Joint Letter to the OCC on the Proposed Preemption Determination, State Interest-on-Escrow Laws

Dear Comptroller Gould:

The American Bankers Association (ABA) and the U.S. Chamber of Commerce (Chamber) appreciate the opportunity to comment on the proposed preemption determination published by the Office of the Comptroller of the Currency (OCC). Acting under 12 U.S.C. § 25b(b)(1)(B), the OCC proposes to issue a 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." 90 Fed. Reg. 61093 (Dec. 30, 2025). In a parallel rulemaking, the OCC also proposes to codify banks' longstanding power to exercise their business judgment in offering and maintaining mortgage-escrow accounts. See Notice of Proposed Rulemaking, Real Estate Lending Escrow Accounts, 90 Fed. Reg. 61099 (Dec. 30, 2025), Docket ID OCC-2025-0736. ABA and the Chamber strongly support the OCC’s proposals, which will help clarify that state mortgage-escrow laws are preempted to the extent they purport to apply to federally chartered banks and Federal savings associations (collectively, "national banks").

This comment letter proceeds in three parts. First, we provide a brief overview of why state mortgage-escrow laws are already preempted under federal law. Second, we explain why the OCC’s proposed actions will help eliminate uncertainty that nonetheless has arisen regarding this preemption, following recent efforts by plaintiffs to enforce state mortgage-escrow laws against national banks. Third, we offer a few suggestions for how the OCC can strengthen its final preemption determination, to best support the federal framework of national bank preemption and the important role of national banks in the American financial system. As the OCC recognizes, robust federal preemption is essential to ensuring that national banks can serve American consumers efficiently and effectively.

Download the joint comment letter to read the full text.