As recently predicted in our May 8, 2026 blog, a new cert petition was filed on May 22, 2026 in Cantero v. Bank of America, asking the U.S. Supreme Court to revisit, again, the increasingly important question whether the National Bank Act preempts state laws requiring national banks to pay interest on mortgage escrow accounts. The petition follows the Second Circuit’s May 5, 2026 decision on remand from the Supreme Court, in which the court once again held that New York’s interest-on-escrow statute is preempted as applied to national banks.
The petition argues that the Second Circuit effectively reinstated the same expansive preemption approach that the Supreme Court unanimously rejected in its 2024 decision in the case. According to the petitioners, although the Second Circuit purported to apply the “practical assessment” and “nuanced comparative analysis” required by the Supreme Court under the Dodd-Frank Act and Barnett Bank of Marion County, N.A. v. Nelson, the court again treated any state law limiting a national bank’s flexibility as preempted.
The petition squarely presents the question:
“Does the National Bank Act preempt the application of state interest-on-escrow laws to national banks?”
The petition’s principal argument is that the Second Circuit’s latest decision creates an acknowledged circuit split with the First Circuit’s 2025 decision in Conti v. Citizens Bank, N.A. There, the First Circuit held that Rhode Island’s materially similar escrow-interest statute is not preempted. The petition emphasizes that the Second Circuit expressly recognized the conflict, stating that the First Circuit “reached the opposite conclusion” but that it “disagree[d]” with the First Circuit’s reasoning and therefore “decline[d] to follow” it.
According to the petitioners, the disagreement between the circuits is not merely about outcome, but about the proper application of the Supreme Court’s 2024 Cantero decision. The petition contends that the First Circuit properly focused on whether federal law expressly grants national banks discretion to refuse to pay interest on escrow accounts, while the Second Circuit improperly inferred broad preemptive authority from congressional silence in statutes such as RESPA and TILA.
The petition also attacks the Second Circuit’s reliance on generalized notions of “efficiency” and “flexibility.” Petitioners argue that virtually every state consumer financial law affects bank efficiency to some degree and that accepting such reasoning would effectively revive the broad field-preemption regime Congress repudiated in the Dodd-Frank Act. The dissenting opinion by Judge Myrna Pérez is featured prominently throughout the petition, particularly her observation that the Second Circuit’s revised approach is “just a relabeling of the rejected control test.”
The petition further stresses the practical importance of the issue to the national banking system. It notes that fourteen states currently maintain interest-on-escrow laws and that national banks hold billions of dollars in mortgage escrow accounts. The petition also repeatedly invokes Congress’s criticism in the Dodd-Frank Act of aggressive OCC preemption positions before the 2008 financial crisis, arguing that the Second Circuit’s approach risks restoring the expansive preemption regime Congress sought to curtail.
Notably, the petition characterizes this case as the superior vehicle for resolving the split, as compared with the Ninth Circuit’s decision in Kivett v. Flagstar Bank, FSB and even the First Circuit’s decision in Conti. Petitioners point out that the Supreme Court has already once granted certiorari in this very case, meaning the Court is already familiar with the record and procedural posture. (Very recently, on April 29, 2026, and shortly before the Second Circuit issued its May 5, 2026 opinion in Cantero, the Supreme Court denied the petition for a writ of certiorari filed by Citizens Bank in Conti, in light of the recent Cantero Second Circuit opinion, Citizens Bank filed a petition for rehearing in the Supreme Court, arguing that the newly created circuit split justified reconsideration of the cert denial. A cert petition has not yet been filed in the Kivett case.)
The petition arrives at a particularly significant moment because the OCC itself has separately on May 15, 2026 finalized a formal preemption regulation and determination addressing state mortgage interest-on-escrow laws. Under the Dodd-Frank Act, OCC regulations or preemption determinations dealing with state consumer financial laws are not entitled to Chevron deference. Instead, Congress statutorily mandated that courts apply the less-deferential Skidmore standard, meaning the agency’s weight depends solely on its reasoning, thoroughness, and factual consistency.
Given the acknowledged circuit split, the importance of the issue to national banks and consumers alike, and the Supreme Court’s prior involvement in the dispute, this petition appears to have a meaningful chance of attracting the Court’s attention. Whether the Court ultimately grants review may depend in part on whether it believes the Second Circuit genuinely followed the analytical framework the Court prescribed in 2024 or instead merely repackaged the same broad preemption theory employed in the earlier Second Circuit opinion under different terminology.