Statement of Interest
Pursuant to Federal Rule of Appellate Procedure 29, Amici respectfully submit this brief in support of Defendant-Appellant and affirmance of the District Court’s ruling.[1]
BPI. BPI is a nonpartisan public policy, research, and advocacy group, that represents universal banks, regional banks, and the major foreign banks doing business in the United States. BPI produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.
ABA. Established in 1875, the ABA is the united voice of America’s $23.4 trillion banking industry, comprised of small, regional, and large national and State banks that safeguard nearly $18.6 trillion in deposits, and extend more than $12.3 trillion in loans.
Chamber. The Chamber is the world’s largest business federation. It represents approximately 300,000 members and indirectly represents the interests of more than three million businesses and professional organizations of every size, in every industry sector, and from every region of the country. An important function of the Chamber is to represent the interests of its members in matters before Congress, the Executive Branch, and the courts.
CBA. The CBA is the trade association for banking services geared toward consumers and small businesses. Its members include the nation’s largest financial institutions, as well as many regional banks, which operate in all 50 States and collectively hold two-thirds of the country’s total deposits.
MBA. The MBA is the national association representing the real estate finance industry, an industry that employs more than 300,000 people in virtually every community in the country. Its membership of more than 2,200 companies includes all elements of real estate finance: independent mortgage banks, mortgage brokers, commercial banks, thrifts, REITs, Wall Street conduits, life insurance companies, credit unions, and others in the mortgage lending field.
Amici routinely submit amicus curiae briefs in cases that present questions critical to the banking and financial systems, including questions of national preemption under the National Bank Act of 1864 (“NBA”). Amici believe that the argument for preemption in this case is firmly grounded in common sense and precedent, and therefore submit this brief to assist the Court in considering in light of the Supreme Court’s decision in Cantero v. Bank of America, N.A., 602 U.S. 205 (2024), whether the NBA preempts the State law requirements that Defendant-Appellee is alleged to have violated.
Introduction
This appeal presents a federal question with far-reaching consequences: whether the National Bank Act of 1864 (“NBA”) preempts a State from imposing price controls on the products and services of national banks. Although this question is presented here in the specific form of R.I. Gen. Laws § 19-9-2(a)—which requires all mortgage lenders to pay interest on borrowers’ funds held in escrow accounts “at a rate equal to the rate paid to the mortgagee on its regular savings account, if offered, and otherwise at a rate not less than the prevailing market rate of interest for regular savings accounts offered by local financial institutions as determined by the director”—this Court’s decision could impact State attempts to set price controls on many other core national bank products, such as loan rates and checking account interest.
Following the U.S. Supreme Court’s decision in Cantero v. Bank of America, N.A., 602 U.S. 205 (2024), this Court is tasked with conducting a “nuanced comparative analysis,” comparing the nature of the interference caused by Section 19-9-2(a) with the interference in prior Supreme Court decisions to determine whether Section 19-9-2(a) is preempted. If the law “prevents or significantly interferes with the national bank’s exercise of its powers” in a manner akin to the interference in cases where the Supreme Court found preemption, then it too is preempted. Id. at 220 (citing Barnett Bank of Marion Cnty., N.A. v. Nelson, 517 U.S. 25 (1996)). This analysis entails a “practical assessment” of the State law, accounting for past precedent, the law’s text and structure, and, critically, common sense. 602 U.S. at 219 & 220 n.3. Based on Cantero, this Court should affirm the decision below and hold that Section 19-9-2(a) is preempted.
First, the “comparative analysis” required by the Supreme Court establishes that the NBA preempts State-imposed price controls. As Justice Kavanaugh explained at the Cantero oral argument, State-imposed price controls intrude on national banks’ core powers to a far greater extent than laws the Supreme Court has found to be preempted in the past. See infra at Part II.A. After all, setting prices—in this case, interest rates—is fundamental to the business of banking. By imposing what Justice Kavanaugh—who wrote the unanimous Cantero opinion—suggested was comparable to a “tax,” see Cantero Tr. at 13-14, national banks face additional costs, which in the case of escrow accounts must be offset by passing on increased costs to borrowers, or originating fewer loans altogether. Because of the “significant interference” State-imposed pricing schemes have on national banks’ operations, federal courts consistently find that State-imposed pricing schemes are preempted as to national banks. See, e.g., Appendix A (listing federal court cases holding that State-imposed pricing mandates are preempted under the NBA).
Second, Plaintiff’s theory of Cantero should be rejected. According to Plaintiff, Defendant-Appellee is required to accumulate “abundant record evidence” to establish “the text’s importance” and why the State law “pose[]s significant practical impediment” to the exercise of
a national bank power. Pl. Br. at 32, 42-44. But this theory would effectively require a bank-by-bank, rate-by-rate analysis to determine compliance, which is the opposite of the “practical” or “common sense” approach mandated by the Supreme Court. Indeed, the Court rejected Plaintiff’s argument that lower courts must amass a factual record demonstrating
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[1] The parties have consented to the filing of this amici curiae brief. See Fed. R. App. P. 29(a)(2). The undersigned counsel certify that no party’s counsel authored this brief in whole or in part, and no party or party’s counsel, or any other person, other than the Amici, their members, or their counsel, contributed money that was intended to fund preparing or submitting this brief. See Fed. R. App. P. 29(a)(4)(E).
