Alexandra Barrage, a partner in Troutman Pepper’s Corporate Practice Group, was quoted in the July 18, 2024 American Banker article, “Loper Bright and Cantero Are Ushering in a New Era of Preemption.”

“If I’m a national bank, I’m going to rethink my reliance on those preemption rules, given what the Supreme Court has said,” said Alexandra Barrage, a partner at Troutman Pepper and former FDIC executive. “It seems likely to me that the 2nd Circuit will not grant judicial deference to the [OCC’s] preemption rules, because the Administrative Procedures Act and the holding in Loper Bright says courts have to exercise their independent judgment, courts have to look at [whether] the agency acted within its statutory authority. Courts may not defer to an agency interpretation simply because the statute is ambiguous or unclear.”

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“They’re going to impact how state consumer financial laws and the OCC’s preemption rules are going to be understood by national banks, I think also inform how states understand national bank preemption — so it kind of goes both ways,” she said. “Loper Bright preserves what’s called Skidmore deference. And basically, Skidmore deference says courts can respectfully consider another branch of interpretation of the law, but the weight that a court gives to those over those interpretations depends on their thoroughness, depends on the validity of their reasoning.”

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“If you only look at the preemption rules, you would — if you’re a national bank — say ‘game over, we don’t have to implement what New York is telling us to do,‘” Barrage said. “But I think what Loper Bright instructs is that, no, it’s actually not game over. I think the 2nd Circuit will still look at precedent and affirm its decision by this time correctly applying Barnett and applying that ‘prevents or significantly interferes with’ test.”

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“At a minimum — and this is actually required by Dodd-Frank — they ought to take a ‘fresh look’ at the preemption determinations every five years as a technical matter, they’re required to do that under 1044 of Dodd-Frank,” she said. “It’s not clear to me that they’ve done that.”

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“What’s impacted here is pricing,” she noted. “The [banks] amicus briefs probably will take the position that the state law, even though it’s a consumer law, directly impacts how national banks price their products and how they function and that will be something I think the 2nd Circuit will consider, as it refreshes its analysis, adopting Barnett.”