Truth in Lending Act (Regulation Z) Adjustment to Asset-Size Exemption Threshold, 1356-1359 [2018-28374]
Download as PDF
<![CDATA[
1356
Federal Register / Vol. 84, No. 23 / Monday, February 4, 2019 / Rules and Regulations
4012a(f) is $2,187 for each violation that
occurs on or after January 15, 2019, with
no cap on the total amount of penalties
that can be assessed against any single
institution during any calendar year.
Dated: January 29, 2019.
Dale Aultman,
Secretary, Farm Credit Administration Board.
[FR Doc. 2019–00789 Filed 2–1–19; 8:45 am]
BILLING CODE 6705–01–P
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1026
RIN 3170–AA93
Truth in Lending Act (Regulation Z)
Adjustment to Asset-Size Exemption
Threshold
Bureau of Consumer Financial
Protection.
ACTION: Final rule; official
interpretation.
AGENCY:
The Bureau of Consumer
Financial Protection (Bureau) is
amending the official commentary that
interprets the requirements of the
Bureau’s Regulation Z (Truth in
Lending) to reflect a change in the assetsize threshold for certain creditors to
qualify for an exemption to the
requirement to establish an escrow
account for a higher-priced mortgage
loan based on the annual percentage
change in the average of the Consumer
Price Index for Urban Wage Earners and
Clerical Workers (CPI–W). Based on the
2.6 percent increase in the average of
the CPI–W for the 12-month period
ending in November 2018, the
exemption threshold is adjusted to
increase to $2.167 billion from $2.112
billion. Therefore, creditors with assets
of less than $2.167 billion (including
assets of certain affiliates) as of
December 31, 2018, are exempt, if other
requirements of Regulation Z also are
met, from establishing escrow accounts
for higher-priced mortgage loans in
2019.
SUMMARY:
Effective date: This rule is
effective February 4, 2019. Applicability
date: This rule is applicable on January
1, 2019, consistent with relevant
statutory or regulatory provisions.
FOR FURTHER INFORMATION CONTACT:
Monique Chenault, Paralegal Specialist,
Office of Regulations, at (202) 435–7700.
If you require this document in an
alternative electronic format, please
contact CFPB_Accessibility@cfpb.gov.
SUPPLEMENTARY INFORMATION:
I. Background
Section 129D of the Truth in Lending
Act (TILA) contains a general
requirement that an escrow account be
established by a creditor to pay for
property taxes and insurance premiums
for certain first-lien higher-priced
mortgage loan transactions. TILA
section 129D also generally permits an
exemption from the higher-priced
mortgage loan escrow requirement for a
creditor that meets certain requirements,
including any asset-size threshold the
Bureau may establish.
In the 2013 Escrows Final Rule,1 the
Bureau established such an asset-size
threshold of $2 billion, which would
adjust automatically each year, based on
the year-to-year change in the average of
the CPI–W for each 12-month period
ending in November, with rounding to
the nearest million dollars.2 In 2015, the
Bureau revised the asset-size threshold
for small creditors and how it applies.
The Bureau included in the calculation
of the asset-size threshold the assets of
the creditor’s affiliates that regularly
extended covered transactions secured
by first liens during the applicable
period and added a grace period to
allow an otherwise eligible creditor that
exceeded the asset limit in the
preceding calendar year (but not in the
calendar year before the preceding year)
to continue to operate as a small
creditor with respect to transactions
with applications received before April
1 of the current calendar year.3 For
2018, the threshold was $2.112 billion.
During the 12-month period ending in
November 2018, the average of the CPI–
W increased by 2.6 percent. As a result,
the exemption threshold is increased to
$2.167 billion for 2019. Thus, if the
creditor’s assets together with the assets
of its affiliates that regularly extended
first-lien covered transactions during
calendar year 2018 are less than $2.167
billion on December 31, 2018, and it
meets the other requirements of
§ 1026.35(b)(2)(iii), it will be exempt
from the escrow-accounts requirement
for higher-priced mortgage loans in 2019
and will also be exempt from the
escrow-accounts requirement for higherpriced mortgage loans for purposes of
amozie on DSK3GDR082PROD with RULES
DATES:
VerDate Sep<11>2014
16:02 Feb 01, 2019
Jkt 247001
1 78
FR 4726 (Jan. 22, 2013).
12 CFR 1026.35(b)(2)(iii)(C).
3 See 80 FR 59943, 59951 (Oct. 2, 2015). The
Bureau also issued an interim final rule in March
2016 to revise certain provisions in Regulation Z to
effectuate the Helping Expand Lending Practices in
Rural Communities Act’s amendments to TILA
(Pub. L. 114–94, section 89003, 129 Stat. 1312,
1800–01 (2015)). The rule broadened the cohort of
creditors that may be eligible under TILA for the
special provisions allowing origination of balloonpayment qualified mortgages and balloon-payment
high-cost mortgages, as well as for the escrow
exemption. See 81 FR 16074 (Mar. 25, 2016).
2 See
PO 00000
Frm 00014
Fmt 4700
Sfmt 4700
any loan consummated in 2020 with
applications received before April 1,
2020. The adjustment to the escrows
asset-size exemption threshold will also
increase the threshold for small-creditor
portfolio and balloon-payment qualified
mortgages under Regulation Z. The
requirements for small-creditor portfolio
qualified mortgages at
§ 1026.43(e)(5)(i)(D) reference the asset
threshold in § 1026.35(b)(2)(iii)(C).
Likewise, the requirements for balloonpayment qualified mortgages at
§ 1026.43(f)(1)(vi) reference the asset
threshold in § 1026.35(b)(2)(iii)(C).
Under § 1026.32(d)(1)(ii)(C), balloonpayment qualified mortgages that satisfy
all applicable criteria in
§ 1026.43(f)(1)(i) through (vi) and (f)(2),
including being made by creditors that
have (together with certain affiliates)
total assets below the threshold in
§ 1026.35(b)(2)(iii)(C), are also excepted
from the prohibition on balloon
payments for high-cost mortgages.
II. Procedural Requirements
A. Administrative Procedure Act
Under the Administrative Procedure
Act (APA), notice and opportunity for
public comment are not required if the
Bureau finds that notice and public
comment are impracticable,
unnecessary, or contrary to the public
interest. 5 U.S.C. 553(b)(B). Pursuant to
this final rule, comment 35(b)(2)(iii)–1
in Regulation Z is amended to update
the exemption threshold. The
amendment in this final rule is
technical and merely applies the
formula previously established in
Regulation Z for determining any
adjustments to the exemption threshold.
