Final Escrow Rule & Rural and Underserved Counties List

The CFPB has released a Final Rule providing technical corrections and clarifications to the previously issued Diane11Final HPML Escrow Rule, which is effective June 1st.

The Final Rule provides clarification on determining a county’s rural or underserved status and “restores” the HPML ability to repay requirements and prepayment penalty restrictions to §1026.35 as of June 1st through January 9, 2014.  Similar requirements and restrictions will then be incorporated into other sections.

While the CFPB intends for creditors to make the rural and/or underserved designation, we’re guessing most will rely on the CFPB’s list as a safe harbor.  The only time we see a creditor not being able to rely on the CFPB list is in the case of a new county.  The CFPB clarifies in this final rule that new counties may be considered rural only if all the land making up the new county comes from previously designated rural counties.  The Rule also clarifies that in determining underserved status, an institution can rely on the most recent HMDA data available.

In addition, a final list of counties deemed to be rural or underserved has been published by the CFPB.  This final list appears identical to the preliminary list previously released.  The CFPB has indicated that any updates as a result of the 2010 census will be reflected in the 2014 list.  Essentially, there were no unanticipated changes with this final rule, so on to June 1st!

Diane Dean

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