Homebuyers Say New York Law Is No Burden for Bank of America

Bank of America Corp. and other national banks face no major impediment adhering to a New York mortgage law, plaintiffs told a federal appeals court—the latest salvo in a long-standing fight over federal regulators’ authority to override state banking rules.

The US Court of Appeals for the Second Circuit in a 2022 decision found the Civil War-era National Bank Act preempts New York’s requirement for banks to pay at least 2% interest on mortgage escrow accounts.

But the US Supreme Court in a unanimous May ruling sent the case, Cantero v. Bank of America Corp., back to the ...