CFPB Adjusts HPML Asset Exemption Threshold

The CFPB recently issued a final rule increasing the asset exemption threshold for the Truth in Lending Act (TILA) requirement to maintain an escrow account for a higher-priced mortgage loan (HPML).

Regulation Z, which implements the TILA, generally requires creditors to maintain an escrow account for the payment of taxes and insurance on a first lien HPML. There are two creditor-based exemptions to the escrow account requirement. The original exemption is for creditors with assets below a certain threshold that also meet additional criteria, which include (among other criteria) extending a first lien loan subject to the Regulation Z ability to repay rule (a "covered loan") in a rural or underserved area and having a covered loan volume, with affiliates, at or below a certain level. The asset threshold is subject to annual adjustment based on inflation. For purposes of the asset threshold, a creditor's assets include the assets of any affiliate that regularly