Federal Register / Vol. 79, No. 248 / Monday, December 29, 2014 / Rules and Regulations 77855 

it provided for annual adjustments 

thereafter based on the annual 

percentage increase in the CPI–W, 

rounded to the nearest multiple of $1 

million dollars. 

The definition of ‘‘financial 

institution’’ in Regulation C provides 

that the Bureau will adjust the asset 

threshold based on the year-to-year 

change in the average of the CPI–W, not 

seasonally adjusted, for each 12-month 

period ending in November, rounded to 

the nearest million. 12 CFR 1003.2. For 

2014, the threshold was $43 million. 

During the 12-month period ending in 

November 2014, the average of the CPI– 

W increased by 1.1 percent. As a result, 

the exemption threshold is increased to 

$44 million. Thus, banks, savings 

associations, and credit unions with 

assets of $44 million or less as of 

December 31, 2014, are exempt from 

collecting data in 2015. An institution’s 

exemption from collecting data in 2015 

does not affect its responsibility to 

report data it was required to collect in 

2014. 

II. Procedural Requirements 

A. Administrative Procedure Act 

Under the Administrative Procedure 

Act (APA), notice and opportunity for 

public comment are not required if the 

Bureau finds that notice and public 

comment are impracticable, 

unnecessary, or contrary to the public 

interest. 5 U.S.C. 553(b)(B). Pursuant to 

this final rule, comment 1003.2 

(Financial institution)-2 in Regulation C, 

supplement I is amended to update the 

exemption threshold. The amendment 

in this final rule is technical and 

nondiscretionary, and it merely applies 

the formula established by Regulation C 

for determining any adjustments to the 

exemption threshold. For these reasons, 

the Bureau has determined that 

publishing a notice of proposed 

rulemaking and providing opportunity 

for public comment are unnecessary. 

Therefore, the amendment is adopted in 

final form. 

Section 553(d) of the APA generally 

requires publication of a final rule not 

less than 30 days before its effective 

date, except for (1) a substantive rule 

which grants or recognizes an 

exemption or relieves a restriction; (2) 

interpretive rules and statements of 

policy; or (3) as otherwise provided by 

the agency for good cause found and 

published with the rule. 5 U.S.C. 553(d). 

At a minimum, the Bureau believes the 

amendments fall under the third 

exception to section 553(d). The Bureau 

finds that there is good cause to make 

the amendments effective on January 1, 

2015. The amendment in this final rule 

is technical and non-discretionary, and 

it applies the method previously 

established in the agency’s regulations 

for determining adjustments to the 

threshold. 

B. Regulatory Flexibility Act 

Because no notice of proposed 

rulemaking is required, the Regulatory 

Flexibility Act does not require an 

initial or final regulatory flexibility 

analysis. 5 U.S.C. 603(a), 604(a). 

C. Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3506; 

5 CFR 1320), the agency reviewed this 

final rule. No collections of information 

pursuant to the Paperwork Reduction 

Act are contained in the final rule. 

List of Subjects in 12 CFR Part 1003 

Banking, Banks, Credit unions, 

Mortgages, National banks, Reporting 

and recordkeeping requirements, 

Savings associations. 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Bureau amends 

Regulation C, 12 CFR part 1003, as set 

forth below: 

PART 1003—HOME MORTGAGE 

DISCLOSURE (REGULATION C) 

■ 1. The authority citation for part 1003 

continues to read as follows: 

Authority: 12 U.S.C. 2803, 2804, 2805, 

5512, 5581. 

■ 2. In Supplement I to Part 1003, under 

Section 1003.2—Definitions, under the 

definition ‘‘Financial institution’’, 

paragraph 2 is revised to read as 

follows: 

Supplement I to Part 1003—Staff 

Commentary 

* * * * * 

Section 1003.2—Definitions 

* * * * * 

Financial institution. 

* * * * * 

2. Adjustment of exemption threshold for 

banks, savings associations, and credit 

unions. For data collection in 2015, the assetsize exemption threshold is $44 million. 

Banks, savings associations, and credit 

unions with assets at or below $44 million 

as of December 31, 2014, are exempt from 

collecting data for 2015. 

* * * * * 

Dated: December 15, 2014. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2014–30404 Filed 12–24–14; 8:45 am] 

BILLING CODE 4810–AM–P 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1026 

Truth in Lending Act (Regulation Z) 

Adjustment to Asset-Size Exemption 

Threshold 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Final rule; official 

interpretation. 

SUMMARY: The Bureau is amending the 

official commentary that interprets the 

requirements of the Bureau’s Regulation 

Z (Truth in Lending) to reflect a change 

in the asset size threshold for certain 

creditors to qualify for an exemption to 

the requirement to establish an escrow 

account for a higher-priced mortgage 

loan based on the annual percentage 

change in the average of the Consumer 

Price Index for Urban Wage Earners and 

Clerical Workers (CPI–W) for the 12- 

month period ending in November. The 

exemption threshold is adjusted to 

increase to $2.060 billion from $2.028 

billion. The adjustment is based on the 

1.1 percent increase in the average of 

the CPI–W for the 12-month period 

ending in November 2014. Therefore, 

creditors with assets of $2.060 billion or 

less as of December 31, 2014, are 

exempt, if other requirements of 

Regulation Z also are met, from 

establishing escrow accounts for higherpriced mortgage loans in 2015. The 

adjustment to the escrows exemption 

asset-size threshold will also increase a 

similar threshold for small-creditor 

portfolio and balloon-payment qualified 

mortgages. Balloon-payment qualified 

mortgages that satisfy all applicable 

criteria, including being made by 

creditors that do not exceed the assetsize threshold, are also excepted from 

the prohibition on balloon payments for 

high-cost mortgages. 

