Oregon Sues Trump Admin over New Mortgage Interest Rule
The attorneys general say the rules exceed the OCC’s authority and would let lenders profit from escrow deposits without paying interest.
- On Tuesday, Oregon and 10 other states filed a lawsuit against the Trump administration challenging two OCC rules that would allow banks to retain interest earned on homeowners' escrow accounts for taxes and insurance.
- The dispute centers on mortgage escrow accounts where lenders hold funds to cover property taxes and insurance. OCC rules issued in May state federal law preempts interest-on-escrow laws in more than a dozen states and two territories.
- Oregon Attorney General Dan Rayfield described the change as a "hidden tax" on consumers. Oregon law requires banks to pay 2.61% interest on these funds, and the rule change could cost 703,000 Oregonians about $200 annually.
- But the OCC contends banks have long held authority to "exercise flexibility" regarding escrow terms. Attorney General Letitia James said the administration is making homeownership more costly, and her office is taking action to defend state laws.
- The Supreme Court held in a unanimous 2024 decision that a lower court applied the wrong legal test regarding federal preemption. The court sent the case back to the Second Circuit to determine if state law "prevents or significantly interferes" with national banks.
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8 Articles
Maryland, nine other states sue White House to protect interest payments to homeowners
Oregon Attorney General Dan Rayfield, with New York Attorney General Letitia James, is leading the lawsuit over mortgage escrow accounts that was filed Tuesday in the U.S. District Court of Portland. (Photo by Mia Maldonado/Oregon Capital Chronicle)A coalition of 10 Democratic-led states, including Maryland, sued the Trump administration Tuesday over a new rule that could cost homeowners hundreds or even thousands of dollars by preempting state …
Columbia Gorge News
Oregon, nine other states sue Trump admin to protect interest payments to homeowners
A coalition of 10 Democratic-led states, including Oregon, sued the Trump administration Tuesday over a new rule that could cost homeowners hundreds or even thousands of dollars by preempting state laws that require mortgage lenders to pay interest on the…
Democratic attorneys general suing Trump administration over new interest rules for homeowners
A group of Democratic state attorneys general is suing the Trump administration to block its attempt to invalidate state requirements that mortgage lenders pay homeowners interest on money deposited into escrow accounts, calling it an “unlawful handout” to big banks. The lawsuit, filed Tuesday in a federal court in Oregon on behalf of 10 blue states, challenges…
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