“Confirmed Judges, Confirmed Fears” is a blog series documenting the harmful impact of President Trump’s judges on Americans’ rights and liberties. It includes judges nominated in both his first and second terms.
What’s at stake in this case?
Bank customers sought to collect 2% interest on their mortgage escrow accounts as required by state law.
What happened in this case?
Alex Cantero took out a mortgage loan from Bank of America (BOA), which required him to make a deposit in a mortgage escrow account, but BOA refused to pay him the 2% interest on the account required by state law, claiming that the state statute was preempted by federal law. Cantero and several other consumers filed a class action, and a district court rejected BOA’s claims.
The Second Circuit agreed with BOA, but the Supreme Court reversed the ruling. On remand, however, Trump judge Michael Park wrote a 2-1 decision in May, joined by George W Bush judge Debra Livingston that again ruled that the state law requiring interest was preempted by federal law. Biden judge Myrna Perez dissented in Cantero v Bank of America.
Why did Judge Perez dissent?
Judge Perez disagreed with the majority’s “strained analysis” of the Supreme Court’s previous decision in the case. She carefully analyzed the four possible types of interference that a state law could cause to national banks, and concluded that a law simply requiring banks to pay 2% interest on escrow accounts will not “significantly interfere with national banks’ exercise of powers” and is thus not preempted.
Why is the decision harmful?
The ruling by Trump judge Park clearly harms Alex Cantero and many other consumers by depriving them of the 2% interest on escrow accounts that they were entitled to get under state law. Unless the Supreme Court again reverses the Second Circuit, it also sets a bad precedent concerning preemption of state consumer laws relating to national banks. This is particularly so in the Second Circuit, which includes New York, Connecticut, and Vermont. The decision also illustrates the importance of our federal courts to health, welfare and justice and the significance of having fair-minded judges on the federal bench.