For these reasons, the Bureau has
determined that publishing a notice of
proposed rulemaking and providing
opportunity for public comment are
unnecessary. Therefore, the amendment
is adopted in final form.
Section 553(d) of the APA generally
requires publication of a final rule not
less than 30 days before its effective
date, except (1) a substantive rule which
grants or recognizes an exemption or
relieves a restriction; (2) interpretive
rules and statements of policy; or (3) as
otherwise provided by the agency for
good cause found and published with
the rule. 5 U.S.C. 553(d). At a minimum,
the Bureau believes the amendments fall
under the third exception to section
553(d). The Bureau finds that there is
good cause to make the amendments
effective on February 4, 2019. The
amendment in this final rule is
technical and non-discretionary, and it
applies the method previously
established in the agency’s regulations
E:\FR\FM\04FER1.SGM
04FER1
Federal Register / Vol. 84, No. 23 / Monday, February 4, 2019 / Rules and Regulations
Section 1026.35—Requirements for HigherPriced Mortgage Loans
for automatic adjustments to the
threshold.
*
B. Regulatory Flexibility Act
Because no notice of proposed
rulemaking is required, the Regulatory
Flexibility Act does not require an
initial or final regulatory flexibility
analysis.4
C. Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act of 1995,5 the agency
reviewed this final rule. No collections
of information pursuant to the
Paperwork Reduction Act are contained
in the final rule.
D. Congressional Review Act
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the Bureau
will submit a report containing this rule
and other required information to the
United States Senate, the United States
House of Representatives, and the
Comptroller General of the United
States prior to the rule taking effect. The
Office of Information and Regulatory
Affairs (OIRA) has designated this rule
as not a ‘‘major rule’’ as defined by 5
U.S.C. 804(2).
List of Subjects in 12 CFR Part 1026
Advertising, Appraisal, Appraiser,
Banking, Banks, Consumer protection,
Credit, Credit unions, Mortgages,
National banks, Reporting and
recordkeeping requirements, Savings
associations, Truth in lending.
Authority and Issuance
For the reasons set forth above, the
Bureau amends Regulation Z, 12 CFR
part 1026, as set forth below:
PART 1026—TRUTH IN LENDING
(REGULATION Z)
1. The authority citation for part 1026
continues to read as follows:
■
Authority: 12 U.S.C. 2601, 2603–2605,
2607, 2609, 2617, 3353, 5511, 5512, 5532,
5581; 15 U.S.C. 1601 et seq.
2. In supplement I to part 1026, under
Section 1026.35—Requirements for
Higher-Priced Mortgage Loans, 35(b)(2)
Exemptions, Paragraph 35(b)(2)(iii) is
revised to read as follows:
■
amozie on DSK3GDR082PROD with RULES
Supplement I to Part 1026—Official
Interpretations
*
*
*
*
*
Subpart E—Special Rules for Certain Home
Mortgage Transactions
*
*
45
*
*
*
U.S.C. 603(a), 604(a).
U.S.C. 3506; 5 CFR part 1320.
5 44
VerDate Sep<11>2014
16:02 Feb 01, 2019
*
*
*
*
35(b)(2) Exemptions.
Jkt 247001
*
*
*
*
*
Paragraph 35(b)(2)(iii).
1. Requirements for exemption. Under
§ 1026.35(b)(2)(iii), except as provided in
§ 1026.35(b)(2)(v), a creditor need not
establish an escrow account for taxes and
insurance for a higher-priced mortgage loan,
provided the following four conditions are
satisfied when the higher-priced mortgage
loan is consummated:
i. During the preceding calendar year, or
during either of the two preceding calendar
years if the application for the loan was
received before April 1 of the current
calendar year, a creditor extended a first-lien
covered transaction, as defined in
§ 1026.43(b)(1), secured by a property located
in an area that is either ‘‘rural’’ or
‘‘underserved,’’ as set forth in
§ 1026.35(b)(2)(iv).
A. In general, whether the rural-orunderserved test is satisfied depends on the
creditor’s activity during the preceding
calendar year. However, if the application for
the loan in question was received before
April 1 of the current calendar year, the
creditor may instead meet the rural-orunderserved test based on its activity during
the next-to-last calendar year. This provides
creditors with a grace period if their activity
meets the rural-or-underserved test (in
§ 1026.35(b)(2)(iii)(A)) in one calendar year
but fails to meet it in the next calendar year.
B. A creditor meets the rural-orunderserved test for any higher-priced
mortgage loan consummated during a
calendar year if it extended a first-lien
covered transaction in the preceding calendar
year secured by a property located in a ruralor-underserved area. If the creditor does not
meet the rural-or-underserved test in the
preceding calendar year, the creditor meets
this condition for a higher-priced mortgage
loan consummated during the current
calendar year only if the application for the
loan was received before April 1 of the
current calendar year and the creditor
extended a first-lien covered transaction
during the next-to-last calendar year that is
secured by a property located in a rural or
underserved area. The following examples
are illustrative:
1. Assume that a creditor extended during
2016 a first-lien covered transaction that is
secured by a property located in a rural or
underserved area. Because the creditor
extended a first-lien covered transaction
during 2016 that is secured by a property
located in a rural or underserved area, the
creditor can meet this condition for
exemption for any higher-priced mortgage
loan consummated during 2017.
2. Assume that a creditor did not extend
during 2016 a first-lien covered transaction
secured by a property that is located in a
rural or underserved area. Assume further
that the same creditor extended during 2015
a first-lien covered transaction that is located
in a rural or underserved area. Assume
further that the creditor consummates a
higher-priced mortgage loan in 2017 for
which the application was received in
PO 00000
Frm 00015
Fmt 4700
Sfmt 4700
1357
November 2017. Because the creditor did not
extend during 2016 a first-lien covered
transaction secured by a property that is
located in a rural or underserved area, and
the application was received on or after April
1, 2017, the creditor does not meet this
condition for exemption. However, assume
instead that the creditor consummates a
higher-priced mortgage loan in 2017 based on
an application received in February 2017.
