Preemption Determination: State Interest-on-Escrow Laws

Document Headings Document headings vary by document type but may contain the following: the agency or agencies that issued and signed a document the number of the CFR title and the number of each part the document amends, proposes to amend, or is directly related to the agency docket number / agency internal file number the RIN which identifies each regulatory action listed in the Unified Agenda of Federal Regulatory and Deregulatory Actions See the Document Drafting Handbook for more details. Department of the Treasury Office of the Comptroller of the Currency 12 CFR Part 34 [Docket ID OCC-2025-0735] RIN 1557-AF45 ( printed page 29350) AGENCY: Office of the Comptroller of the Currency (OCC), Treasury. ACTION: Final rule. SUMMARY: The OCC is issuing a preemption determination concluding that Federal law preempts State laws that restrict OCC-regulated banks' flexibility to decide whether and to what extent to pay interest or other compensation on funds placed in real estate escrow accounts; or assess fees in connection with such accounts. This preemption determination will provide much-needed clarity to banks and other stakeholders. DATES: This final rule is effective on June 18, 2026. FOR FURTHER INFORMATION CONTACT: Karen McSweeney, Special Counsel, Graham Bannon, Counsel, Priscilla Benner, Counsel, and Harry Naftalowitz, Attorney, 202-649-5490; Office of the Comptroller of the Currency, 400 7th Street, SW, Washington, DC 20219. If you are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services. SUPPLEMENTARY INFORMATION: I. Background A. Introduction The dual banking system, which is “made up of parallel Federal and State banking systems” that “co-exist and compete,” is foundational to the American financial system. [ 1 ] Congress designed this system to permit banks to choose the charter—State or Federal—that best fits their business needs and allows them to best serve …