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MoFo Reenforcement The Enforcement Blog

CFPB, OCC, and Federal Reserve Propose Clarifications to Small Loan Exemption from HPML Appraisal Requirements

Posted in CFPB, Fair Lending, Mortgage, Regulatory Developments

In August 2016, the CFPB, the OCC, and the Board of Governors of the Federal Reserve System (together, the “Agencies”) jointly published in the Federal Register a notice of proposed rulemaking (NPR) to amend the Agencies’ respective regulations exempting certain small loans from the special appraisal requirements that apply to lenders in connection with making higher-priced mortgage loans (HPMLs). Under the current HPML rules, the small loan exemption threshold is adjusted annually based on any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), as calculated and published by the Bureau of Labor Statistics. The NPR proposes specifically to amend the official commentary to HPML rules to clarify how the threshold is calculated when the CPI-W does not increase in a given year.

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