Supreme Court gives homeowners another chance in escrow dispute with Bank of America
Supreme Court gives homeowners another chance in escrow dispute with Bank of America
Supreme Court Ruling on Escrow Interest
Unanimous Decision
The Supreme Court unanimously overturned an appeals court ruling that favored Bank of America, allowing homeowners to pursue claims for interest on mortgage escrow accounts.
State Laws on Escrow Interest
New York and thirteen other states mandate that banks pay interest on funds escrowed for taxes and insurance, which Bank of America has contested.
Impact of Dodd-Frank Act
Justice Kavanaugh highlighted that the Dodd-Frank Act clarifies that not all state banking laws are overridden by federal laws, supporting more nuanced legal analysis.
Consumer Victory
The decision is seen as a win for consumers, reinforcing the intent of the Dodd-Frank Act to limit preemption of state consumer financial laws.
Which specific bank's actions were central to this Supreme Court case?
The specific bank whose actions were central to this Supreme Court case is Bank of America. The case involved homeowners attempting to force Bank of America and other large banks to pay interest on mortgage escrow accounts.
How did the appeals court initially rule on this matter before it reached the Supreme Court?
The appeals court initially ruled in favor of Bank of America, granting the bank's request to dismiss the lawsuits brought by homeowners4. The basis for this decision was that federal law governing national banks does not allow for state-by-state regulation, which in this case referred to the requirement by New York (and similar laws in other states) that banks must pay interest on mortgage escrow accounts2.