OCC Issues Two Proposals for Interest on Escrows

Just before Christmas, the Office of the Comptroller of the Currency (“OCC”) issued two notices of proposed rulemaking regarding national banks’ and federal savings associations’ real estate lending powers with respect to the payment of interest on funds held in escrow accounts. The first asserts “longstanding powers of national banks and federal savings associations to establish or maintain real estate lending escrow accounts and to exercise flexibility in making business judgment as to the terms and conditions of such accounts, including whether and to what extent to offer any compensation paid to customers or to assess any related fees.” The second is a preemption determination that concludes that federal law preempts the New York interest-on-escrow law that was the subject of the U.S. Supreme Court’s decision in Cantero v Bank…
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