Compliance Blog

Written by Bernadette Clair, Senior Regulatory Compliance Counsel

2014 HMDA Asset Threshold. The CFPB has issued a final rule, effective January 1, 2014, adjusting the asset-size exemption threshold for banks, savings associations, and credit unions under Regulation C, which implements the Home Mortgage Disclosure Act (HMDA).

For 2014, the exemption threshold is $43 million (up from $42 million). Banks, savings associations, and credit unions with assets of $43 million or less as of December 31, 2013, are exempt from collecting data in 2014. Note that an institution’s exemption from collecting data in 2014 does not affect its responsibility to report the data it was required to collect in 2013. The CFPB’s press release is available here.

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CARD Act Penalty Fees Safe Harbor. The CFPB also issued a final rule amending the safe harbor threshold amounts for credit card penalty fees in Regulation Z, section 1026.52(b)(1)(ii)(A) and (B).

Effective January 1, 2014, the adjusted dollar amount for the penalty fees safe harbor is $26. The safe harbor for each subsequent violation within the following six months is $37.

HOEPA Annual Threshold Adjustment. In the same final rule, the CFPB adjusted the statutory fee trigger for HOPEA loans to $632, effective January 1, 2014. Keep in mind that this adjustment applies to loans consummated on or after January 1, 2014, and will apply until the revised HOEPA fee trigger adopted in the CFPB’s 2013 HOEPA final rule takes effect on January 10, 2014. This issue is discussed in the preamble to the final rule:

“The fee trigger being adjusted in this Federal Register notice pursuant to TILA section 103(bb) is used in determining whether a loan is covered by § 1026.32. Such loans have generally been known as “HOEPA loans.” On January 10, 2013, the Bureau issued a final rule pursuant to, inter alia, section 1431 of the Dodd-Frank Act, which revised the statutory fee trigger for HOEPA loans. 78 FR 6856 (Jan. 31, 2013) (2013 HOEPA Final Rule). The amendments adopted in the 2013 HOEPA Final Rule, including the revised fee trigger, apply to loans for which the creditor received an application on or after January 10, 2014. Id. at 6939. The Bureau is mindful of the need to coordinate implementation of this final rule with the effective date of the January 10th final rule adopting revisions to the HOEPA fee trigger. Accordingly, the adjustment to the fee trigger that is being published today will become effective on January 1, 2014, will apply to loans consummated on or after January 1, 2014, and will apply until the revised HOEPA fee trigger takes effect. Pursuant to section 1431 of the Dodd Frank Act and § 1026.32(a)(1)(ii) as amended by the 2013 HOEPA Final Rule, implementation of the 2013 HOEPA Final Rule will change the HOEPA fee trigger to $1,000, which will be adjusted annually thereafter in accordance with § 1026.32(a)(1)(ii) as amended by the 2013 HOEPA Final Rule. Id. at 6968.” (My emphasis)

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Asset-Threshold for HPML Escrow Exemption.  And the last threshold of mention today: the CFPB issued a final rule effective January 1, 2014 that implements an automatic adjustment to the asset-size exemption for the TILA Higher-Priced Mortgage Loans (HPMLs) escrow account regulation. The rule requires that credit unions maintain an escrow account to cover the costs of property taxes and insurance for HPMLs for a minimum of five years. There is an exemption for certain credit unions that meet the following requirements:

• Operate in a predominantly rural or underserved area;
• The credit union retains its mortgage obligations in portfolio;
• Originated less than 500 first-lien HPMLs during the preceding calendar year; and
• Do not exceed the asset-size threshold set by the CFPB

This final rule will determine which entities qualify for this exemption for 2014. The CFPB is increasing the asset-size threshold by 1.4%, from $2 billion to $2.028 billion. Credit unions that originated fewer than 500 first-lien HMPLs and whose assets were $2.028 billion or below as of December 31, 2013 will be exempt from the TILA escrow requirement for HPMLs. The CFPB’s press release is available here.

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