The creditor meets this condition for
exemption for this loan because the
application was received before April 1,
2017, and the creditor extended during 2015
a first-lien covered transaction that is located
in a rural or underserved area.
ii. The creditor and its affiliates together
extended no more than 2,000 covered
transactions, as defined in § 1026.43(b)(1),
secured by first liens, that were sold,
assigned, or otherwise transferred by the
creditor or its affiliates to another person, or
that were subject at the time of
consummation to a commitment to be
acquired by another person, during the
preceding calendar year or during either of
the two preceding calendar years if the
application for the loan was received before
April 1 of the current calendar year. For
purposes of § 1026.35(b)(2)(iii)(B), a transfer
of a first-lien covered transaction to ‘‘another
person’’ includes a transfer by a creditor to
its affiliate.
A. In general, whether this condition is
satisfied depends on the creditor’s activity
during the preceding calendar year. However,
if the application for the loan in question is
received before April 1 of the current
calendar year, the creditor may instead meet
this condition based on activity during the
next-to-last calendar year. This provides
creditors with a grace period if their activity
falls at or below the threshold in one
calendar year but exceeds it in the next
calendar year.
B. For example, assume that in 2015 a
creditor and its affiliates together extended
1,500 loans that were sold, assigned, or
otherwise transferred by the creditor or its
affiliates to another person, or that were
subject at the time of consummation to a
commitment to be acquired by another
person, and 2,500 such loans in 2016.
Because the 2016 transaction activity exceeds
the threshold but the 2015 transaction
activity does not, the creditor satisfies this
condition for exemption for a higher-priced
mortgage loan consummated during 2017 if
the creditor received the application for the
loan before April 1, 2017, but does not satisfy
this condition for a higher-priced mortgage
loan consummated during 2017 if the
application for the loan was received on or
after April 1, 2017.
C. For purposes of § 1026.35(b)(2)(iii)(B),
extensions of first-lien covered transactions,
during the applicable time period, by all of
a creditor’s affiliates, as ‘‘affiliate’’ is defined
in § 1026.32(b)(5), are counted toward the
threshold in this section. ‘‘Affiliate’’ is
defined in § 1026.32(b)(5) as any company
that controls, is controlled by, or is under
common control with another company, as
set forth in the Bank Holding Company Act
of 1956 (12 U.S.C. 1841 et seq.). Under the
Bank Holding Company Act, a company has
E:\FR\FM\04FER1.SGM
04FER1
amozie on DSK3GDR082PROD with RULES
1358
Federal Register / Vol. 84, No. 23 / Monday, February 4, 2019 / Rules and Regulations
control over a bank or another company if it
directly or indirectly or acting through one or
more persons owns, controls, or has power to
vote 25 per centum or more of any class of
voting securities of the bank or company; it
controls in any manner the election of a
majority of the directors or trustees of the
bank or company; or the Federal Reserve
Board determines, after notice and
opportunity for hearing, that the company
directly or indirectly exercises a controlling
influence over the management or policies of
the bank or company. 12 U.S.C. 1841(a)(2).
iii. As of the end of the preceding calendar
year, or as of the end of either of the two
preceding calendar years if the application
for the loan was received before April 1 of
the current calendar year, the creditor and its
affiliates that regularly extended covered
transactions secured by first liens, together,
had total assets that are less than the
applicable annual asset threshold.
A. For purposes of § 1026.35(b)(2)(iii)(C),
in addition to the creditor’s assets, only the
assets of a creditor’s ‘‘affiliate’’ (as defined by
§ 1026.32(b)(5)) that regularly extended
covered transactions (as defined by
§ 1026.43(b)(1)) secured by first liens, are
counted toward the applicable annual asset
threshold. See comment 35(b)(2)(iii)–1.ii.C
for discussion of definition of ‘‘affiliate.’’
B. Only the assets of a creditor’s affiliate
that regularly extended first-lien covered
transactions during the applicable period are
included in calculating the creditor’s assets.
The meaning of ‘‘regularly extended’’ is
based on the number of times a person
extends consumer credit for purposes of the
definition of ‘‘creditor’’ in § 1026.2(a)(17).
Because covered transactions are
‘‘transactions secured by a dwelling,’’
consistent with § 1026.2(a)(17)(v), an affiliate
regularly extended covered transactions if it
extended more than five covered transactions
in a calendar year. Also consistent with
§ 1026.2(a)(17)(v), because a covered
transaction may be a high-cost mortgage
subject to § 1026.32, an affiliate regularly
extends covered transactions if, in any 12month period, it extends more than one
covered transaction that is subject to the
requirements of § 1026.32 or one or more
such transactions through a mortgage broker.
Thus, if a creditor’s affiliate regularly
extended first-lien covered transactions
during the preceding calendar year, the
creditor’s assets as of the end of the
preceding calendar year, for purposes of the
asset limit, take into account the assets of
that affiliate. If the creditor, together with its
affiliates that regularly extended first-lien
covered transactions, exceeded the asset limit
in the preceding calendar year—to be eligible
to operate as a small creditor for transactions
with applications received before April 1 of
the current calendar year—the assets of the
creditor’s affiliates that regularly extended
covered transactions in the year before the
preceding calendar year are included in
calculating the creditor’s assets.
C. If multiple creditors share ownership of
a company that regularly extended first-lien
covered transactions, the assets of the
company count toward the asset limit for a
co-owner creditor if the company is an
‘‘affiliate,’’ as defined in § 1026.32(b)(5), of
VerDate Sep<11>2014
16:02 Feb 01, 2019
Jkt 247001
the co-owner creditor. Assuming the
company is not an affiliate of the co-owner
creditor by virtue of any other aspect of the
definition (such as by the company and coowner creditor being under common control),
the company’s assets are included toward the
asset limit of the co-owner creditor only if
the company is controlled by the co-owner
creditor, ‘‘as set forth in the Bank Holding
Company Act.’’ If the co-owner creditor and
the company are affiliates (by virtue of any
aspect of the definition), the co-owner
creditor counts all of the company’s assets
toward the asset limit, regardless of the coowner creditor’s ownership share. Further,
because the co-owner and the company are
mutual affiliates the company also would
count all of the co-owner’s assets towards its
own asset limit. See comment 35(b)(2)(iii)–
1.ii.C for discussion of the definition of
‘‘affiliate.’’
