SUPREME COURT TO HEAR NATIONAL BANK ACT PREEMPTION CASE

The United States Supreme Court has agreed to hear a case involving the National Bank Act and the preemption of state laws that require lenders and holders to pay interest on residential mortgage escrow accounts, known as “escrow-interest statutes.” Federal circuit courts are currently split on whether these laws are preempted by the National Bank Act. Thirteen states have escrow-interest statutes, which generally require lenders engaged in the business of making residential mortgage loans to pay interest on escrow accounts that are required for the payment of a mortgage borrower’s property taxes and insurance premiums. Read More