11 States Sue OCC to Block May Rule Letting Banks Keep Escrow Interest
Updated
Updated · CT.gov · Aug 11
11 States Sue OCC to Block May Rule Letting Banks Keep Escrow Interest
3 articles · Updated · CT.gov · Aug 11
Summary
A coalition of 11 states filed suit against the OCC, seeking to stop a May 2026 rule that bars states from requiring national banks to pay interest on mortgage escrow accounts.
The states say the rule unlawfully preempts consumer-protection laws, ignores court decisions upholding those laws, and sidesteps Dodd-Frank limits on federal preemption.
Mortgage escrow accounts hold borrowers’ money for property taxes and homeowners’ insurance; under the OCC rule, national banks could keep interest that some state laws now direct to homeowners.
Connecticut Attorney General William Tong said the change would benefit big banks at families’ expense and leave state-chartered banks at a competitive disadvantage because they would still have to comply.