D. A creditor satisfies the criterion in
§ 1026.35(b)(2)(iii)(C) for purposes of any
higher-priced mortgage loan consummated
during 2016, for example, if the creditor
(together with its affiliates that regularly
extended first-lien covered transactions) had
total assets of less than the applicable asset
threshold on December 31, 2015. A creditor
that (together with its affiliates that regularly
extended first-lien covered transactions) did
not meet the applicable asset threshold on
December 31, 2015 satisfies this criterion for
a higher-priced mortgage loan consummated
during 2016 if the application for the loan
was received before April 1, 2016 and the
creditor (together with its affiliates that
regularly extended first-lien covered
transactions) had total assets of less than the
applicable asset threshold on December 31,
2014.
E. Under § 1026.35(b)(2)(iii)(C), the
$2,000,000,000 asset threshold adjusts
automatically each year based on the year-toyear change in the average of the Consumer
Price Index for Urban Wage Earners and
Clerical Workers, not seasonally adjusted, for
each 12-month period ending in November,
with rounding to the nearest million dollars.
The Bureau will publish notice of the asset
threshold each year by amending this
comment. For calendar year 2019, the asset
threshold is $2,167,000,000. A creditor that
together with the assets of its affiliates that
regularly extended first-lien covered
transactions during calendar year 2018 has
total assets of less than $2,167,000,000 on
December 31, 2018, satisfies this criterion for
purposes of any loan consummated in 2019
and for purposes of any loan consummated
in 2020 for which the application was
received before April 1, 2020. For historical
purposes:
1. For calendar year 2013, the asset
threshold was $2,000,000,000. Creditors that
had total assets of less than $2,000,000,000
on December 31, 2012, satisfied this criterion
for purposes of the exemption during 2013.
2. For calendar year 2014, the asset
threshold was $2,028,000,000. Creditors that
had total assets of less than $2,028,000,000
on December 31, 2013, satisfied this criterion
for purposes of the exemption during 2014.
3. For calendar year 2015, the asset
threshold was $2,060,000,000. Creditors that
had total assets of less than $2,060,000,000
PO 00000
Frm 00016
Fmt 4700
Sfmt 4700
on December 31, 2014, satisfied this criterion
for purposes of any loan consummated in
2015 and, if the creditor’s assets together
with the assets of its affiliates that regularly
extended first-lien covered transactions
during calendar year 2014 were less than that
amount, for purposes of any loan
consummated in 2016 for which the
application was received before April 1,
2016.
4. For calendar year 2016, the asset
threshold was $2,052,000,000. A creditor that
together with the assets of its affiliates that
regularly extended first-lien covered
transactions during calendar year 2015 had
total assets of less than $2,052,000,000 on
December 31, 2015, satisfied this criterion for
purposes of any loan consummated in 2016
and for purposes of any loan consummated
in 2017 for which the application was
received before April 1, 2017.
5. For calendar year 2017, the asset
threshold was $2,069,000,000. A creditor that
together with the assets of its affiliates that
regularly extended first-lien covered
transactions during calendar year 2016 had
total assets of less than $2,069,000,000 on
December 31, 2016, satisfied this criterion for
purposes of any loan consummated in 2017
and for purposes of any loan consummated
in 2018 for which the application was
received before April 1, 2018.
6. For calendar year 2018, the asset
threshold was $2,112,000,000. A creditor that
together with the assets of its affiliates that
regularly extended first-lien covered
transactions during calendar year 2017 had
total assets of less than $2,112,000,000 on
December 31, 2017, satisfied this criterion for
purposes of any loan consummated in 2018
and for purposes of any loan consummated
in 2019 for which the application was
received before April 1, 2019.
iv. The creditor and its affiliates do not
maintain an escrow account for any mortgage
transaction being serviced by the creditor or
its affiliate at the time the transaction is
consummated, except as provided in
§ 1026.35(b)(2)(iii)(D)(1) and (2). Thus, the
exemption applies, provided the other
conditions of § 1026.35(b)(2)(iii) are satisfied,
even if the creditor previously maintained
escrow accounts for mortgage loans, provided
it no longer maintains any such accounts
except as provided in
§ 1026.35(b)(2)(iii)(D)(1) and (2). Once a
creditor or its affiliate begins escrowing for
loans currently serviced other than those
addressed in § 1026.35(b)(2)(iii)(D)(1) and (2),
however, the creditor and its affiliate become
ineligible for the exemption in
§ 1026.35(b)(2)(iii) on higher-priced mortgage
loans they make while such escrowing
continues. Thus, as long as a creditor (or its
affiliate) services and maintains escrow
accounts for any mortgage loans, other than
as provided in § 1026.35(b)(2)(iii)(D)(1) and
(2), the creditor will not be eligible for the
exemption for any higher-priced mortgage
loan it may make. For purposes of
§ 1026.35(b)(2)(iii), a creditor or its affiliate
‘‘maintains’’ an escrow account only if it
services a mortgage loan for which an escrow
account has been established at least through
the due date of the second periodic payment
under the terms of the legal obligation.
*
E:\FR\FM\04FER1.SGM
*
*
04FER1
*
*
1359
Federal Register / Vol. 84, No. 23 / Monday, February 4, 2019 / Rules and Regulations
Dated: December 20, 2018.
Kathleen Kraninger,
Director, Bureau of Consumer Financial
Protection.
Federal Energy Regulatory
Commission
rental fees by county (or other
geographic area) from October 1, 2018,
through September 30, 2019 (Fiscal Year
2019).
FOR FURTHER INFORMATION CONTACT:
Norman Richardson, Financial
Management Division, Office of the
Executive Director, Federal Energy
Regulatory Commission, 888 First Street
NE, Washington, DC 20426, (202) 502–
6219, Norman.Richardson@ferc.gov.
SUPPLEMENTARY INFORMATION:
18 CFR Part 11
Annual Update to Fee Schedule
[Docket No. RM11–6–000]
(Issued January 18, 2019)
[FR Doc. 2018–28374 Filed 1–31–19; 4:15 pm]
BILLING CODE 4810–AM–P
DEPARTMENT OF ENERGY
Annual Update to Fee Schedule for the
Use of Government Lands by
Hydropower Licensees
Federal Energy Regulatory
Commission.
ACTION: Final rule.
AGENCY:
In accordance with the
Commission’s regulations, the
Commission, by its designee, the
Executive Director, issues this
document of the annual update to the
fee schedule, which lists per-acre rental
fees by county (or other geographic area)
for use of government lands by
hydropower licensees.
