Two final rules increasing the asset-size exemption thresholds for institutions required to report mortgage activity and to establish escrows for certain higher-priced mortgage loans (HPMLs) were published this week by the Consumer Financial Protection Bureau (CFPB).
Under a revision to the bureau’s Regulation C, which implements the Home Mortgage Disclosure Act (HMDA), the exemption threshold will rise to $54 million in 2023, up from $50 million. This means that banks, savings associations, and credit unions with assets of $54 million or less as of Dec. 31, 2022, are exempt from collecting data under HMDA in 2023, the bureau said.
It said that under a revision to its official commentary (interpretation) in Regulation Z, implementing the Truth in Lending Act (Regulation Z), the exemption threshold for institutions providing certain first-lien HPMLs is adjusted to increase to $2.537 billion from $2.336 billion.
Under this adjustment, it said, creditors with assets of less than $2.537 billion (including assets of certain affiliates) as of Dec. 31, 2022, are exempt, if other requirements of Regulation Z also are met, from establishing escrow accounts for HPMLs in 2023. “This asset limit will also apply during a grace period, in certain circumstances, with respect to transactions with applications received before April 1 of 2024,” the bureau said.
For certain insured depository institutions and insured credit unions meeting certain conditions, including an asset size exemption threshold, the exemption threshold is adjusted to increase to $11.374 billion from $10.473 billion; institutions meeting the new threshold will enjoy this exemption for purposes of any loan consummated in 2023 and any loan secured by a first lien on a principal dwelling of a consumer consummated in 2024 for which the application was received before April 1, 2024.
The Reg Z revision, the bureau said, will also increase a similar threshold for small-creditor portfolio and balloon-payment qualified mortgages.
Home Mortgage Disclosure (Regulation C) Adjustment to Asset-Size Exemption Threshold
Truth in Lending Act (Regulation Z) Adjustment to Asset-Size Exemption Threshold