On October 23, 2026, a coalition of 10 state attorneys general (AG) filed a motion requesting that the U.S. District Court for the District of Oregon reject an attempt by the Office of the Comptroller of the Currency (OCC) to stay the states’ challenge to the OCC’s new interest-on-escrow preemption rules in State of Oregon et al. v. OCC et al.

As previously discussed, on May 15, 2026, the OCC issued two rules addressing mortgage escrow accounts and federal preemption. The first rule, Real Estate Lending Escrow Accounts, amended OCC regulations for national banks and federal savings associations to codify their authority to establish and maintain real estate lending escrow accounts and to exercise business judgment over the terms of those accounts, including whether to pay interest on escrow balances and to charge related fees. The second rule, Preemption Determination: State Interest‑on‑Escrow Laws, provides that federal law preempts state laws that restrict OCC‑regulated banks’ flexibility to decide whether to pay interest on escrow balances or assess related fees. When issuing this rule, the OCC identified several state interest-on-escrow laws that, according to the OCC, deprive national banks of the flexibility to exercise the authority and discretion permitted by federal law and which are therefore preempted by federal law.

On August 11, 2026, the AGs of California, Connecticut, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, and Vermont, all of which have their own interest-on-escrow laws, filed a complaint in federal court alleging that the OCC’s escrow-preemption rules are unlawful and asking the court to set the rules aside under the Administrative Procedure Act. Specifically, the complaint claims that the rules exceed the OCC’s statutory authority and are arbitrary and capricious, and that the OCC failed to comply with procedural requirements in promulgating the rules. The states also argue that the Dodd-Frank Act requires federal preemption determinations to satisfy the Barnett Bank “significant interference” standard based on case-specific assessments that are supported by substantial evidence, but that the OCC’s rules do not meet this standard. The OCC moved to dismiss or transfer the case on October 5, 2026, and several days later moved to stay all aspects of the case, other than its motion to dismiss or transfer, pending the Supreme Court’s handling of three petitions for certiorari that involve private suits against banks and the validity of state interest-on-escrow laws.

In the states’ recent opposition to the OCC’s motion to stay, they argue that the OCC has not met the standard for a stay pursuant to the three-factor test set forth in Landis v. North American Co., 299 U.S. 248 (1936), as articulated by the Ninth Circuit in Lockyer v. Mirant Corp., 398 F.3d 1098 (9th Cir. 2005). The test requires courts to weigh whether (1) a stay would simplify or complicate the issues involved in the case, (2) a stay could cause damage to a party or to a nonparty, and (3) allowing the case to proceed would cause hardship or inequity to the party requesting the stay.

On the first factor, the states contend that a decision by the Supreme Court in the private lawsuits would not resolve or otherwise simplify their challenge to the OCC’s rules because those cases involve private contract and unjust enrichment claims and preemption as a defense, but do not test the validity of the OCC’s rules or the OCC’s compliance with the requirements under the Dodd-Frank Act. In addition, the states note that those cases only involve the interest-on-escrow laws of three of the 10 states involved in their case against the OCC. Finally, the states argue that the OCC’s claim that a stay is warranted pending the resolution of those cases depends on a “nested series of contingencies that may never occur,” including that the Supreme Court grants certiorari and that it decides the parties’ substantive preemption questions. On the second factor, the states argue that a stay would cause them substantial and indefinite harm due to their inability to enforce their own statutes. They also argue a stay will harm consumers since they will not receive interest on their escrow balances. Regarding the third factor, the states argue that allowing the case to move forward will not cause hardship to the OCC, as the only potential burden that the OCC identified in support of a stay is the cost of producing the administrative record and briefing the merits, which the Ninth Circuit has held is not a “clear case of hardship or inequity.” The states further note that both sides have agreed that no discovery beyond the administrative record is needed for the case to proceed, and that the OCC’s request to stay everything but its own motion to dismiss or transfer is one-sided and inequitable.

