Ten state attorneys general are suing the Office of the Comptroller of the Currency (OCC), seeking to vacate a pair of final rules issued by the federal banking regulator in May to circumvent state laws requiring banks to pay interest to homeowners on mortgage escrow balances.
In implementing the rules this spring, the OCC claimed state interest-on-escrow laws “significantly interfere” with the ability of national banks to exercise their authorities, providing the basis for federal preemption under the OCC’s new rules.
The attorneys general, all from Democrat-led states, said in their Tuesday court filing that the banking regulator has misapplied “substantive” preemption standards laid out in federal banking law. They also claimed that the ...