Attorney General William Tong and a coalition of 10 attorneys general filed a lawsuit challenging a new OCC rule that preempts state laws requiring national banks to pay interest on homeowners' mortgage escrow accounts. The lawsuit argues the OCC ignored federal court decisions and bypassed safeguards, and seeks to block the rule.
The coalition seeks to block the OCC rule and preserve state authority to require interest payments on mortgage escrow accounts.
In-house counsel for financial institutions should review mortgage servicing agreements and escrow account provisions to assess reliance on federal preemption of state interest-on-escrow requirements. They should also review vendor contracts with national banks for clauses related to regulatory compliance and changes in law, and consider whether state escrow interest laws apply to their operations. If the lawsuit succeeds, banks may need to implement systems to track and pay interest on escrow accounts, so contracts with loan servicers should allocate responsibility for such payments and compliance.
Entity
Office of the Comptroller of the Currency
Industry
Financial ServicesOfficial Press Release
https://portal.ct.gov/ag/press-releases/2026-press-releases/attorney-general-william-tong-sues-to-block-lawless-handout-to-big-banks
states escrow interest complaint.pdf?rev=625aec749a9a4eb3b51
https://portal.ct.gov/-/media/ag/press_releases/2026/states-escrow-interest-complaint.pdf?rev=625aec749a9a4eb3b519a52084939f83&hash=A843E9E4F04B3A3690D8F53434E570C9
Connecticut Attorney General Enforcement Page
https://portal.ct.gov/AG/Privacy/Privacy-Resources
"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."
"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."
"Attorney General William Tong and a coalition of 10 attorneys general filed a lawsuit today opposing a new rule"
Nine state attorneys general, led by New York AG Letitia James, sued the U.S. Office of the Comptroller of the Currency (OCC) to stop two rules that preempt state laws requiring banks to pay interest on escrow accounts. The coalition argues the rules exceed OCC's authority under Dodd-Frank and the Administrative Procedure Act. The suit seeks a court order declaring the rules illegal and preventing their implementation.
Oregon Attorney General Dan Rayfield co-led a coalition of 10 states in a federal lawsuit against the Office of the Comptroller of the Currency (OCC) to block a rule that invalidates state laws requiring mortgage lenders to pay interest on escrow accounts. The lawsuit argues the OCC's rule oversteps federal authority, gives national banks a competitive advantage over state-chartered banks, and takes money away from homeowners.
$625K
Connecticut reached a $625,000 settlement with Frontier Communications Parent Inc. over an April 2024 breach in which compromised employee and vendor credentials were used to access internal systems and exfiltrate unencrypted personal information of 58,841 Connecticut residents. The settlement requires Frontier to strengthen its security program, implement specific safeguards and training, and obtain an independent third-party assessment.
$2.6M
Connecticut and New York found that Boston Children’s Health Physicians and its security vendor, XTIUM, failed to use reasonable safeguards, resulting in hackers accessing sensitive personal, medical, and employee information. The companies agreed to pay penalties totaling $2.64 million and implement enhanced cybersecurity measures.
Connecticut joined a coalition of state attorneys general filing a notice in Character Technologies, Inc.’s bankruptcy proceedings, raising concerns about the company’s safety and privacy practices and the sensitive information it holds. The states seek protections for children and consumers if the company’s business or assets are sold or transferred; the filing does not impose a fine or other remedy.
Attorney General William Tong and Consumer Counsel Claire Coleman petitioned PURA to review how Connecticut public utilities use artificial intelligence, citing potential data privacy and cybersecurity risks, algorithmic errors, and misleading outputs. The petition asks PURA to examine utility AI systems, safeguards, vendors, and data security practices; it does not report a finding of violation or an imposed penalty.