Any reply by the OCC to the states’ opposition is due by November 6, and the court will likely resolve the OCC’s motion for a stay and the OCC’s motion to dismiss or transfer (which the states have opposed in a separate filing) in late November. Meanwhile, there is no timeline regarding whether the Supreme Court will grant the petitions for certiorari for the private interest-on-escrow cases described above. The Supreme Court has invited the solicitor general to weigh in on whether certiorari should be granted in those cases, but it did not provide a deadline by which the solicitor general must do so.

A decision by the court to stay the challenge to the OCC’s rules will likely mean that the rules will remain in effect for the foreseeable future, thereby preventing states from enforcing their own interest-on-escrow laws against national banks and federal savings associations. On the other hand, if the court rejects the motion to stay, a substantive decision regarding whether the OCC’s rules will remain in place could be issued within the next few months.

Troutman Pepper Locke State Attorneys General Team

	Ashley Taylor – Co-leader and Firm Vice Chair Ashley is co-leader of the firm’s nationally ranked State Attorneys General practice, vice chair of the firm, and a partner in its Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. He helps his clients navigate the complexities involved with multistate attorneys general investigations and enforcement actions, federal agency actions, and accompanying litigation.
	Clay Friedman – Co-leader Clay co-leads the firm’s State Attorneys General practice and is nationally ranked by Chambers USA for AG Government Relations and in Best Lawyers for Advertising Law. He has dedicated his entire career to state attorney general and federal work, serving for nearly a decade in a senior role and more than 25+ years in private practice. Clay focuses his practice on helping industry-leading companies mitigate the risks associated with state and federal regulatory investigations and associated litigation.
	Chris Carlson Chris advises clients on regulatory, civil, and criminal investigations and litigation. With a background as an assistant attorney general, he provides practical guidance to clients with matters involving state attorneys general and federal regulatory agencies.
	Lauren Fincher Lauren has vast experience handling state attorneys general investigations, navigating complex regulatory compliance matters, and providing strategic counsel in enforcement actions across various industries. She helps clients manage high-stakes regulatory matters and guides them through complex legal landscapes.
	Stephen Piepgrass Stephen leads the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, representing clients in single and multistate enforcement actions, including inquiries and investigations involving state attorneys general and other state and federal governmental enforcement bodies including the CFPB and FTC. He regularly represents clients in highly regulated sectors such as financial services, emerging technologies, health care, insurance, and education.
	Michael Yaghi Mike handles high-profile investigations led by state attorneys general, the FTC, and other federal and state regulatory bodies. He assists clients through these complex government inquiries, assisting them throughout the entire life cycle of investigations, from regulatory enforcement through formal litigation.
	Matthew J. Berns Drawing on his experience in senior leadership roles in the New Jersey Attorney General’s and Governor’s Offices and as a trial attorney for the U.S. Department of Justice, Matt provides an insider’s perspective when guiding clients through complex government investigations, litigation, and other actions.
	Reade Jacob Reade counsels gaming companies, financial institutions, fintech and social media platforms, and other commercial clients on regulatory, enforcement, and compliance matters spanning three core areas: gaming and sports betting, consumer protection, and privacy and data security. His gaming practice covers daily fantasy sports investigations, state wagering licensure, social casino litigation, and federal and state gambling compliance. On the consumer protection side, he has represented clients before the CFPB, FTC, and state AGs, negotiating settlements and consent orders, and litigating high-stakes matters in administrative courts and arbitration proceedings.
	Jeff Johnson Jeff helps clients navigate complex regulatory and litigation challenges with local, state, and federal authorities. His clients benefit from his decade of broad litigation experience, understanding of emerging state and federal regulatory issues, and strong relationships with attorneys general across the U.S. In addition to handling cases from trial through state or federal appeals, Jeff serves as amicus counsel in advancing legal rules to support his clients’ vital interests.
