Attorney General William Tong Sues to Block Trump Administration’s Lawless Handout to Big Banks

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08/11/2026

Attorney General William Tong Sues to Block Trump Administration's Lawless Handout to Big Banks

Rule lets big banks keep money that should be going back into Connecticut homeowners' pockets

(Hartford, CT)- Attorney General William Tong and a coalition of 10 attorneys general filed a lawsuit today opposing a new rule issued by federal regulator of national banks, the Office of the Comptroller of the Currency (OCC), that would strip states of their authority to require national banks to pay interest on homeowners' mortgage escrow accounts.

Mortgage lenders require borrowers to deposit money into escrow accounts to cover expenses such as property taxes and homeowners' insurance. While banks hold the money, it earns interest. In many states, mortgage lenders are required to pay a portion of that interest to homeowners. In May 2026, the OCC issued new rules that would preempt state interest-on-escrow law for national banks, allowing the banks to keep the interest instead.

"Homeownership is out of reach for too many families already and the last thing they need is another rule that helps big banks profit off their hard-earned money. This new rule will put banks first, families last, and strip states of yet another tool put in place to help consumers," said Attorney General Tong.

According to the lawsuit, Oregon et al., v. Office of the Comptroller of the Currency et al., the OCC ignored federal court decisions upholding these laws and bypassed the safeguards Congress put in place to prevent this type of federal overreach.

The OCC's rule also puts Connecticut's smaller, state-chartered banks at a competitive disadvantage. While national banks would be exempt from Connecticut's interest-on-escrow law, state-chartered banks would still be required to comply.

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

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