On January 18, the Federal Reserve Board, Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corporation, Federal Housing Finance Agency, National Credit Union Administration, and Office of the Comptroller of the Currency (together, the Joint Agencies) issued a final rule amending Regulation Z to implement certain requirements from the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) that require creditors to obtain appraisals for a subset of loans called Higher-Priced Mortgage Loans (HPMLs) and to notify consumers who apply for these loans of their right to a copy of the appraisal. The requirements of this rule (the Final Rule) are effective on January 18, 2014, giving creditors a year to implement.

While the Dodd-Frank Act statutory language required these provisions to cover “higher-risk mortgage loans,” the Final Rule adopted the HPML terminology that already exists in the Truth in Lending Act (TILA) and Regulation Z. By doing so, the Joint Agencies expanded slightly the definition of HPML in two substantive ways: (i) by incorporating an additional rate threshold for jumbo loans (discussed below), and (ii) by adding the qualification that an HPML is a closed-end consumer credit transaction.

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