Maine Bulletin 76 Amended: Interest on Escrow Accounts Benchmark Rate Changed

ME BFI Bulletins

Published April 27th, 2022

Detected March 18th, 2026

Summary

The Maine Bureau of Financial Institutions has amended Bulletin 76 to reflect a statutory change in the benchmark interest rate for escrow accounts on owner-occupied residential properties. The new benchmark is the 1-year Treasury Bill secondary market rate, effective for calendar year 2023.

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What changed

The Maine Bureau of Financial Institutions has amended Bulletin 76, updating the benchmark interest rate calculation for interest paid on escrow accounts for mortgages secured by owner-occupied residential property. This change is driven by an amendment to 9-B M.R.S. § 429, which shifts the benchmark from the 1-year Treasury Note rate to the 1-year Treasury Bill secondary market rate. Mortgagees are required to use this new benchmark beginning in calendar year 2023.

Financial institutions acting as mortgagees must update their systems and processes to reflect the new benchmark rate for calculating interest on escrow accounts starting in 2023. The bulletin provides resources for identifying the correct rate, including the Federal Reserve's H.15 release and the Bureau's own website, where the index value will be posted annually in January. Compliance with this updated rate is mandatory for the specified loan types.

What to do next

Update interest calculation methodology for escrow accounts to use the 1-year Treasury Bill secondary market rate.
Ensure new benchmark rate is applied for calendar year 2023.
Monitor the Bureau of Financial Institutions' website for the annual posting of the index value each January.

Source document (simplified)

BUREAU OF FINANCIAL INSTITUTIONS Department of Professional and Financial Regulation State of Maine April 27, 2022 Bulletin #76 Interest on Escrow Accounts To the CEO Addressed: The Bureau of Financial Institutions is amending Bulletin #76 as a result of an amendment to 9-B M.R.S. § 429, as enacted by P.L. 2021 c. 508 (emergency, effective March 16, 2022) that changed the benchmark escrow rate from a 1- year Treasury Note rate to a 1- year Treasury Bill secondary market rate. Mortgagees should use the new benchmark beginning in calendar year 2023. The statute requires interest to be paid on escrow accounts held for loans secured by mortgages on owner-occupied residential property, and that the mortgagee pay interest on a mandatory escrow account of not less than "50% of the 1-year Treasury Bill secondary market rate or rate of a comparable instrument if the 1-year Treasury Bill is not offered, as published electronically by the Federal Reserve System or in a financial newspaper of national circulation, as of the first business day of the year in which the quarterly interest or dividend is paid. The dividends or interest paid under this subsection may not be reduced by any charge for service or maintenance of the account.” The 1- year Treasury Bill rate (secondary market) as of the first business day of the calendar year is reported by the Federal Reserve System on its website at: https://www.federalreserve.gov/releases/h15/. That index value will also be posted annually on the Bureau of Financial Institution’s website each January at: https://www.maine.gov/pfr/financialinstitutions/. If you have any questions regarding this Bulletin, please contact the Bureau. This Bulletin replaces Bulletin # 76, issued January 4, 2008 /S/ Lloyd P. LaFountain, III Superintendent NOTE: This bulletin is intended solely for informational purposes. It is not intended to set forth legal rights, duties or privileges nor is it intended to provide legal advice. Readers are encouraged to consult applicable statutes and regulations and to contact the Bureau of Financial Institutions if additional information is needed.