CFPB Adjusts Asset-Size Thresholds For Exempting Mortgage Lenders

The Consumer Financial Protection Bureau (CFPB) has lowered the asset-size threshold for exempting certain mortgage lenders from the requirement that they establish escrow accounts for higher-priced mortgage loans under Regulation Z, which implements the Truth in Lending Act (TILA).

Specifically, the threshold for 2016 will decrease from the current $2.060 billion to $2.052 billion, the CFPB says in a press release. As a result, lenders with assets of less than $2.052 billion (including assets of certain affiliates) that also meet other requirements of Regulation Z will be exempt from the requirement to establish escrow accounts for higher-priced mortgage loans.

The adjustment to the asset-size threshold will also decrease the threshold for small-creditor and balloon-payment qualified mortgages. Balloon-payment qualified mortgages that satisfy all applicable criteria are also exempt from the prohibition on balloon payments for high-cost mortgages.

The threshold was originally set in 2013 at $2 billion. Part of the CFPB’s 2013 Escrows Final Rule, it is adjusted annually based on the percentage change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers for each 12-month period ended in November and rounded to the nearest million dollars.

In addition, the bureau has issued a final rule regarding the asset-size exemption threshold for banks, savings associations and credit unions under Regulation C, which implements the Home Mortgage Disclosure Act (HMDA).

The asset-size exemption for banks, savings associations and credit unions will remain at $44 million. As a result, institutions with assets of $44 million or less as of Dec. 31, 2015, are exempt from collecting HMDA data in 2016.

The CFPB reminds that an institution’s exemption from collecting data in 2016 does not affect its responsibility to report the data it was required to collect in 2015.


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