The CFPB's "Escrows Rule" Exempts Small Creditors in Rural or Underserved Counties From Escrow Requirements

14 March 2013 Consumer Class Defense Counsel Blog

The Consumer Financial Protection Bureau’s (“CFPB”) Escrow Requirements under the Truth in Lending Act rule (“Escrows Rule”) will go into effect on June 1, 2013. The Rule amends Regulation Z (Truth in Lending) to implement certain amendments to the Truth in Lending Act made by the Dodd-Frank Act. The Escrows Rule requires certain creditors to create escrow accounts for a minimum of five years for higher-priced mortgage loans. The Rule, however, exempts high-priced mortgage loans made by certain small creditors that operate predominantly in rural or underserved counties from this requirement. Rural counties are defined by using the USDA Economic Research Service’s urban influence codes, and underserved counties are defined by reference to data collected under the Home Mortgage Disclosure Act.   

Although the Bureau has not yet published the official list of rural or underserved counties, it issued a preliminary list. The following California Counties are on the list:

  • Alpine County;
  • Amador County;
  • Calaveras County;
  • Colusa County;
  • Del Norte County;
  • Glenn County;
  • Humboldt County;
  • Inyo County;
  • Lassen County;
  • Mariposa County;
  • Modoc County;
  • Mono County;
  • Plumas County;
  • Sierra County;
  • Siskiyou County; and
  • Trinity County

The Bureau has indicated that it will publish an official list of rural or underserved counties prior to June 1, 2013.

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