Annual adjustments to asset-size exemption thresholds under the Truth in Lending Act (TILA) in effect for certain types of mortgage activity in 2022 are detailed in a regulatory alert issued Monday by the National Credit Union Administration (NCUA).
In the alert sent over the signature of agency board Chairman Todd Harper, the agency noted that the thresholds, adjusted by the Consumer Financial Protection Bureau (CFPB), exempt certain credit unions from escrow account requirements for higher-priced mortgage loans and specific qualified mortgages (QMs) under Reg Z, TILA’s implementing rule:
Escrows and small creditor QMs
The asset-size exemption threshold has risen to $2.336 billion. Creditors with assets of less than $2.336 billion (including assets of certain affiliates) on Dec. 31, 2021, are exempt from the requirement to establish escrow accounts for higher-priced mortgage loans in 2022 if other provisions of Regulation Z are also met, the NCUA said. This threshold also applies during a grace period, in certain circumstances, with respect to transactions with applications received before April 1, 2023. The agency added that this asset-size threshold adjustment for escrow accounts also increases the threshold for small-creditor portfolio and balloon-payment QMs.
First-lien principal dwelling-secured loans
The asset-size exemption threshold has been raised to $10.473 billion. A final CFPB rule last year exempted from the Reg Z higher-priced mortgage loan 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 certain criteria are met, including an asset-size exemption threshold, the NCUA said. It said creditors with assets of $10.473 billion or less (excluding assets of certain affiliates) as of Dec. 31, 2021, meet this asset-size exemption threshold criterion for purposes of any loan consummated in 2022. This threshold also applies with respect to any loan secured by a first-lien on a principal dwelling of a consumer consummated in 2023 where the application is received before April 1, 2023.
NCUA Regulatory Alert (22-RA-03) (February 2022)