WASHINGTON– The Consumer Financial Protection Bureau has issued a notice of proposed rulemaking (NPRM) that would amend Regulation Z to provide a new exemption available to certain insured depository institutions and insured credit unions from the requirement to establish escrow accounts for certain higher-priced mortgage loans (HPMLs).
In issuing the NPRM, the Bureau said it has commenced its last mandatory rulemaking to implement the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA).
“In general, HPMLs are closed-end consumer credit transactions secured by the consumer’s principal dwelling with an annual percentage rate that exceeds the average prime offer rate for a comparable transaction by specific amounts as of the date the interest rate is set,” the CFPB said. “For the most part, first-lien HPMLs must have escrow accounts.”
According to the Bureau, the proposed amendment generally would exempt from the Regulation Z HPML escrow requirement any loan made by an insured depository institution or insured 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 other criteria are met. The proposed amendment would further the goals EGRRCPA by reducing costs associated with escrow requirements
To read the NPRM click here.
Separately, the Bureau and the Office of the Comptroller of the Currency announced they will host joint, virtual Innovation Office Hours, July 29-30, as part of the American Consumer Financial Innovation Network (ACFIN).
Participants will have the opportunity to discuss issues that touch upon both consumer protection and prudential regulation, the CFPB said.
Office Hours are one-on-one meetings with representatives from the OCC and CFPB Offices of Innovation to discuss financial technology (fintech), new products or services, partnering with a bank or fintech company, or other matters related to responsible innovation in financial services. Each meeting will last no longer than one hour, the Bureau said.
Interested parties should request a virtual office hours session by July 17, 2020, and are asked to provide information on the topic(s) they are interested in discussing with the Offices of Innovation. Specific meeting times and arrangements will be determined after the OCC and CFPB receive and accept the request.