DATES: This rule is effective February 4,
2019 and updates Appendix A to Part
11 with the fee schedule of per-acre
amozie on DSK3GDR082PROD with RULES
SUMMARY:
regarding Congressional review of final
rules, do not apply to this Final Rule
because the rule concerns agency
procedure and practice and will not
substantially affect the rights or
obligations of non-agency parties. This
Final Rule merely updates the fee
schedule published in the Code of
Federal Regulations to reflect scheduled
adjustments, as provided for in section
11.2 of the Commission’s regulations.
List of Subjects in 18 CFR Part 11
Public lands.
Section 11.2 of the Commission’s
regulations provides a method for
computing reasonable annual charges
for recompensing the United States for
the use, occupancy, and enjoyment of
its lands by hydropower licensees.1
Annual charges for the use of
government lands are payable in
advance, and are based on an annual
schedule of per-acre rental fees
published in Appendix A to Part 11 of
the Commission’s regulations.2 This
document updates the fee schedule in
Appendix A to Part 11 for fiscal year
2019 (October 1, 2018, through
September 30, 2019).
By the Executive Director.
Issued: January 18, 2019.
Anton C. Porter,
Executive Director, Office of the Executive
Director.
In consideration of the foregoing, the
Commission amends part 11, chapter I,
title 18, Code of Federal Regulations, as
follows.
PART 11—[AMENDED]
1. The authority citation for part 11
continues to read as follows:
■
Authority: 16 U.S.C. 792–828c; 42 U.S.C.
7101–7352.
Effective Date
2. Appendix A to part 11 is revised to
read as follows:
This Final Rule is effective February
4, 2019. The provisions of 5 U.S.C. 804,
Appendix A to Part 11—Fee Schedule
for FY 2019
■
State
County
Alabama ......................................................................................
Autauga ......................................................................................
Baldwin .......................................................................................
Barbour ......................................................................................
Bibb ............................................................................................
Blount .........................................................................................
Bullock ........................................................................................
Butler ..........................................................................................
Calhoun ......................................................................................
Chambers ...................................................................................
Cherokee ....................................................................................
Chilton ........................................................................................
Choctaw .....................................................................................
Clarke .........................................................................................
Clay ............................................................................................
Cleburne .....................................................................................
Coffee .........................................................................................
Colbert ........................................................................................
Conecuh .....................................................................................
Coosa .........................................................................................
Covington ...................................................................................
Crenshaw ...................................................................................
Cullman ......................................................................................
Dale ............................................................................................
Dallas .........................................................................................
DeKalb .......................................................................................
Elmore ........................................................................................
Escambia ...................................................................................
Etowah .......................................................................................
Fayette .......................................................................................
1 Annual Charges for the Use of Government
Lands, Order No. 774, 78 FR 5256 (January 25,
2013), FERC Stats. & Regs. ¶ 31,341 (2013).
VerDate Sep<11>2014
16:02 Feb 01, 2019
Jkt 247001
2 18
PO 00000
Fee/acre/yr.
CFR part 11 (2018).
Frm 00017
Fmt 4700
Sfmt 4700
E:\FR\FM\04FER1.SGM
04FER1
$64.31
112.02
63.64
59.03
102.24
61.29
68.36
85.74
73.25
96.22
82.54
52.70
57.56
69.62
77.26
74.20
79.37
56.04
58.33
63.47
57.10
117.54
70.64
51.65
106.67
89.36
63.92
100.16
59.77
]]>Agencies
[Federal Register Volume 84, Number 23 (Monday, February 4, 2019)]
[Rules and Regulations]
[Pages 1356-1359]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-28374]
=======================================================================
-----------------------------------------------------------------------
BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Part 1026
RIN 3170-AA93
Truth in Lending Act (Regulation Z) Adjustment to Asset-Size
Exemption Threshold
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Final rule; official interpretation.
-----------------------------------------------------------------------
SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is
amending the official commentary that interprets the requirements of
the Bureau's Regulation Z (Truth in Lending) to reflect a change in the
asset-size threshold for certain creditors to qualify for an exemption
to the requirement to establish an escrow account for a higher-priced
mortgage loan based on the annual percentage change in the average of
the Consumer Price Index for Urban Wage Earners and Clerical Workers
(CPI-W). Based on the 2.6 percent increase in the average of the CPI-W
for the 12-month period ending in November 2018, the exemption
threshold is adjusted to increase to $2.167 billion from $2.112
billion. Therefore, creditors with assets of less than $2.167 billion
(including assets of certain affiliates) as of December 31, 2018, are
exempt, if other requirements of Regulation Z also are met, from
establishing escrow accounts for higher-priced mortgage loans in 2019.
DATES: Effective date: This rule is effective February 4, 2019.
Applicability date: This rule is applicable on January 1, 2019,
consistent with relevant statutory or regulatory provisions.
FOR FURTHER INFORMATION CONTACT: Monique Chenault, Paralegal
Specialist, Office of Regulations, at (202) 435-7700. If you require
this document in an alternative electronic format, please contact
CFPB_Accessibility@cfpb.gov.
SUPPLEMENTARY INFORMATION:
I. Background
Section 129D of the Truth in Lending Act (TILA) contains a general
requirement that an escrow account be established by a creditor to pay
for property taxes and insurance premiums for certain first-lien
higher-priced mortgage loan transactions. TILA section 129D also
generally permits an exemption from the higher-priced mortgage loan
escrow requirement for a creditor that meets certain requirements,
including any asset-size threshold the Bureau may establish.
In the 2013 Escrows Final Rule,\1\ the Bureau established such an
asset-size threshold of $2 billion, which would adjust automatically
each year, based on the year-to-year change in the average of the CPI-W
for each 12-month period ending in November, with rounding to the
nearest million dollars.\2\ In 2015, the Bureau revised the asset-size
threshold for small creditors and how it applies. The Bureau included
in the calculation of the asset-size threshold the assets of the
creditor's affiliates that regularly extended covered transactions
secured by first liens during the applicable period and added a grace
period to allow an otherwise eligible creditor that exceeded the asset
limit in the preceding calendar year (but not in the calendar year
before the preceding year) to continue to operate as a small creditor
with respect to transactions with applications received before April 1
of the current calendar year.\3\ For 2018, the threshold was $2.112
billion.
---------------------------------------------------------------------------
\1\ 78 FR 4726 (Jan. 22, 2013).
\2\ See 12 CFR 1026.35(b)(2)(iii)(C).
\3\ See 80 FR 59943, 59951 (Oct. 2, 2015). The Bureau also
issued an interim final rule in March 2016 to revise certain
provisions in Regulation Z to effectuate the Helping Expand Lending
Practices in Rural Communities Act's amendments to TILA (Pub. L.
