CFPB Amends Asset-Size Exemption under TILA and Home Mortgage Disclosure Act


The CFPB announced an increase to the asset-size exemption threshold for its rule requiring escrow accounts for higher-cost mortgage loans under Regulation Z, the implementing Regulation for the Truth in Lending Act. The asset-size threshold for eligibility for an exemption under Regulation Z increased to $2.028 billion for 2014 from $2 billion in 2013. TILA requires that an escrow account be established by a creditor to pay for property taxes and insurance premiums for certain higher-priced mortgage loan transactions. However, an institution is exempt from this requirement if it meets certain requirements, including any asset-size threshold established by the CFPB. The increase to the asset-size exemption threshold also increases the threshold for small-creditor and balloon payment qualified mortgages. The CFPB also increased the asset-size exemption threshold from $42 million to $43 million under Regulation C, the implementing regulation for the Home Mortgage Disclosure Act. HMDA requires mortgage lenders in metropolitan areas to collect data about their housing-related lending activity and annually report the data to their federal regulator. The increase to the asset-size exemption under both TILA and HMDA is tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers. Institutions meeting asset-size limitations are exempt from these requirements under TILA and HMDA.

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this informational piece (including any attachments) is not intended or written to be used, and may not be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

Topics:  CFPB, HMDA, Mortgages, Regulation Z, TILA

Published In: Consumer Protection Updates, Finance & Banking Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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