Attorney General Clark Sues to Block Trump Administration from Invalidating State Mortgage Laws

Attorney General Clark and a coalition of 10 attorneys general filed a lawsuit today to block the Trump Administration's effort to override state mortgage laws through a decision by the Office of the Comptroller of the Currency (OCC) to invalidate state laws requiring mortgage lenders to pay interest on the money they require borrowers to deposit into escrow accounts to cover taxes and insurance. Vermont is one of 14 states that, by statute, requires banks to pay interest on mortgage escrow accounts.

"In a time when homeownership feels out of reach for so many Vermonters, this decision from the Trump Administration will create additional barriers for prospective homeowners and place greater financial strain on current homeowners," said Attorney General Clark. "Our lawsuit seeks to not only prevent that harm, but also to stop a dangerous precedent of the federal government attempting to unlawfully override state law. States must be able to protect their residents and enact laws that safeguard consumers."

In May 2026, responding to a request from banking lobbyists, the OCC issued a rule that claims to invalidate state laws requiring lenders to share the money they earn on borrowers' escrowed funds with the borrowers themselves. According to the lawsuit, the OCC's rule ignores federal court rulings upholding state interest-on-escrow laws and skips the safeguards Congress put in place to prevent exactly this kind of bureaucratic overreach.

Joining Attorney General Clark in filing this lawsuit are the attorneys general of California, Connecticut, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, and Rhode Island.

This lawsuit is the 61st case Attorney General Clark has brought against the Trump Administration since President Trump took office in January 2025. For more information on actions taken by the Attorney General on behalf of Vermonters, visit our website.

Contact: Haley Sommer, Senior Advisor to the Attorney General, 802-828-3171