On August 11, 2026, Oregon Attorney General Dan Rayfield and New York Attorney General Letitia James co-led a coalition of 10 attorneys general in filing a lawsuit against the Office of the Comptroller of the Currency (OCC), challenging two rules that invalidate state laws requiring mortgage lenders to pay borrowers interest on the money they require borrowers to deposit into escrow accounts to cover taxes and insurance.  

The coalition argues that the OCC unlawfully overrode state consumer protection laws that prevent banks from profiting from homeowners’ own money  held by lenders for future expenses. If allowed to stand, the rules could cost borrowers thousands of dollars in interest payments while allowing national banks to retain earnings generated from homeowners’ escrowed funds. 

State interest-on-escrow laws are designed to ensure that homeowners receive a share of the earnings generated from money they are required to place in escrow accounts. Before these protections were enacted, some lenders required borrowers to deposit significant sums well before taxes or insurance payments were due while paying borrowers no interest, effectively providing lenders with interest-free loans.  

In May 2026, following a request from banking lobbyists, the OCC issued rules purporting to preempt these state laws for national banks. The coalition argues that the rules would not only deprive homeowners of interest payments but also disadvantage smaller, state-chartered banks that would remain subject to state requirements. 

The lawsuit alleges that the OCC exceeded its statutory rulemaking authority and violated the Administrative Procedure Act. The AG coalition argues that Congress established limits on when federal banking regulators may preempt state consumer financial laws and that the OCC’s rules unlawfully disregard those safeguards. The states are asking the court to block the OCC’s rules and preserve their ability to enforce state interest-on-escrow protections. 

Time and again, we’ve seen the Trump Administration hand out favors to insiders and corporate special interests at the expense of Oregonians. This is a case in point: the Administration wants to let big banks pad their profits with money that, by law, belongs to Oregon families.Attorney General Dan Rayfield