § 25b. Specifically, the Dodd-Frank Act disallows the application of state consumer financial laws to national banks:
“only if-. . . (B) in accordance with the legal standard for preemption in Barnett Bank of Marion County v. Nelson [a 1996 Supreme Court case, the remainder of the statute’s caselaw citation is omitted] the State consumer financial law prevents or significantly interferes with the exercise by the national bank of its powers.”
See 12 U.S.C. § 25b(b)(1). In Cantero v. Bank of America, decided on May 30, 2024, the Court ruled that any court charged with applying that statutory provision was required to analyze the multiple caselaw precedents cited by the Supreme Court in the Barnett Bank Case and apply the cited precedent that is the most analogous to the facts of the case actually before the court. The ruling of the Court, in an Opinion written by Justice Kavanaugh, was unanimous.
Comment: The statute neither cites, nor relies upon any of the Supreme Court’s caselaw citations in its 1996 Barnett Bank Case. The statute only cites, and relies upon the Barnett Bank Case itself, and then only for the singular “legal standard for preemption” recognized in that one case. The only “legal standard for preemption” discernible from the Barnett Bank Case is the traditional standard of irreconcilable conflict between the federal law and the state law, which requires that the state law standing in irreconcilable conflict with a Constitutionally enacted federal law be held to be void. See Barnett Bank of Marion County v. Nelson, 517 U.S. 25 (1996), and U.S. Const., Art. VI, 2d sentence.
Dan Rhea
RECENT RULINGS 