OCC Proposes Freedom for Banks in Real Estate Escrows
Published Date: 12/30/2025
Proposed Rule
Summary
The OCC is proposing a new rule to officially confirm that banks can set up and manage real estate lending escrow accounts however they see fit, including deciding on fees or compensation. This affects national banks and federal savings associations, giving them more freedom to use their business smarts. If you want to share your thoughts, make sure to comment by January 29, 2026!
Analyzed Economic Effects
4 provisions identified: 4 benefits, 0 costs, 0 mixed.
Banks can set escrow terms freely
The OCC proposes to formally allow national banks and Federal savings associations to establish and maintain real estate lending escrow accounts and to decide the terms and conditions for those accounts themselves. This includes decisions about investing escrowed funds, assessing fees for escrow accounts, and whether and to what extent to calculate or pay interest or other compensation to customers.
May encourage more mortgage lending
The OCC states that codifying banks' flexibility over escrow accounts could reduce uncertainty and may incentivize increased bank mortgage lending. The proposal notes escrow accounts are used in about 80% of U.S. residential mortgages, indicating the rule touches a large portion of mortgage activity.
No new costs for small institutions
The OCC states the proposed rule would not impose new mandates or direct costs on OCC‑supervised institutions and certifies under the Regulatory Flexibility Act that it would not have a significant economic impact on a substantial number of small entities. The OCC reports it currently supervises 1,005 institutions and estimates about 609 are small entities under the RFA thresholds.
Some states require escrow interest
The document lists states that require their state‑chartered banks to pay specified interest amounts on mortgage escrow accounts: CA, CT, ME, MD, MA, MN, NH, NY, OR, RI, UT, VT, and WI. The OCC notes roughly three quarters of states permit state‑chartered banks flexibility, but these listed states have explicit requirements.
Personalized for You
How does this regulation affect your finances?
Personalize government policy and PRIA will tell you what this federal register document means for your household, plus every other regulation we track. PRIA reads each provision against your financial profile to show you exactly what matters to your wallet.
Key Dates
Department and Agencies
Related Federal Register Documents
2026-17823, Unsafe or Unsound Practices, Matters Requiring Attention
The OCC and FDIC are rolling out a new rule starting November 2, 2026, that clearly defines what counts as 'unsafe or unsound practices' for banks and savings institutions. This update helps banks focus on big financial risks instead of small paperwork issues, making supervision smarter and fairer. Banks will need to adjust how they handle these risks, which could affect their operations and how they communicate with regulators.
2026-08328, National Bank Non-Interest Charges and Fees
Starting June 30, 2026, national banks can clearly charge all kinds of non-interest fees, like those from credit and debit card transactions—even if set with help from others. This rule makes it official that banks have the power to collect these fees, and the public can share their thoughts until May 29, 2026. If you use or work with banks, this could affect the fees you see on your statements!
2026-08298, Regulatory Capital Rule: Community Bank Leverage Ratio Framework
Starting July 1, 2026, community banks get a break! The minimum leverage ratio drops from 9% to 8%, making it easier for smaller banks to meet rules. Plus, banks can now stay in this easier framework longer—up to four straight quarters instead of two—helping them manage their money better without rushing.
2026-08143, Streamlining Regulations Concerning Public Welfare Investments, Open Market Collateralized Loan Obligations, and Federal Savings Association Nondiscrimination Requirements
The Treasury’s Office of the Comptroller of the Currency wants to simplify some banking rules by removing outdated or confusing parts. This affects banks, especially federal savings associations and those dealing with certain loan investments. They’re asking for public feedback by May 27, 2026, aiming to cut red tape and make compliance easier without changing costs.
2026-05960, Regulatory Capital Rules: Regulatory Capital and Standardized Approach for Risk-Weighted Assets
Big banks and community banks are getting new rules to better measure the risks in their loans and investments. The changes update how banks count certain assets and income when figuring out their safety net money, called regulatory capital. These updates aim to make banks safer and smarter with their money, with some rules kicking in soon and affecting how much capital banks need to hold.
2025-21625, Regulatory Capital Rule: Revisions to the Community Bank Leverage Ratio Framework
The government wants to make it easier for small banks to stay in a special low-risk capital program by lowering the required leverage ratio from 9% to 8%. They’re also giving banks more time—up to four quarters instead of two—to fix any issues without losing their spot. Banks and bank holding companies should weigh in by January 30, 2026, as these changes could save them money and reduce red tape.
Previous / Next Documents
Previous: 2025-23987, Preemption Determination: State Interest-on-Escrow Laws
The Treasury’s Office of the Comptroller of the Currency (OCC) wants to make it clear that federal law lets banks decide if they pay interest or charge fees on real estate escrow accounts, not state laws. This change affects banks regulated by the OCC and aims to simplify rules, helping banks manage escrow accounts more easily. People can share their thoughts by January 29, 2026, before the rule is finalized.
Next: 2025-24022, Modification of Class E Airspace; Ketchikan International Airport, Ketchikan, AK
The FAA wants to change the airspace rules around Ketchikan International Airport in Alaska to make flying safer and smoother, especially for pilots using instruments. These changes affect pilots and air traffic controllers and won’t cost anyone extra. If you have thoughts, you’ve got until February 13, 2026, to speak up!