On May 15, 2026, the Office of the Comptroller of the Currency (OCC) issued two rulings:
One rule confirms that federal law preempts state mandates requiring national banks to pay interest on mortgage escrow accounts. This determination covers 14 jurisdictions, including New York, and establishes that the decision to pay interest or assess fees is a discretionary business judgment for each bank. By prioritizing federal standards over varying state laws, the OCC aims to provide legal clarity and foster a more efficient national mortgage market.
The second rule confirms that federal law preempts state mandates requiring national banks to pay interest on mortgage escrow accounts. This determination applies to 14 jurisdictions, including New York and California, and reaffirms that banks have the discretionary authority to set their own terms for interest and service fees. By removing these state-level restrictions, the OCC aims to eliminate regulatory ambiguity and foster a more efficient national mortgage market through a uniform set of federal rules.
Article originally appeared on Banking Spectrum (https://www.bankingspectrum.com/).
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