New Federal Rules Could End Mortgage Escrow Interest for some Homeowners. States Are Suing to Block Them

New federal rules could end mortgage escrow interest for some homeowners. States are suing to block them

A coalition of state attorneys general initiated legal action against the Office of the Comptroller of the Currency, challenging two rules issued in May that became effective in June. The rules permit national banks and federal savings associations regulated by the OCC to establish their own terms for mortgage escrow accounts without regard to state-mandated interest payments. Mortgage escrow accounts hold funds designated for property taxes, ho…

Multi-State Coalition Sues OCC Over Rules Preempting State Interest-On-Escrow Laws

A group of ten state attorneys general sued the OCC over recent rulemakings which affirmed that national banks are exempt from state laws requiring payment of interest on mortgage escrow accounts. In May 2026, the OCC issued the two final rules which are the subject of the suit (as previously discussed here).  The first rule clarified that the powers of national banks include the ability to establish mortgage escrow accounts.  The rule further s…