Alert January 07, 2014

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.