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OCC - Office of Comptroller of Currency

12/23/2025 | Press release | Distributed by Public on 12/23/2025 11:34

Preemption Determination on State Interest-on-Escrow Laws: Notice of Proposed Rulemaking

Summary

The Office of the Comptroller of the Currency (OCC) is proposing to issue a preemption determination concluding that federal law preempts state laws that eliminate OCC-regulated banks' flexibility to decide whether and to what extent to (1) pay interest or other compensation on funds placed in real estate escrow accounts; or (2) assess fees in connection with such accounts. Comments on all aspects of the proposal are due 30 days after it is published in the Federal Register.

Note for Community Banks

The proposed rule would apply to all community banks.1

Highlights

This proposed preemption determination would

  • conclude that (1) the National Bank Act preempts New York's Gen. Oblig. Law section 5-601, the state's interest-on-escrow law; (2) 11 other states have laws with substantively equivalent terms; and (3) these substantively equivalent state laws are also preempted.
  • complement the OCC's notice of proposed rulemaking to codify national banks' longstanding escrow accounts power, which the agency is concurrently issuing.

Further Information

Please contact Karen McSweeney, Special Counsel; Graham Bannon, Counsel; Priscilla Benner, Counsel; or Harry Naftalowitz, Attorney, Chief Counsel's Office, at (202) 649-5490.

Adam J. Cohen
Senior Deputy Comptroller and Chief Counsel

Related Link

1 "Banks" refers collectively to national banks, federal savings associations, covered savings associations, and federal branches and agencies of foreign banking organizations. OCC News Release 2025-89 (September 18, 2025) identifies "community banks" as institutions with up to $30 billion in assets.

OCC - Office of Comptroller of Currency published this content on December 23, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on December 23, 2025 at 17:35 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]