Kraninger signs new-year HMDA, escrow exemption threshold adjustments

Asset-size thresholds for institutions exempt from home mortgage data collection and from a requirement to establish new escrow accounts for certain high-cost mortgages were signed by the new director of the consumer financial protection agency in late December.

The threshold changes, as described in notices signed Dec. 20 by Consumer Financial Protection Bureau (CFPB) Director Kathleen (“Kathy”) Kraninger, await publication in the Federal Register. Effective upon F.R. publication, each notice provides a Jan. 1, 2019, applicability date.

The first of these revises the asset-size exemption threshold under the Home Mortgage Disclosure Act (HMDA), which the bureau implements through Regulation C. As of Jan. 1, institutions that had total assets of $46 million as of Dec. 31, 2018, are not required to collect mortgage loan and application data in 2019, according to the notice. This threshold is up $1 million from 2018.

The second notice revises the bureau’s official commentary interpreting requirements of the bureau’s Truth in Lending Act (TILA) regulation – Regulation Z. It raises the asset-size threshold for certain creditors to qualify for an exemption from the requirement to establish an escrow account for a higher-priced mortgage loan (HPML). In 2019, creditors with assets of less than $2.167 billion (including assets of certain affiliates) as of Dec. 31, 2018, are exempt from the requirement to establish new escrow accounts for HPMLs (if other Reg Z requirements are also met). This is up from the $2.112 billion threshold that applied in 2018. The new threshold amount also applies for small-creditor portfolio and balloon-payment qualified mortgages under Reg Z.

The Reg C and Reg Z threshold increases are based on growth in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which rose an average 2.6% for the 12-month period ending in November 2018.

Each rule change “is applicable on January 1, 2019, consistent with relevant statutory or regulatory provisions,” according to the notices.

Home Mortgage Disclosure (Regulation C) Adjustment to Asset-Size Exemption Threshold

Truth in Lending Act (Regulation Z) Adjustment to Asset-Size Exemption Threshold