meta_id 3157971

On May 15, 2026, the Office of the Comptroller of the Currency (OCC) issued two final rules addressing national banks' and federal savings associations' real estate lending powers related to interest payments on escrow accounts. The first final rule codifies longstanding powers of national banks and federal savings associations to establish and maintain real estate lending escrow accounts. It clarifies that these institutions have flexibility in determining the terms and conditions of such accounts, including whether to offer compensation to customers or assess related fees. The OCC stated that codifying these powers provides clarity, reduces uncertainty regarding bank escrow practices, and may incentivise increased bank real estate lending. The second final rule is a preemption determination concluding that federal law preempts state laws restricting national banks' and federal savings associations' ability to decide whether and to what extent to pay interest or other compensation on funds held in real estate escrow accounts, or to assess fees in connection with such accounts. The determination specifically addresses New York's interest-on-escrow law and identifies 13 other states and territories with substantively equivalent laws, all of which are preempted. The final preemption determination added the interest-on-escrow laws of Guam and the U.S. Virgin Islands to the list of preempted provisions. The OCC noted that the U.S. Court of Appeals for the Second Circuit recently issued a decision concluding that federal law preempts New York's interest-on-escrow law, citing the proposed versions of the rules finalised on this date. The OCC stated that this clarity will help ensure national banks and federal savings associations continue to play an essential role in the nation's economy. Both final rules were adopted without changes to the proposed regulatory text.