US OCC Bank Preemption Dispute Could Reach Supreme Court

Following the 2008 financial crisis, the US Congress tightened the threshold for federal preemption of state banking laws through the 2010 Dodd-Frank Act. In Cantero, the Supreme Court on May 30, 2024, also required a case-by-case assessment. The dispute affects states’ consumer-protection powers and whether national banks can operate under a single set of rules, with implications for mortgage costs and card-processing fees paid by merchants.

On April 24, 2026, the Office of the Comptroller of the Currency ruled that an Illinois law due to take effect on July 1, which bars interchange fees on taxes and tips included in transactions, does not apply to national banks. On May 19, it also preempted mortgage-escrow interest laws in 14 jurisdictions, including New York’s minimum annual rate of 2%. State regulators and the banking industry remain divided, and related litigation could return to the Supreme Court.