CFPB Issues Clarification of Escrows Rule
by: Marissa Aquila Blundell, Esq.
On May 16, 2013, the Consumer Financial Protection Bureau (CFPB) published clarifying and technical amendments to its Escrow Requirements under the Truth in Lending Act (Escrows Rule) which takes effect on June 1, 2013.
- Creditors are expected to make this determination themselves even though the CFPB will publish an annual list of qualifying counties, which will provide a safe harbor;
- The meaning of the word “adjacent” entails “physical contiguity” when used in a portion of its definition of “rural”;
- New counties for which no Urban Influence Code has been assigned will be considered “rural”, if all the land for the new county was taken from counties which were rural under the rule;
- In defining “underserved” based on HMDA data, the county is considered “underserved” during a given calendar year based on HMDA data for the previous calendar year; therefore, a creditor would rely on the underserved status of a county based on HMDA data from two years previous to the use of this exemption.
The TILA Escrow Compliance Guide for Small Entities, published by the CFPB on April 18, 2013, contains additional information to assist the industry in its efforts to comply with the Escrows Rule beginning on June 1, 2013.
About the Author:
Marissa is Senior Vice President and General Counsel at Bankers Advisory, Inc. She can be reached at firstname.lastname@example.org