Truth in Lending Act (Regulation Z) Adjustment to Asset-Size Exemption Threshold

The Bureau of Consumer Financial Protection has announced in the Federal Register the threshold adjustment outlined in regulation Z with regard to the establishment of mandatory escrow accounts for higher priced mortgage loans. In detail, creditors must establish an escrow account to set aside money for insurance premiums and property tax payments for higher priced mortgage loans, if their total assets at year end prior to the collection period exceed the limit amount which represents the „threshold“. This threshold gets adjusted yearly to reflect the general increase in the consumer price index (CPI). The new asset threshold will be set at $2.640 billion or less as of December 31, 2023. This means that creditors having assets worth less than this amount at year end 2023 are exempt from having to establish the escrow accounts in 2024.
An adjustment is also made to the exemption threshold for insured depository institutions and insured credit unions with assets of $10 billion or less whose thresholds will be adjusted to $11.835 billion from $11.374 billion. Consequently, the Bureau is amending Statutory Instrument 12 CFR Part 1026, Supplement I accordingly.