Compliance Blog

Written by JiJi Bahhur, Regulatory Compliance Counsel

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Update - 7:45 a.m. - Yesterday evening, the Senate confirmed Richard Cordray for a full five-year term as the Director of the Consumer Financial Protection Bureau. 

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Recently, the Consumer Financial Protection Bureau (CFPB) posted a list of counties determined to be “rural” or “underserved” during 2013 for use in 2014.  Don’t mistake this list with the list posted on May 16, 2013, which was for use in 2013. 

If you aren’t familiar with the purpose of these lists, they exist because the CFPB has several rules with provisions related to mortgage loans made by creditors that during the preceding year operated predominantly in “rural” or “underserved” counties.  For instance, the TILA Escrow Rule, which took effect on June 1, 2013, requires certain creditors to create escrow accounts for a minimum of 5 years for higher-priced mortgage loans.  However, certain small creditors that operate predominantly in rural or underserved counties are exempt from this requirement.  For other examples of provisions that have a “rural” or “underserved” component, see the CFPB’s blog from July 2, 2013.

For purposes of these provisions, both “rural” and “underserved” counties are defined on an annual basis, using the USDA Economic Research Service’s urban influence codes for rural counties and data collected under the Home Mortgage Disclosure Act (HMDA) for underserved counties. Because the counties are defined on an annual basis, some counties’ status as rural or underserved may have changed between the list for use in 2013 and the recently posted list for use in 2014.  Although the CFPB has taken some steps to address this concern (also discussed in the CFPB’s blog from July 2, 2013), this may result in some small creditors losing eligibility for the exemptions they may have received the year prior. 

You can find the final list of rural and underserved counties for use in 2014 here, and the final list for use in 2013 here.