CFPB Finalizes Exemption from Escrow Requirements for HPMLs

The Consumer Financial Protection Bureau today finalized a rule exempting certain higher-priced mortgage loans from a requirement under Regulation Z to establish escrow accounts for those loans, as required by the S. 2155 regulatory reform law. The rule takes effect upon publication in the Federal Register, and provides a transition period of 120 days.

Under the final rule—which ABA supported—HPMLs made by an insured depository institution or credit union would be exempt from the Reg Z escrow requirement if the institution had assets of $10 billion or less, if the institution and its affiliates originated 1,000 or fewer loans secured by a first lien on a principal dwelling during the preceding calendar year and if certain other criteria are met.