The Office of the Comptroller of the Currency (OCC) requested comment on two proposals affecting national banks’ and federal savings associations’ real estate lending powers for escrow accounts, including whether to pay interest or other compensation on escrowed funds and whether to assess related fees. One proposal would codify banks’ longstanding authority to establish or maintain real estate lending escrow accounts and to apply business judgment to account terms and conditions, including the extent of any customer compensation and any related fees. The second proposal would issue a preemption determination that federal law preempts state laws that remove banks’ flexibility to decide whether and to what extent to pay interest or other compensation on real estate escrow accounts or to charge fees, specifically concluding that a New York interest-on-escrow law is preempted and that 11 substantively equivalent state laws are also preempted. Comments on both proposals are due 30 days after publication in the Federal Register.
Office of the Comptroller of the Currency 2025-12-23
Office of the Comptroller of the Currency consults on codifying escrow-account discretion and preempting state interest-on-escrow laws
The Office of the Comptroller of the Currency (OCC) seeks comments on two proposals regarding national banks' and federal savings associations' real estate lending escrow accounts. One proposal codifies banks' authority over escrow account terms, while the other preempts state laws, including a New York law, that limit banks' discretion on interest payments and fees.