OCC issues final rule on real estate lending escrow accounts

The Office of the Comptroller of the Currency finalized a rule confirming the longstanding authority of national banks and federal savings associations to set up real estate lending escrow accounts.

The first rule codifies longstanding powers of national banks and federal savings associations to establish or maintain real estate lending escrow accounts and to exercise flexibility in making business judgments about the terms and conditions of such accounts, including whether to offer any compensation to customers or to assess any related fees.

The second rule states that federal law preempts state laws that eliminate national banks’ and federal savings associations’ flexibility to decide whether and to what extent to pay interest or other compensation on funds held in real estate escrow accounts, or to assess fees in connection with such accounts.