The Consumer Financial Protection Bureau announced Tuesday some insured depository institutions and insured credit unions will now be exempt from regulations to establish escrow accounts for some higher-priced mortgage loans.
The final rule will take effect upon publication in the Federal Register, and will exempt the HPLM escrow requirement for any mortgage made by an insured depository institution or insured credit union and secured by a first lien on the principal dwelling of a consumer if all three of the following criteria are met:
- 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
This final rule was implemented as a requirement under the Economic Growth, Regulatory Relief and Consumer Protection Act. The law, signed in 2018 by President Donald Trump, was seen as a rollback of the Dodd-Frank Act and was the administration’s attempt to bring regulatory relief to community banks across the U.S.
“Dodd-Frank’s costly regulations gave large banks a negative advantage at the cost of small banks throughout the country,” Trump said at the signing.
But this may be one of the last rollbacks the bureau sees for a while. Monday, President-elect Joe Biden announced he is nominating Rohit Chopra to lead the CFPB.
Chopra is a CFPB veteran, having previously served as assistant director, where he was the bureau’s top student loan watchdog. In 2011, the Secretary of the Treasury appointed him to serve as the CFPB’s student loan ombudsman, a new position established in the financial reform law. As one of Sen. Elizabeth Warren’s, D-Mass., first hires as she constructed the CFPB, Chopra was on the ground floor as the bureau was built.
He is expected to return the bureau to a more aggressive regulatory regime.
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