114-94, section 89003, 129 Stat. 1312, 1800-01 (2015)). The rule
broadened the cohort of creditors that may be eligible under TILA
for the special provisions allowing origination of balloon-payment
qualified mortgages and balloon-payment high-cost mortgages, as well
as for the escrow exemption. See 81 FR 16074 (Mar. 25, 2016).
---------------------------------------------------------------------------
During the 12-month period ending in November 2018, the average of
the CPI-W increased by 2.6 percent. As a result, the exemption
threshold is increased to $2.167 billion for 2019. Thus, if the
creditor's assets together with the assets of its affiliates that
regularly extended first-lien covered transactions during calendar year
2018 are less than $2.167 billion on December 31, 2018, and it meets
the other requirements of Sec. 1026.35(b)(2)(iii), it will be exempt
from the escrow-accounts requirement for higher-priced mortgage loans
in 2019 and will also be exempt from the escrow-accounts requirement
for higher-priced mortgage loans for purposes of any loan consummated
in 2020 with applications received before April 1, 2020. The adjustment
to the escrows asset-size exemption threshold will also increase the
threshold for small-creditor portfolio and balloon-payment qualified
mortgages under Regulation Z. The requirements for small-creditor
portfolio qualified mortgages at Sec. 1026.43(e)(5)(i)(D) reference
the asset threshold in Sec. 1026.35(b)(2)(iii)(C). Likewise, the
requirements for balloon-payment qualified mortgages at Sec.
1026.43(f)(1)(vi) reference the asset threshold in Sec.
1026.35(b)(2)(iii)(C). Under Sec. 1026.32(d)(1)(ii)(C), balloon-
payment qualified mortgages that satisfy all applicable criteria in
Sec. 1026.43(f)(1)(i) through (vi) and (f)(2), including being made by
creditors that have (together with certain affiliates) total assets
below the threshold in Sec. 1026.35(b)(2)(iii)(C), are also excepted
from the prohibition on balloon payments for high-cost mortgages.
II. Procedural Requirements
A. Administrative Procedure Act
Under the Administrative Procedure Act (APA), notice and
opportunity for public comment are not required if the Bureau finds
that notice and public comment are impracticable, unnecessary, or
contrary to the public interest. 5 U.S.C. 553(b)(B). Pursuant to this
final rule, comment 35(b)(2)(iii)-1 in Regulation Z is amended to
update the exemption threshold. The amendment in this final rule is
technical and merely applies the formula previously established in
Regulation Z for determining any adjustments to the exemption
threshold. For these reasons, the Bureau has determined that publishing
a notice of proposed rulemaking and providing opportunity for public
comment are unnecessary. Therefore, the amendment is adopted in final
form.
Section 553(d) of the APA generally requires publication of a final
rule not less than 30 days before its effective date, except (1) a
substantive rule which grants or recognizes an exemption or relieves a
restriction; (2) interpretive rules and statements of policy; or (3) as
otherwise provided by the agency for good cause found and published
with the rule. 5 U.S.C. 553(d). At a minimum, the Bureau believes the
amendments fall under the third exception to section 553(d). The Bureau
finds that there is good cause to make the amendments effective on
February 4, 2019. The amendment in this final rule is technical and
non-discretionary, and it applies the method previously established in
the agency's regulations
[[Page 1357]]
for automatic adjustments to the threshold.
B. Regulatory Flexibility Act
Because no notice of proposed rulemaking is required, the
Regulatory Flexibility Act does not require an initial or final
regulatory flexibility analysis.\4\
---------------------------------------------------------------------------
\4\ 5 U.S.C. 603(a), 604(a).
---------------------------------------------------------------------------
C. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995,\5\ the
agency reviewed this final rule. No collections of information pursuant
to the Paperwork Reduction Act are contained in the final rule.
---------------------------------------------------------------------------
\5\ 44 U.S.C. 3506; 5 CFR part 1320.
---------------------------------------------------------------------------
D. Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Bureau will submit a report containing this rule and other required
information to the United States Senate, the United States House of
Representatives, and the Comptroller General of the United States prior
to the rule taking effect. The Office of Information and Regulatory
Affairs (OIRA) has designated this rule as not a ``major rule'' as
defined by 5 U.S.C. 804(2).
List of Subjects in 12 CFR Part 1026
Advertising, Appraisal, Appraiser, Banking, Banks, Consumer
protection, Credit, Credit unions, Mortgages, National banks, Reporting
and recordkeeping requirements, Savings associations, Truth in lending.
Authority and Issuance
For the reasons set forth above, the Bureau amends Regulation Z, 12
CFR part 1026, as set forth below:
PART 1026--TRUTH IN LENDING (REGULATION Z)
0
1. The authority citation for part 1026 continues to read as follows:
Authority: 12 U.S.C. 2601, 2603-2605, 2607, 2609, 2617, 3353,
5511, 5512, 5532, 5581; 15 U.S.C. 1601 et seq.
0
2. In supplement I to part 1026, under Section 1026.35--Requirements
for Higher-Priced Mortgage Loans, 35(b)(2) Exemptions, Paragraph
35(b)(2)(iii) is revised to read as follows:
Supplement I to Part 1026--Official Interpretations
* * * * *
Subpart E--Special Rules for Certain Home Mortgage Transactions
* * * * *
Section 1026.35--Requirements for Higher-Priced Mortgage Loans
* * * * *
35(b)(2) Exemptions.
* * * * *
Paragraph 35(b)(2)(iii).
1. Requirements for exemption. Under Sec. 1026.35(b)(2)(iii),
except as provided in Sec. 1026.35(b)(2)(v), a creditor need not
establish an escrow account for taxes and insurance for a higher-
priced mortgage loan, provided the following four conditions are
satisfied when the higher-priced mortgage loan is consummated:
i. During the preceding calendar year, or during either of the
two preceding calendar years if the application for the loan was
received before April 1 of the current calendar year, a creditor
extended a first-lien covered transaction, as defined in Sec.
1026.43(b)(1), secured by a property located in an area that is
either ``rural'' or ``underserved,'' as set forth in Sec.
1026.35(b)(2)(iv).
