On May 30, 2024, in a unanimous opinion authored by Justice Kavanaugh, the U.S. Supreme Court issued its first decision on National Bank Act (“NBA”) preemption of state law since the codification of the Barnett Bank decision in Dodd-Frank in 2010. The Court directed lower courts to reach preemption decisions based on a “practical assessment” of whether the state law “prevents or significantly interferes with” a national bank’s power. The Supreme Court instructed lower courts to make this determination by comparing the state laws at issue to those the Court had analyzed in previous preemption decisions. The Supreme Court rejected the parties’ proposals for more “bright line” tests, or even additional guidance, for ascertaining the meaning of “prevents or significantly interferes” because Congress declined to establish such a bright-line test in Dodd Frank. The Court noted, but did not address, the role of the Office of the Comptroller of the Currency (“OCC”) in making determinations about whether a state law regulating a national bank is preempted. As a result of the Court’s decision, national banks arguing that state laws are preempted must continue litigating on a case-by-case basis.
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