Breaking Developments in National Bank Act Preemption:What the First Circuit’s Conti Decision Means for You

The compliance and litigation risks for national banks just changed. On September 22, 2025, the First Circuit issued its opinion in Conti v. Citizens Bank, N.A., ruling that the National Bank Act does not preempt Rhode Island’s law requiring banks to pay interest on mortgage escrow accounts.

On October 2, 2025, by a 2-1 vote, a panel of the Ninth Circuit issued its opinion in Kivett v. Flagstar Bank, FSB, ruling that the National Bank Act does not preempt California’s law requiring banks to pay interest on mortgage escrow accounts.

The Conti decision - the very first appellate ruling applying the Supreme Court’s Cantero v. Bank of America opinion - has enormous implications. It could open the door to a wide range of state consumer protection laws applying to national banks, undermining decades of reliance on OCC preemption regulations. (While the Kivett opinion reaches the same no preemption ruling as Conti, Kivett’s reasoning is based on an earlier 9th Circuit no-preemption ruling in Lusniak v. Bank of America — a provision of the Federal Truth-in-Lending Act requiring the payment of interest on mortgage escrow accounts, if required under state law, on certain higher-rate mortgage loans of the type not implicated in Kivett — rather than on an application of guidance provided by the Supreme Court in Cantero. As such, we don’t believe that the Kivett case will be the final word on the issue within the Ninth Circuit.)

Why Conti matters:

• National banks may now face state law obligations previously believed to be preempted

• A similar case in the Second Circuit (the Cantero case on remand from the Supreme Court) could create a de facto nationwide shift

• Compliance strategies, loan terms, and disclosures may all require immediate reassessment

• Consumer advocates are already eyeing new opportunities for litigation and enforcement

Join our expert panel as they break down what you need to know - and what you should do now:

• The First Circuit’s reasoning and how it narrows federal preemption

• Why the Ninth Circuit's opinion has limited precedential effect and is likely to result in en banc review by the Ninth Circuit

• Which state laws national banks may now need to comply with

• Practical compliance steps to mitigate litigation and regulatory risks

• What to watch for in upcoming appeals and possible Supreme Court review

• What National Bank Act preemption remains intact after the Conti opinion

• Is there still value to a national bank or federal thrift charter?

We will be joined by special guest speaker Arthur E. Wilmarth, Jr., Professor Emeritus of Law at The George Washington University.

Reserve your spot now to stay ahead of the regulatory curve.

Don’t wait for regulators - or plaintiffs’ attorneys - to tell you what this means. Get the insights you need to protect your institution and prepare for the next wave of preemption litigation.