Attorneys representing multiple U.S. states have announced plans to sue the Trump administration this week. The news comes after the Office of the Comptroller of the Currency issued two new rules in May that would change the way interest is earned on escrow payments.
Currently, more than a dozen states have rules on the books that require mortgage companies to pay homeowners for the interest their escrow payments collect while they sit in the lender’s bank accounts, which Oregon Live estimates can add up to $200 to $300 a year for most homeowners in the state. However, the two new rules would exclude certain lenders from this rule, effectively costing those homeowners a big chunk of change.
As such, at least 10 states, including Oregon, filed a lawsuit against the administration on Aug. 11, 2026, according to Bloomberg Law. Their argument? Owning a home is already more expensive than ever, and these new rules could increase those costs for cash-strapped homeowners.
Here’s what we know, including which states have these types of laws on the books, and which states are suing so that they keep them there.
Mortgage Lenders in Certain States Have to Pay Borrowers Interest on Their Money
People who escrow their taxes and insurance through their lender pay a little bit extra with every mortgage payment, which includes things like real estate taxes and homeowners insurance. Because these bills come due at different times of the year, lenders take the total annual payment and divide it by 12, and then they add that monthly amount to your bill.
For example, if your real estate taxes are escrowed, and you pay $5,000 a year in taxes, your monthly mortgage payment will include an extra $416.67 a month to cover that bill when it comes due. Now, if you were to keep that money in your savings account, socking away an extra $416.67 a month until your tax bill was due, you would be earning interest on that money.
Lawmakers in 12 states say the homeowners who send that money to their lender for safekeeping should also get to earn interest on the funds.
According to Investopedia, the states that have regulations regarding interest-bearing escrow accounts include Alaska, California, Connecticut, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Oregon, Rhode Island, Utah, Vermont, and Wisconsin.
The Trump Administration Wants to Exclude Certain Types of Companies From These Rules
In May, the Office of the Comptroller of the Currency issued two changes to these rules, which would exclude national banks and federal savings associations. Now, at least 10 states are fighting back, including places like New York and Oregon, which are leading the charge. “At a time when homeownership is more expensive than ever, the Trump administration is trying to make it even more costly with these unlawful rules,” New York Attorney General Letitia James said in a statement. “Big banks and mortgage lenders should not be able to force homeowners to lock away significant amounts of money without paying interest.”
Oregon Live says that California, Maine, Connecticut, Maryland, Minnesota, Massachusetts, Rhode Island, and Vermont are also joining the fight.
According to The Hill, this is a battle that has already been waged in the courts in New York as recently as 2022, 2024, and again on remand in 2026. If you live in one of the states affected by these potential changes, you’ll definitely want to pay close attention to what comes next.