Dear Boards of Directors and Chief Executive Officers:
Last month, the Consumer Financial Protection Bureau (CFPB) published annual adjustments for exemption thresholds under the Home Mortgage Disclosure Act (Regulation C) and the Truth in Lending Act (Regulation Z). The asset-size thresholds exempt certain credit unions from data collection under Regulation C and from escrow account requirements for higher-priced mortgage loans and specific qualified mortgages under Regulation Z. The CFPB also published an annual adjustment to the maximum amount consumer reporting agencies may charge consumers for making a file disclosure to a consumer under Regulation V.1
The three adjustments became effective on January 1, 2021.
Regulation C Data Collection Asset-Size Exemption Threshold
The exemption threshold for 2021 (opens new window) increased to $48 million based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) in effect through November 30, 2020. Credit unions with assets of $48 million or less as of December 31, 2020, therefore, are exempt from collecting HMDA data in 2021.
Regulation Z Escrows and Small Creditor QMs Asset-Size Exemption Threshold
The exemption threshold for 2021 increased to $2.230 billion, based on the CPI-W in effect through November 30, 2020. Lenders with assets of less than $2.230 billion (including assets of certain affiliates) as of December 31, 2020 are exempt if other provisions of Regulation Z also are met, from the requirement to establish escrow accounts for higher-priced mortgage loans in 2021. This asset-size limit also applies during a grace period, in certain circumstances, with respect to transactions with applications received before April 1, 2022.
The adjustment to the asset-size exemption threshold (opens new window) for escrow accounts also increases the threshold for small creditor portfolio and balloon-payment qualified mortgages. A balloon-payment qualified mortgage that satisfies all applicable criteria, including having been made by a lender that, together with certain affiliates, has total assets below the threshold, is also exempted from the prohibition on balloon payments for high-cost mortgages.
Regulation V Credit Bureau Consumer Report Fee Ceiling
The ceiling on the allowable amount (opens new window) a consumer reporting agency may charge for a consumer report in 2021 increased to $13.00, based proportionally on changes in the Consumer Price Index for All Urban Consumers (CPI-U). Section 612(f)(1)(A) of the Fair Credit Reporting Act (FCRA) provides that a consumer reporting agency may charge a consumer a reasonable amount for making a disclosure to the consumer of the information in their file — commonly referred to as a credit report — pursuant to section 609 of the FCRA.
The ceiling does not affect the amount a credit union may charge its members or potential members, directly or indirectly, for obtaining a credit report in the normal course of business.2 Such cost is expected to be accurately represented in all advertising, disclosures, or agreements, whether written or oral.
If you have questions about the information in this Regulatory Alert, please contact the NCUA’s Office of Consumer Financial Protection at 703.518.1140 or ComplianceMail@ncua.gov. You can also contact your NCUA regional office or your state supervisory authority.
Todd M. Harper
2 A federal credit union may, consistent with NCUA rules and regulations, other federal law, and its contractual obligations, determine the types of fees or charges and other matters affecting the opening, maintaining and closing of a share, share draft or share certificate account. 12 C.F.R. 701.35(c). A federal credit union’s loans and lines of credit (including credit cards) to members are regulated by 12 C.F.R. 701.21. Applicability of state law concerning charges imposed in credit transactions should be determined according to the preemption standards of the relevant federal law and regulations. 12 C.F.R. 701.21(b)(3).