NEWS: The Consumer Financial Protection Bureau (CFPB) has released its annual updates to some regulatory exemption amounts that affect credit unions making mortgage loans:
- The asset-size exemptions for collecting Home Mortgage Disclosure Act (HMDA) data, and
- The asset size limits for lenders to establish HMPL escrow accounts and to be considered “small creditors” under certain provisions of Reg. Z.
HMDA exemption threshold increased
HMDA and the CFPB’s Reg. C require some financial institutions to collect, record, report, and disclose information about their mortgage lending activity. Reg. C applies to credit unions that meet several tests. For example, the credit union is only covered if (among other things) it was of a certain asset size on the preceding Dec. 31. The CFPB has increased that asset size threshold to $58 million for 2025 (up from $56 million in 2024).
Credit unions with assets of $58 million or less as of Dec. 31, 2024, will be exempt from collecting HMDA data in 2025. (A credit union’s exemption from collecting data in 2025 does not affect its duty to report data it was required to collect in 2024.)
For details on HMDA compliance, see The League’s ii Release No. B017 – “Reg. C – Home Mortgage Disclosure Act.”
Reg. Z HPML escrow and “small creditor” thresholds increased
The CFPB also adjusted two thresholds for lenders under certain provisions of Reg. Z (the Truth in Lending regulations).
First, if a higher-priced mortgage loan (HPML) is secured by a first lien on a principal dwelling, then a credit union generally must establish an escrow account for taxes, homeowner’s insurance and other insurance the credit union requires. However, Reg. Z has an exemption from this escrow requirement especially for insured depository institutions, including insured credit unions. A credit union may be exempt if it meets several standards, based on its asset size, mortgage loan volume, lending activity in a rural area or underserved area, and other factors.
Each year, the CFPB adjusts the assets size exemption threshold. For 2025, it is being increased to $12.179 billion, up from $11.835 billion in 2024. As the CFPB explains:
Thus, a creditor that is an insured depository institution or insured credit union that during calendar year 2024 had assets of $12.179 billion or less on December 31, 2024, satisfies this criterion for purposes of any loan consummated in 2025 and for purposes of any loan secured by a first lien on a principal dwelling of a consumer consummated in 2026 for which the application was received before April 1, 2026.
For details, see The League’s ii Release No. B068 – “Reg. Z – Higher-Priced Mortgage Loans.”
Second, the CFPB increased the threshold for small-creditor portfolio and balloon-payment qualified mortgages under Reg. Z. It adjusted the threshold to $2.717 billion for 2025, up from $2.640 billion for 2024. This impacts two sets of rules:
- The ability to repay / qualified mortgage rules, which allow small creditors to make portfolio and balloon payment loans that may be considered “qualified mortgages” (QMs) if the loans meet certain criteria. Please see The League’s ii Release No. B074 – “Reg. Z – Ability-to-Repay / Qualified Mortgage Rule” for more information.
- The high-cost mortgage rules required by the Home Ownership and Equity Protection Act (HOEPA), which prohibit balloon payments on high-cost mortgage loans but make an exemption for small creditors, as explained in The League’s ii Release No. B062 – “High-Cost Mortgage Loans Under HOEPA.“