SJRES-203-119
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Sponsored by Jack Reed (D-RI)
What it does
This joint resolution would use the Congressional Review Act (CRA) to nullify a rule issued by the Office of the Comptroller of the Currency (OCC) on May 19, 2026. That OCC rule determined that federal banking law preempts state laws requiring banks to pay interest on mortgage escrow accounts. If this resolution passes, the OCC rule would have no force or effect, and state interest-on-escrow laws would remain enforceable against national banks.
Who benefits
Homeowners in states that have enacted laws requiring banks to pay interest on mortgage escrow accounts — including states like New York, California, and others with such statutes — who would continue to receive interest payments on their escrowed funds. State governments that would retain authority to enforce their own consumer protection laws against national banks. Community banks and credit unions chartered under state law, which already comply with state escrow interest rules and would face a more level competitive playing field if national banks must do the same.
Who is hurt
National banks and federally chartered thrifts that would lose the OCC's preemption shield and be required to pay interest on escrow accounts in states with such laws, increasing their operational costs. Mortgage servicers operating across multiple states who would face a patchwork of varying state escrow interest requirements rather than a single uniform federal standard. Borrowers in states without escrow interest laws who would see no direct benefit and could indirectly face slightly higher mortgage-related fees if banks pass compliance costs through to consumers.
Supporters argue
Supporters argue that the OCC's preemption rule strips homeowners in more than a dozen states of legally enacted consumer protections, costing them meaningful interest income on funds they are required to deposit into escrow. They contend that post-Loper Bright, courts no longer automatically defer to agency interpretations like the OCC's preemption determination, making the rule legally vulnerable — and that Congress should act proactively to restore state authority rather than leave homeowners exposed during prolonged litigation. They further argue that the CRA is the appropriate democratic check on agency overreach of this kind.
Opponents argue
Opponents argue that uniform federal preemption of state escrow laws is essential to maintaining a consistent national mortgage market, and that the OCC's rule reflects a reasonable interpretation of the National Bank Act's longstanding preemption framework. They contend that allowing a patchwork of state escrow interest mandates to apply to national banks would raise compliance costs that are ultimately passed on to borrowers through higher fees or rates, potentially offsetting any interest benefit. They further argue that the OCC conducted a deliberate rulemaking process and that Congress should allow courts — not a CRA disapproval — to resolve any legal questions about the rule's scope.
Constitutional context
The National Bank Act grants the OCC authority to charter and regulate national banks, and federal preemption of state banking laws has been upheld under the Supremacy Clause. However, post-Loper Bright v. Raimondo (2024), courts will independently assess whether the OCC's statutory authority actually supports preempting state escrow interest laws, rather than deferring to the agency's own interpretation — making the underlying rule's legal footing less certain than it would have been under Chevron.
Checks and balances
The legislative branch gains authority by nullifying an executive agency (OCC) rule; the check on Congress is the presidential veto, which can block the CRA resolution unless overridden by a two-thirds majority in both chambers.
Historical precedent
The Supreme Court addressed OCC preemption of state consumer protection laws in Cuomo v. Clearing House Association (2009), holding that the OCC could preempt state visitorial powers but not state substantive law enforcement — a distinction that informs ongoing debates about the scope of federal banking preemption.