OCC proposes preempting state laws on escrow interest
December 29, 2025 / By ICBA
The OCC proposed issuing a preemption determination saying that federal law preempts state laws that eliminate OCC-regulated banks’ flexibility in paying interest or assessing fees on funds placed in real estate escrow accounts.
Details: The OCC said:
The proposed preemption determination would conclude that the National Bank Act preempts New York’s Gen. Oblig. Law section 5-601, the state’s interest-on-escrow law.
Eleven other states have laws with substantively equivalent terms, and these laws would also be preempted.
The proposed determination would complement the OCC’s notice of proposed rulemaking to codify national banks’ longstanding escrow accounts power, which the agency is concurrently issuing.
Public Comment Period: Comments on the proposal are due 30 days after it is published in the Federal Register. ICBA will be submitting comments.
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