2025 Regulatory Summit

Non-Preemptive Cases for Barnett Consideration

Facts

Preempted

Kentucky law required dormant deposits to escheat to the state after a series of due process requirements to prove abandonment. NBA empowers national banks to accept deposits. Massachusetts law prohibits preferential transfer of property in anticipation of insolvency. NBA empowers banks to take real estate.

No — due process measures to ensure dormancy in line with state abandoned property requirements.

Anderson Nat'l Bank v. Luckett

No — “No function of such banks is destroyed or hampered by allowing the banks to exercise the power to take real estate, provided only they do so under the same conditions and restrictions to which all the other citizens of the state are subjected” No — “It is only when the state law incapacitates the banks from discharging their duties to the government that it becomes unconstitutional. We do not see the remotest probability of this in their being required to pay the tax which their stockholders owe to the state for the shares of their capital stock when the law of the federal government authorizes the tax.

McClellan v. Chipman

Kentucky law taxes shares of banks. NBA empowers banks to issue shares and limits taxation on such shares to mirror taxation of state bank shares.

National Bank v. Commonwealth

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Post-Remand Developments

• Flagstar (Ninth Circuit) – Panel reaffirmed Lusnak ; en banc review granted.

– Flagstar/Trades: California law improperly sets pricing terms for national banks. – Borrowers: Flagstar failed to show significant interference with banking powers. – CSBS: CA IOE law imposes less burden than seven SCOTUS preemption rulings; Flagstar already complies without issue. • Cantero (Second Circuit) – Borrower: NY IOE law causes minimal interference; no evidence of burden. – Bank of America/Trades: IOE law alters mortgage terms, risks inconsistent state patchwork. – CSBS: No showing of losses; preemption would unfairly advantage national banks. – Oral arguments: March 3, 2025 — ruling pending.

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