HPML Escrow Exemption Final Rule

John Zasada, Compliance Consulting Director, Financial Institutions Group

On Jan. 19, 2021, the Consumer Financial Protection Bureau (CFPB) issued a final rule on the Higher-Priced Mortgage Loan (HPML) escrow exemption. The 68-page final rule pertains to the requirement in Regulation Z that creditors must establish escrow accounts for certain HPMLs. Under the new rule, Section 1026.35(b)(2)(vi) exempts from the Regulation Z HPML escrow requirement any loan made by an insured bank or credit union, and secured by a first lien on the principal dwelling of a consumer if:

• The institution has assets of $10 billion or less
• 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
• Certain of the existing HPML escrow exemption criteria are met

The final rule is effective on the date it is published in the Federal Register.

To learn more about the exemption rules, contact Doeren Mayhew’s regulatory compliance specialists.