The Consumer Financial Protection Bureau released a guide stating that the impact on small banks from a new escrow rule for higher-priced mortgages should be minimal.
The CFPB, created under the Dodd-Frank Act, said that smaller lenders are exempt from the rule if "they do not originate more than 500 first-lien loans in the preceding calendar year; and have less than $2 billion of assets. Lenders must also have more than half their portfolio of loans to consumers in rural or underserved counties based on originations of last year," writes American Banker's Rachel Witkowski.
Community bankers continue to argue that the rule will come at a higher cost to their operation despite the CFPB's clarifications and new guide.
"The compliance burden on creditors for maintaining escrow accounts for additional time for loans where no exemptions apply should be minimal," the CFPB said in the guide.
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