A. In general, whether the rural-or-underserved test is
satisfied depends on the creditor's activity during the preceding
calendar year. However, if the application for the loan in question
was received before April 1 of the current calendar year, the
creditor may instead meet the rural-or-underserved test based on its
activity during the next-to-last calendar year. This provides
creditors with a grace period if their activity meets the rural-or-
underserved test (in Sec. 1026.35(b)(2)(iii)(A)) in one calendar
year but fails to meet it in the next calendar year.
B. A creditor meets the rural-or-underserved test for any
higher-priced mortgage loan consummated during a calendar year if it
extended a first-lien covered transaction in the preceding calendar
year secured by a property located in a rural-or-underserved area.
If the creditor does not meet the rural-or-underserved test in the
preceding calendar year, the creditor meets this condition for a
higher-priced mortgage loan consummated during the current calendar
year only if the application for the loan was received before April
1 of the current calendar year and the creditor extended a first-
lien covered transaction during the next-to-last calendar year that
is secured by a property located in a rural or underserved area. The
following examples are illustrative:
1. Assume that a creditor extended during 2016 a first-lien
covered transaction that is secured by a property located in a rural
or underserved area. Because the creditor extended a first-lien
covered transaction during 2016 that is secured by a property
located in a rural or underserved area, the creditor can meet this
condition for exemption for any higher-priced mortgage loan
consummated during 2017.
2. Assume that a creditor did not extend during 2016 a first-
lien covered transaction secured by a property that is located in a
rural or underserved area. Assume further that the same creditor
extended during 2015 a first-lien covered transaction that is
located in a rural or underserved area. Assume further that the
creditor consummates a higher-priced mortgage loan in 2017 for which
the application was received in November 2017. Because the creditor
did not extend during 2016 a first-lien covered transaction secured
by a property that is located in a rural or underserved area, and
the application was received on or after April 1, 2017, the creditor
does not meet this condition for exemption. However, assume instead
that the creditor consummates a higher-priced mortgage loan in 2017
based on an application received in February 2017. The creditor
meets this condition for exemption for this loan because the
application was received before April 1, 2017, and the creditor
extended during 2015 a first-lien covered transaction that is
located in a rural or underserved area.
ii. The creditor and its affiliates together extended no more
than 2,000 covered transactions, as defined in Sec. 1026.43(b)(1),
secured by first liens, that were sold, assigned, or otherwise
transferred by the creditor or its affiliates to another person, or
that were subject at the time of consummation to a commitment to be
acquired by another person, during the preceding calendar year or
during either of the two preceding calendar years if the application
for the loan was received before April 1 of the current calendar
year. For purposes of Sec. 1026.35(b)(2)(iii)(B), a transfer of a
first-lien covered transaction to ``another person'' includes a
transfer by a creditor to its affiliate.
A. In general, whether this condition is satisfied depends on
the creditor's activity during the preceding calendar year. However,
if the application for the loan in question is received before April
1 of the current calendar year, the creditor may instead meet this
condition based on activity during the next-to-last calendar year.
This provides creditors with a grace period if their activity falls
at or below the threshold in one calendar year but exceeds it in the
next calendar year.
B. For example, assume that in 2015 a creditor and its
affiliates together extended 1,500 loans that were sold, assigned,
or otherwise transferred by the creditor or its affiliates to
another person, or that were subject at the time of consummation to
a commitment to be acquired by another person, and 2,500 such loans
in 2016. Because the 2016 transaction activity exceeds the threshold
but the 2015 transaction activity does not, the creditor satisfies
this condition for exemption for a higher-priced mortgage loan
consummated during 2017 if the creditor received the application for
the loan before April 1, 2017, but does not satisfy this condition
for a higher-priced mortgage loan consummated during 2017 if the
application for the loan was received on or after April 1, 2017.
C. For purposes of Sec. 1026.35(b)(2)(iii)(B), extensions of
first-lien covered transactions, during the applicable time period,
by all of a creditor's affiliates, as ``affiliate'' is defined in
Sec. 1026.32(b)(5), are counted toward the threshold in this
section. ``Affiliate'' is defined in Sec. 1026.32(b)(5) as any
company that controls, is controlled by, or is under common control
with another company, as set forth in the Bank Holding Company Act
of 1956 (12 U.S.C. 1841 et seq.). Under the Bank Holding Company
Act, a company has
[[Page 1358]]
control over a bank or another company if it directly or indirectly
or acting through one or more persons owns, controls, or has power
to vote 25 per centum or more of any class of voting securities of
the bank or company; it controls in any manner the election of a
majority of the directors or trustees of the bank or company; or the
Federal Reserve Board determines, after notice and opportunity for
hearing, that the company directly or indirectly exercises a
controlling influence over the management or policies of the bank or
company. 12 U.S.C. 1841(a)(2).
iii. As of the end of the preceding calendar year, or as of the
end of either of the two preceding calendar years if the application
for the loan was received before April 1 of the current calendar
year, the creditor and its affiliates that regularly extended
covered transactions secured by first liens, together, had total
assets that are less than the applicable annual asset threshold.
A. For purposes of Sec. 1026.35(b)(2)(iii)(C), in addition to
the creditor's assets, only the assets of a creditor's ``affiliate''
(as defined by Sec. 1026.32(b)(5)) that regularly extended covered
transactions (as defined by Sec. 1026.43(b)(1)) secured by first
liens, are counted toward the applicable annual asset threshold. See
comment 35(b)(2)(iii)-1.ii.C for discussion of definition of
``affiliate.''
B. Only the assets of a creditor's affiliate that regularly
extended first-lien covered transactions during the applicable
period are included in calculating the creditor's assets. The
meaning of ``regularly extended'' is based on the number of times a
person extends consumer credit for purposes of the definition of
``creditor'' in Sec. 1026.2(a)(17). Because covered transactions
are ``transactions secured by a dwelling,'' consistent with Sec.
1026.2(a)(17)(v), an affiliate regularly extended covered
transactions if it extended more than five covered transactions in a
calendar year. Also consistent with Sec. 1026.2(a)(17)(v), because
a covered transaction may be a high-cost mortgage subject to Sec.
1026.32, an affiliate regularly extends covered transactions if, in
any 12-month period, it extends more than one covered transaction
that is subject to the requirements of Sec. 1026.32 or one or more
such transactions through a mortgage broker. Thus, if a creditor's
affiliate regularly extended first-lien covered transactions during
the preceding calendar year, the creditor's assets as of the end of
the preceding calendar year, for purposes of the asset limit, take
into account the assets of that affiliate. If the creditor, together
with its affiliates that regularly extended first-lien covered
transactions, exceeded the asset limit in the preceding calendar
year--to be eligible to operate as a small creditor for transactions
with applications received before April 1 of the current calendar
year--the assets of the creditor's affiliates that regularly
extended covered transactions in the year before the preceding
calendar year are included in calculating the creditor's assets.
