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Saturday
May162026

What's New? Interest on Mortgage Escrow Accounts in NY

DateSaturday, May 16, 2026 at 9:21AM by AuthorBanking Spectrum
On May 5, 2026, the United States Court of Appeals for the Second Circuit ruled that New York's General Obligations Law §5-601 requiring a 2% interest rate on mortgage escrow accounts is preempted by federal law because it significantly interferes with national banking powers. The court concluded that such mandates limit a bank's broad authority to set mortgage terms and manage risk-mitigation tools efficiently.
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