Office of the Commissioner of Financial Regulation


Advisory: Maryland-Chartered Financial Institutions and Other Institutions – Interest on Escrow Accounts - February 10, 2014


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This Advisory addresses banks, savings banks and savings and loan associations doing business in Maryland (collectively "Banks") that are subject to §12-109 and §12-1026 of the Commercial Law Article of the Annotated Code of Maryland ("Statute").


The Maryland Commissioner of Financial Regulation ("Commissioner") issues this Advisory to provide guidance to the Banks during the pendency of an amendment to the Statute.


The Statute requires Banks who lend money secured by a first lien deed of trust or mortgage on residential real property ("Residential Loan") that create or are assignees of escrow accounts associated with Residential Loans, to pay interest to the borrowers on the funds in the escrow accounts at an annual rate not less than the 6-month average dealer bid rate on nationally traded certificates of deposit, as published by the Federal Reserve in "Selected Interest Rates (Daily) – H.15" ("6-Month CD"), as of the first business day of the calendar year.

As of the release on December 16, 2013, the Federal Reserve ceased publication of the 6-Month CD rate. Legislation to amend the Statute by substituting another index is currently pending in the 2014 General Assembly session (HB 735 and SB 583).

Commissioner’s Statement

Until the General Assembly concludes its session and the amendment goes into effect, the Commissioner hereby advises Banks to continue to pay interest at an annual rate not less than the 6-Month CD published in the Selected Interest Rates (Daily) – H.15 on January 2, 2013.