C. If multiple creditors share ownership of a company that
regularly extended first-lien covered transactions, the assets of
the company count toward the asset limit for a co-owner creditor if
the company is an ``affiliate,'' as defined in Sec. 1026.32(b)(5),
of the co-owner creditor. Assuming the company is not an affiliate
of the co-owner creditor by virtue of any other aspect of the
definition (such as by the company and co-owner creditor being under
common control), the company's assets are included toward the asset
limit of the co-owner creditor only if the company is controlled by
the co-owner creditor, ``as set forth in the Bank Holding Company
Act.'' If the co-owner creditor and the company are affiliates (by
virtue of any aspect of the definition), the co-owner creditor
counts all of the company's assets toward the asset limit,
regardless of the co-owner creditor's ownership share. Further,
because the co-owner and the company are mutual affiliates the
company also would count all of the co-owner's assets towards its
own asset limit. See comment 35(b)(2)(iii)-1.ii.C for discussion of
the definition of ``affiliate.''
D. A creditor satisfies the criterion in Sec.
1026.35(b)(2)(iii)(C) for purposes of any higher-priced mortgage
loan consummated during 2016, for example, if the creditor (together
with its affiliates that regularly extended first-lien covered
transactions) had total assets of less than the applicable asset
threshold on December 31, 2015. A creditor that (together with its
affiliates that regularly extended first-lien covered transactions)
did not meet the applicable asset threshold on December 31, 2015
satisfies this criterion for a higher-priced mortgage loan
consummated during 2016 if the application for the loan was received
before April 1, 2016 and the creditor (together with its affiliates
that regularly extended first-lien covered transactions) had total
assets of less than the applicable asset threshold on December 31,
2014.
E. Under Sec. 1026.35(b)(2)(iii)(C), the $2,000,000,000 asset
threshold adjusts automatically each year based on the year-to-year
change in the average of the Consumer Price Index for Urban Wage
Earners and Clerical Workers, not seasonally adjusted, for each 12-
month period ending in November, with rounding to the nearest
million dollars. The Bureau will publish notice of the asset
threshold each year by amending this comment. For calendar year
2019, the asset threshold is $2,167,000,000. A creditor that
together with the assets of its affiliates that regularly extended
first-lien covered transactions during calendar year 2018 has total
assets of less than $2,167,000,000 on December 31, 2018, satisfies
this criterion for purposes of any loan consummated in 2019 and for
purposes of any loan consummated in 2020 for which the application
was received before April 1, 2020. For historical purposes:
1. For calendar year 2013, the asset threshold was
$2,000,000,000. Creditors that had total assets of less than
$2,000,000,000 on December 31, 2012, satisfied this criterion for
purposes of the exemption during 2013.
2. For calendar year 2014, the asset threshold was
$2,028,000,000. Creditors that had total assets of less than
$2,028,000,000 on December 31, 2013, satisfied this criterion for
purposes of the exemption during 2014.
3. For calendar year 2015, the asset threshold was
$2,060,000,000. Creditors that had total assets of less than
$2,060,000,000 on December 31, 2014, satisfied this criterion for
purposes of any loan consummated in 2015 and, if the creditor's
assets together with the assets of its affiliates that regularly
extended first-lien covered transactions during calendar year 2014
were less than that amount, for purposes of any loan consummated in
2016 for which the application was received before April 1, 2016.
4. For calendar year 2016, the asset threshold was
$2,052,000,000. A creditor that together with the assets of its
affiliates that regularly extended first-lien covered transactions
during calendar year 2015 had total assets of less than
$2,052,000,000 on December 31, 2015, satisfied this criterion for
purposes of any loan consummated in 2016 and for purposes of any
loan consummated in 2017 for which the application was received
before April 1, 2017.
5. For calendar year 2017, the asset threshold was
$2,069,000,000. A creditor that together with the assets of its
affiliates that regularly extended first-lien covered transactions
during calendar year 2016 had total assets of less than
$2,069,000,000 on December 31, 2016, satisfied this criterion for
purposes of any loan consummated in 2017 and for purposes of any
loan consummated in 2018 for which the application was received
before April 1, 2018.
6. For calendar year 2018, the asset threshold was
$2,112,000,000. A creditor that together with the assets of its
affiliates that regularly extended first-lien covered transactions
during calendar year 2017 had total assets of less than
$2,112,000,000 on December 31, 2017, satisfied this criterion for
purposes of any loan consummated in 2018 and for purposes of any
loan consummated in 2019 for which the application was received
before April 1, 2019.
iv. The creditor and its affiliates do not maintain an escrow
account for any mortgage transaction being serviced by the creditor
or its affiliate at the time the transaction is consummated, except
as provided in Sec. 1026.35(b)(2)(iii)(D)(1) and (2). Thus, the
exemption applies, provided the other conditions of Sec.
1026.35(b)(2)(iii) are satisfied, even if the creditor previously
maintained escrow accounts for mortgage loans, provided it no longer
maintains any such accounts except as provided in Sec.
1026.35(b)(2)(iii)(D)(1) and (2). Once a creditor or its affiliate
begins escrowing for loans currently serviced other than those
addressed in Sec. 1026.35(b)(2)(iii)(D)(1) and (2), however, the
creditor and its affiliate become ineligible for the exemption in
Sec. 1026.35(b)(2)(iii) on higher-priced mortgage loans they make
while such escrowing continues. Thus, as long as a creditor (or its
affiliate) services and maintains escrow accounts for any mortgage
loans, other than as provided in Sec. 1026.35(b)(2)(iii)(D)(1) and
(2), the creditor will not be eligible for the exemption for any
higher-priced mortgage loan it may make. For purposes of Sec.
1026.35(b)(2)(iii), a creditor or its affiliate ``maintains'' an
escrow account only if it services a mortgage loan for which an
escrow account has been established at least through the due date of
the second periodic payment under the terms of the legal obligation.
* * * * *
[[Page 1359]]
Dated: December 20, 2018.
Kathleen Kraninger,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2018-28374 Filed 1-31-19; 4:15 pm]
BILLING CODE 4810-AM-P
