A panel of three judges for the U.S. Court of Appeals for the Ninth Circuit has voted 2-1 to reject a request from Flagstar Bank to reconsider its October opinion upholding states’ authority to enforce interest-on-escrow laws.
With the Office of the Comptroller of the Currency (OCC), a federal banking regulator, recently proposing a pair of rules that would enable federally chartered banks to circumvent paying interest on mortgage escrow funds by other means, the March 26 ruling preserves key legal and regulatory hurdles to banks’ success in achieving these changes.
The Conference of State Bank Supervisors (CSBS), a national organization of financial regulators from all U.S. states and territories, applauded the Ninth Circuit for “reaffirmi...