	Jay Myers Jay assists clients in heavily regulated industries, including health care, energy, insurance, emerging industries, and data privacy. He provides both regulatory legal advice and government relations strategies. Jay’s past and current clients include Fortune 10 companies, startups, nonprofits, industry associations, and advocacy groups. Recognizing that state government matters are often complex and multifaceted, he utilizes regulatory guidance, government advocacy, or both in tandem to deliver tailored solutions for each client’s unique needs.
	Zoe Schloss Zoe represents clients in litigation and government investigations. As former deputy attorney general for the Delaware Department of Justice, she is an experienced litigator who understands the enforcement priorities that impact her clients. Zoe works with individuals and corporate entities in highly regulated industries, including financial services, health care, and energy.
	Jessica Birdsong Jessica is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, magna cum laude, where she served as associate articles editor of the Journal of Law & Technology.
	Sydney Goldberg Sydney is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group. She advises clients on regulatory compliance and state attorney general (AG) investigations in highly regulated industries, including health care and life sciences. She routinely helps clients navigate alcohol compliance and licensing issues, helping proactively manage regulatory risk.
	Troy Homesley Troy is an accomplished litigator who has represented and defended clients across a wide range of complex, high-stakes disputes at both the trial and appellate levels. He has represented technology companies, business executives, law firms, investment funds, high-ranking federal officials, international non-profits, and asylum seekers. Troy draws on his broad litigation experience to advise clients before litigation arises, while claims are pending or threatened, and leading up to and through trial and appeals.
	Namrata Kang Namrata (Nam) is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, based in the Washington, D.C. office. She routinely advises clients on a wide variety of state and federal regulatory matters, with a particular emphasis on state consumer protection laws relating to consumer financial services and marketing and advertising. Nam’s experience transcends multiple industries, including financial services, telecommunications, media, and sports betting.
	Michael Lafleur Michael is an associate in the firm’s Regulatory Investigations, Strategy, and Enforcement Practice Group. Based out of the firm’s Boston office, Mike has deep experience in litigation, investigations, and other regulatory matters involving state-level regulators and state attorneys general.
	William LaRosa Bill represents clients in complex regulatory investigations, state attorneys general matters, and enforcement proceedings. He draws on his experience as a former assistant U.S. attorney and as a private-sector litigator advising corporations in high-stakes litigation and regulatory investigations, including multistate AG investigations.
	Lane Page Lane represents financial institutions and other clients in federal and state regulatory investigations and complex civil litigation. He is particularly focused on consumer protection and fair lending issues.
	Dascher Pasco Dascher provides strategic counsel and representation to clients navigating regulatory compliance, enforcement, and high-stakes litigation. She regularly represents clients in both single and multistate state attorney general (AG) investigations and enforcement actions, as well as before other state enforcement bodies and local government agencies.
	Kyara Rivera Rivera Kyara is an associate in the firm’s Regulatory Investigations, Strategy + Enforcement Practice Group. She received her J.D. from the University of Richmond School of Law, cum laude, where she served as publications and online editor of the Public Interest Law Review.
	Timothy Shyu Timothy advises clients on regulatory compliance and enforcement in highly regulated industries, including health care and life sciences, data privacy and cybersecurity, and emerging technology. He assists companies in navigating complex investigations and enforcement actions, helping them mitigate regulatory risk proactively.
	Trey Smith Trey focuses his practice on representing and advising regulated utilities before state public utility commissions. He routinely helps clients obtain certificates of public convenience and necessity for transmission infrastructure. In this role, Trey works with his clients’ subject-matter experts to manage administrative proceedings, including by preparing initial filings; responding to discovery requests; drafting rebuttal testimony; and litigating any disputed issues.
	Daniel Waltz Dan helps clients navigate all aspects highly regulated relationships between industry participants and federal, state and local governments. Whether engaging with regulators, negotiating transactions or representing clients in the courtroom, he delivers solutions that help his clients achieve their strategic goals.
	Stephanie Kozol Stephanie is Troutman Pepper Locke’s senior government relations manager in the state attorneys general department.