The Consumer Financial Protection Bureau (CFPB) recently issued its final rule increasing the asset exemption threshold under the Home Mortgage Disclosure Act (HMDA) and a final rule increasing the asset exemption threshold for the Truth in Lending Act (TILA) requirement to maintain an escrow account for a higher-priced mortgage loan (HPML).
The final rule increases the asset threshold for 2023 HMDA data collection and reporting from $50 million to $54 million. However, banks, savings associations, and credit unions with assets of $54 million or less as of December 31, 2022, are exempt from the collecting and reporting of data for 2023.
Regulation Z generally requires creditors to maintain an escrow account for the payment of taxes and insurance on a first lien HPML. There are creditor-based exemptions to the escrow account requirement. The final rule reflects updates to the exemption from the escrow requirement in the TILA for creditors that, together with their affiliates that regularly extended covered transactions secured by first liens, had total assets of less than $2 billion (adjusted annually for inflation). The final rule increases the asset threshold for 2023 from $2.334 billion to $2.537 billion. So, if a creditor’s assets, together with the assets of its applicable affiliates, are less than $2.537 billion on December 31, 2022, and the creditor satisfies the additional criteria, the creditor will be exempt from the escrow account requirement for HPMLs in 2023.
Additionally, the Economic Growth, Regulatory Relief, and Consumer Protection Act required the CFPB to add an additional exemption from the HPML escrow account requirements for insured depository institutions and insured credit unions. The additional exemption applies to insured depository institutions and insured credit unions with assets at or below a certain threshold that also meet additional criteria. The final rule increases the asset threshold for 2023 from $10.473 billion to $11.374 billion. So, if an insured depository institutions or insured credit union’s assets are $11.374 billion or less on December 31, 2022, and the entity satisfies the additional criteria, the entity will be exempt from the escrow account requirement for HPMLs in 2023.
To view the final rules in their entirety, please visit the links below.