The CFPB on Tuesday issued two final rules, one regarding its use of supervisory guidance for its supervised institutions and another exempting certain insured depository institutions and insured credit unions from the requirement to establish escrow accounts for certain higher-priced mortgage loans (Regulation Z).
The supervisory guidance rule, which in October was unanimously approved by the NCUA Board, codifies an interagency statement on the role of supervisory guidance, issued by five federal financial regulatory agencies in September, 2018.
The 2018 interagency statement from the CFPB, Federal Reserve Board, FDIC and OCC, in addition to the NCUA, reiterated well-established law by stating that, unlike a law or regulation, supervisory guidance does not have the force and effect of law.
“Unlike a law or regulation, supervisory guidance does not have the force and effect of law and the Bureau does not take enforcement actions or issue supervisory criticisms based on non-compliance with supervisory guidance,” a CFPB press release stated. “Rather, supervisory guidance outlines supervisory expectations and priorities, or articulates views regarding appropriate practices for a given subject area.”
Also on Tuesday, the CFPB issued a final rule to implement a requirement of the Economic Growth, Regulatory Relief, and Consumer Protection Act, which exempts certain insured depository institutions and insured credit unions from the requirement to establish escrow accounts for certain higher-priced mortgage loans.
According to the CFPB, the final rule takes effect upon publication in the Federal Register and exempts from the 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; and
- certain existing HPML escrow exemption criteria are met.
The final rule on higher-priced mortgage loan escrow exemption can be accessed here.