Alert April 30, 2013

CFPB Releases Small Entity Compliance Guide for Escrow Rule

The CFPB released a compliance guide to assist small creditors and their business partners in implementing the escrow rule finalized by the CFPB in January (see January 22, 2013 Alert). The escrow rule, which goes into effect June 1, 2013, is designed to ensure that consumers set aside funds to pay property taxes and other expenses, by lengthening the time creditors must collect and manage escrows for higher-priced mortgage loans. Similar to the compliance guide for small creditors on the ability-to-repay and qualified mortgage rules (see April 16, 2013 Alert), this guide is intended to be an "easy-to-use summary" of the escrow rule and highlights issues that small creditors may face when implementing the rule.