HPML Escrow Exemption 2021 Final Rule Summary

Updated 02/18/2021

This tool summarizes the CFPB’s Final Rule amending HPML provisions under Regulation Z by providing a new exemption from the requirement to establish an escrow account. The following are the key takeaways of the exemption:

  1. The exemption applies only to insured institutions.
  2. The exemption has an asset size threshold of $10 billion or less and a loan volume threshold of 1,000 or less originations.
  3. An institution must also meet certain existing criteria to qualify for the new exemption. The first criterion deals with serving rural or underserved areas. The second criterion known as the non-escrow prerequisite states that the institution must not have established escrow accounts subject to two exclusions.
  4. The exclusion to the non-escrow prerequisite that deals with escrow accounts established on or after April 1, 2010 and before May 1, 2016 has been amended with a new end-date as 120 days after this rule is published in the Federal Register.

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