On November 6, 2026, the Office of the Comptroller of the Currency (OCC) has filed a reply brief renewing its request to stay most proceedings in the multistate lawsuit challenging the OCC’s determination that the National Bank Act (NBA) preempts certain state laws requiring interest to be paid on mortgage escrow accounts. The OCC argues that three pending proceedings before the U.S. Supreme Court could materially affect the legal issues presented in the litigation and that proceeding with the merits now would risk unnecessary expenditures of judicial and agency resources.

The OCC’s November 6 reply responds to the ten States’ opposition to the OCC’s motion for a partial stay. As discussed in our earlier coverage, the States oppose delaying their challenge to the OCC’s preemption determination and contend that the Supreme Court proceedings will not resolve all of their Administrative Procedure Act (APA) claims.

The litigation, pending in the U.S. District Court for the District of Oregon, challenges the OCC’s May 19, 2026 preemption determination concerning state interest-on-escrow laws. The OCC has also moved to dismiss the States’ complaint or, alternatively, transfer the case. The OCC’s request for a partial stay would permit proceedings necessary to resolve the dismissal and transfer issues to continue while pausing the remainder of the litigation.

OCC argues Supreme Court proceedings could affect both substantive and procedural APA claims

The OCC’s stay request is premised on three pending Supreme Court proceedings: Citizens Bank, N.A. v. Conti, No. 25-1004, Cantero v. Bank of America, N.A., No. 25-1313; and Flagstar Bank, N.A. v. Kivett, No. 25-1350.

Each proceeding concerns the application of the NBA preemption standard established in Barnett Bank of Marion County, N.A. v. Nelson and subsequently addressed by the Supreme Court in Cantero v. Bank of America, N.A. (2024).

The OCC emphasizes that these proceedings do not merely involve private disputes between banks and borrowers. Rather, the petitions present the question whether the NBA preempts state interest-on-escrow laws. The OCC points out that the Supreme Court has requested the views of the Solicitor General in all three proceedings, which, in the OCC’s view, demonstrates that the Court is seriously considering whether to grant certiorari.

The OCC also rejects the States’ argument that the Supreme Court proceedings concern only the particular state laws involved in those cases. It contends that a Supreme Court decision addressing the preemption of California, New York, or Rhode Island’s interest-on-escrow law would necessarily inform the preemption analysis applicable to the other States’ laws.

Importantly, the OCC argues that the potential impact extends beyond the States’ substantive preemption claims. The States have asserted that the OCC’s preemption determination violates Dodd-Frank’s requirements that preemption determinations be made on a case-by-case basis and supported by substantial evidence.

According to the OCC, those procedural requirements are rooted in the application of the Barnett Bank standard. Consequently, the OCC maintains that the Supreme Court’s clarification of that standard could affect the district court’s evaluation of whether the OCC complied with Dodd-Frank, including whether its determination was arbitrary and capricious.

The OCC argues that even if the Supreme Court’s eventual decision does not resolve every APA claim, it could narrow the issues requiring judicial consideration and make proceeding with the merits before that decision inefficient.

OCC disputes the States’ contention that a stay would cause undue delay

The States also argue that the requested stay could be lengthy and potentially indefinite, particularly because it is uncertain when the Supreme Court will act on the pending petitions and whether it will grant certiorari.

The OCC responds that this is not a request for an indefinite stay based on speculative future litigation. The three certiorari petitions have already been filed and fully briefed, and the Supreme Court has requested the views of the Solicitor General. The OCC maintains that these circumstances make the requested stay materially different from stays premised on proceedings that may never occur.

The OCC also argues that the States have not identified meaningful prejudice from waiting. It notes that the States have not sought emergency relief and have not alleged that any national bank is currently failing to pay interest on escrow accounts in violation of applicable state law.

The OCC further disputes the States’ characterization of its preemption determination as predicting that national banks will stop paying interest on escrow accounts. The OCC explains that its statement that the determination could result in reduced expenditures by OCC-supervised institutions was simply an observation that institutions might elect not to pay interest once they have greater certainty concerning preemption. The OCC emphasizes that the determination leaves the decision whether to pay interest, and how much to pay, to individual banks’ business judgment.

The OCC also challenges the States’ reliance on potential financial harm to their citizens. It argues that the States have acknowledged that they are not bringing the action on behalf of their citizens and therefore cannot rely on alleged financial injuries to nonparties to establish prejudice from a stay. The OCC adds that the States have not presented allegations or evidence demonstrating that such financial harm has actually occurred.

OCC renews its standing argument

An especially significant aspect of the reply is the OCC’s effort to connect the stay request to its pending motion to dismiss.

The OCC argues that a Supreme Court decision finding that the NBA itself preempts one or more of the challenged state interest-on-escrow laws could undermine the States’ ability to establish that their asserted injuries are fairly traceable to the OCC’s preemption determination.

In other words, if the Supreme Court determines that federal law independently preempts the relevant state requirements, the OCC contends that the States may be unable to demonstrate that the OCC caused the injuries they claim.

The OCC also reiterates its contention that the States have not alleged that national banks are actually failing to comply with their interest-on-escrow laws. This argument is part of the OCC’s broader challenge to the States’ standing and ripeness, which the OCC has presented in its motion to dismiss.

The OCC thus views the Supreme Court proceedings as potentially affecting not only the merits of the States’ challenge but also threshold questions concerning whether the States can maintain the litigation at all.

OCC asks court to proceed with threshold motions but stay the merits

The OCC is not asking the district court to halt the entire case. Its proposed stay would allow the court to resolve the OCC’s pending motion to dismiss or, alternatively, transfer venue. Those motions raise threshold issues that, according to the OCC, could independently dispose of the litigation.

The OCC proposes that the parties submit a joint status report within one week after the Supreme Court proceedings are resolved.

In closing, the OCC argues that the balance of judicial economy, potential hardship, and prejudice strongly favors its requested relief. It maintains that requiring the parties to proceed with summary judgment briefing before the Supreme Court clarifies the applicable preemption standard could result in substantial unnecessary work for both the parties and the court.

What happens next?

The district court must now decide whether to grant the OCC’s request for a partial stay, something which it expects to do by November 20. That decision will determine whether the States can continue pursuing the merits of their challenge while the Supreme Court considers the three interest-on-escrow preemption petitions.

The competing positions present an important procedural question with potentially significant consequences for the OCC’s defense of its preemption determination. The States want judicial review of the OCC’s actions to proceed without waiting for the Supreme Court. The OCC, by contrast, argues that the Supreme Court’s consideration of the same fundamental preemption standard makes proceeding with the merits premature and potentially wasteful.

We will continue to follow this litigation, including the district court’s rulings on the OCC’s pending motions to dismiss, transfer venue, and stay proceedings.