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21-400
Appellate - 2nd Circuit
4190 CONTRACT-Other Contract Action
The Second Circuit ruled Tuesday that national banks are exempt from a New York law that requires interest to be paid on mortgage escrow accounts, handing a key victory to Bank of America NA in closely watched litigation testing the limits of states' banking regulatory authority.
The Second Circuit should join fellow federal courts in finding that a New York statute requiring all banks to pay at least 2% interest on mortgage-escrow accounts isn't preempted, a former Bank of America mortgage customer has told the appeals court following the U.S. Supreme Court's remand of the matter.
The U.S. Supreme Court on Monday asked the solicitor general to weigh in on New York's attempt to force Bank of America NA to pay interest on mortgage escrow accounts after the Second Circuit sided with the lender in September.
The Second Circuit ruled Thursday that Bank of America NA did not have to follow a New York state law requiring lenders to pay certain interest on mortgage escrow accounts, holding that the requirement is federally preempted for national banks.
The Office of the Comptroller of the Currency is going to bat for Bank of America NA in a pair of Second Circuit appeals challenging the applicability of a New York state law requiring the payment of interest on mortgage escrow accounts, arguing that this law should be ruled federally preempted for the national bank.