On April 19, 2013, the US Court of Appeals for the Second Circuit issued an opinion in American International Group, Inc. v. Bank of America Corp., holding that the district court's denial of remand under the Edge Act was improper because the offshore banking transaction at issue was not performed by a federally chartered corporation governed by the Edge Act, who was a party to the suit.

The plaintiffs, American International Group, Inc. and its subsidiaries, had invested in residential mortgage-backed securities (RMBSs) that were underwritten, sponsored or sold by the defendants. The plaintiffs' complaint alleged that the defendants made fraudulent misrepresentations while underwriting or sponsoring the RMBSs they invested in. A small percentage of the mortgages underlying the RMBSs were secured by real property in US territories. The defendants removed the case to the US District Court for the Southern District of New York, asserting that the dispute fell under the Edge Act. The SDNY denied the plaintiffs' motion for remand but certified the question for interlocutory appeal.

The Edge Act, enacted to support US foreign trade, established international banking and financial corporations to be supervised by the Federal Reserve Board instead of state and local banking authorities. The defendants removed the action under the Edge Act's provision of federal jurisdiction over actions arising from "transactions involving international or foreign banking, or banking in a dependency or insular possession of the United States, or out of other international or foreign financial operations" (12 U.S.C. § 632). Plaintiff moved to remand, arguing that the Edge Act only applies where both:

After analyzing the grammar and context of the statute as well as Congress's intent, the Second Circuit agreed with the plaintiffs and held that for a party to remove a case under the Edge Act, the suit must have a federally chartered corporation as a party and the suit must arise out of that corporation's offshore banking or financial transaction. Therefore, the Second Circuit vacated the district court's order and remanded the case to the SDNY.