Asset-Size Exemption Threshold Updated for 2017

Q: Has the Consumer Financial Protection Bureau Issued Final Rules Amending the Asset-Size Exemption Threshold for Regulation C and Regulation Z?

A: Yes. The Consumer Financial Protection Bureau (CFPB) has issued final rules amending the official commentary to Regulation C and Regulation Z regarding the asset-size exemption threshold based on the annual percentage change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Regarding Regulation C, for 2016, the threshold was $44 million. During the 12-month period ending in November 2016, the average of the CPI-W increased by 0.8 percent. This increase results in no change to the asset-size threshold when rounded to the nearest $1 million. Thus, the exemption threshold will remain at $44 million for 2017. Therefore, banks, savings associations, and credit unions with assets of $44 million or less as of Dec. 31, 2016, are exempt from collecting data in 2017. An institution's exemption from collecting data in 2017 does not affect its responsibility to report data it was required to collect in 2016. 

Regarding Regulation Z, during the 12-month period ending in November 2016 the average of the CPI-W increased by 0.8 percent. As a result, the exemption threshold is increased from $2.052 billion to $2.069 billion for 2017. Thus, if the creditor's assets together with the assets of its affiliates that regularly extended first-lien covered transactions during calendar year 2016 are less than $2.069 billion on Dec. 31, 2016, and it meets the other requirements of § 1026.35(b)(2)(iii), it will be exempt in 2017 from the escrow-accounts requirement for higher-priced mortgage loans and will also be exempt from the escrow-accounts requirement for higher-priced mortgage loans for purposes of any loan consummated in 2018 for which the application was received before April 1, 2018. 

The adjustment to the escrows exemption asset-size threshold will also increase the threshold for small-creditor portfolio and balloon-payment qualified mortgages under Regulation Z.

Note: The above information is not intended to provide legal advice; rather, it is intended to provide general information about banking issues. Consult your institution's attorney for special legal advice or assistance.