DATES: This final rule is effective 

January 1, 2015. 

FOR FURTHER INFORMATION CONTACT: 

James Wylie, Counsel, Office of 

Regulations, at (202) 435–7700. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Dodd-Frank Wall Street Reform 

and Consumer Protection Act (DoddFrank Act) amended TILA section 

129D(a) to contain a general 

requirement that an escrow account be 

established by a creditor to pay for 

property taxes and insurance premiums 

for certain first-lien higher-priced 

mortgage loan transactions. Section 

1461 of the Dodd-Frank Act also 

generally permits an exemption from 

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77856 Federal Register / Vol. 79, No. 248 / Monday, December 29, 2014 / Rules and Regulations 

1 78 FR 4726 (Jan. 22, 2013). 

2See 12 CFR 1026.35(b)(2)(iii)(C). 

the higher-priced mortgage loan escrow 

requirement for a creditor that: (1) 

Operates predominantly in rural or 

underserved areas; (2) together with all 

affiliates, has total annual mortgage loan 

originations that do not exceed a limit 

set by the Bureau; (3) retains its 

mortgage obligations in portfolio; and 

(4) meets any asset-size threshold and 

any other criteria as the Bureau may 

establish. 

In the 2013 Escrows Final Rule,1 the 

Bureau established such an asset-size 

threshold of $2,000,000,000, which 

would adjust automatically each year, 

based on the year-to-year change in the 

average of the CPI–W for each 12-month 

period ending in November, with 

rounding to the nearest million dollars.2

For 2014, the threshold was $2.028 

billion. During the 12-month period 

ending in November 2014, the average 

of the CPI–W increased by 1.1 percent. 

As a result, the exemption threshold is 

increased to $2.060 billion for 2015. 

Thus, loans made by creditors with total 

assets of less than $2.060 billion as of 

December 31, 2014, that meet the other 

requirements of 12 CFR 

1026.35(b)(2)(iii) will be exempt in 2015 

from the escrow-accounts requirement 

for higher-priced mortgage loans. 

The adjustment to the escrows 

exemption asset-size threshold will also 

increase the threshold for small-creditor 

portfolio and balloon-payment qualified 

mortgages under Regulation Z. The 

requirements for small-creditor portfolio 

qualified mortgages at 12 CFR 

1026.43(e)(5)(i)(D) reference the asset 

threshold in 12 CFR 

1026.35(b)(2)(iii)(C). Likewise, the 

requirements for balloon-payment 

qualified mortgages at 12 CFR 

1026.43(f)(1)(vi) references the asset 

threshold in 12 CFR 

1026.35(b)(2)(iii)(C). Balloon-payment 

qualified mortgages that satisfy all 

applicable criteria in §§ 1026.43(f)(1)(i) 

through (vi) and 1026.43(f)(2), or the 

conditions set forth in § 1026.43(e)(6), 

including being made by creditors that 

do not exceed the asset threshold in 12 

CFR 1026.35(b)(2)(iii)(C), are also 

excepted from the prohibition on 

balloon payments for high-cost 

mortgages in 12 CFR 

1026.32(d)(1)(ii)(C). 

II. Procedural Requirements 

A. Administrative Procedure Act 

Under the Administrative Procedure 

Act (APA), notice and opportunity for 

public comment are not required if the 

Bureau finds that notice and public 

comment are impracticable, 

unnecessary, or contrary to the public 

interest. 5 U.S.C. 553(b)(B). Pursuant to 

this final rule, comment 35(b)(2)(iii)–1 

in Regulation Z is amended to update 

the exemption threshold. The 

amendment in this final rule is 

technical and nondiscretionary, and it 

merely applies the formula previously 

established in Regulation Z for 

determining any adjustments to the 

exemption threshold. For these reasons, 

the Bureau has determined that 

publishing a notice of proposed 

rulemaking and providing opportunity 

for public comment are unnecessary. 

Therefore, the amendment is adopted in 

final form. 

Section 553(d) of the APA generally 

requires publication of a final rule not 

less than 30 days before its effective 

date, except for (1) a substantive rule 

which grants or recognizes an 

exemption or relieves a restriction; (2) 

interpretive rules and statements of 

policy; or (3) as otherwise provided by 

the agency for good cause found and 

published with the rule. 5 U.S.C. 553(d). 

At a minimum, the Bureau believes the 

amendments fall under the third 

exception to section 553(d). The Bureau 

finds that there is good cause to make 

the amendments effective on January 1, 

2015. The amendment in this notice is 

technical and non-discretionary, and it 

applies the method previously 

established in the agency’s regulations 

for automatic adjustments to the 

threshold. 

B. Regulatory Flexibility Act 

Because no notice of proposed 

rulemaking is required, the Regulatory 

Flexibility Act does not require an 

initial or final regulatory flexibility 

analysis. 5 U.S.C. 603(a), 604(a). 

C. Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3506; 

5 CFR 1320), the agency reviewed this 

final rule. No collections of information 

pursuant to the Paperwork Reduction 

Act are contained in the final rule. 

List of Subjects in 12 CFR Part 1026 

Advertising, Consumer protection, 

Credit, Credit unions, Mortgages, 

National banks, Reporting and 

recordkeeping requirements, Savings 

associations, Truth in lending. 

Authority and Issuance 

For the reasons set forth in the 

preamble, the Bureau amends 

Regulation Z, 12 CFR part 1026, as set 

forth below: 

PART 1026—TRUTH IN LENDING 

(REGULATION Z) 

■ 1. The authority citation for part 1026 

continues to read as follows: 

Authority: 12 U.S.C. 2601, 2603–2605, 

2607, 2609, 2617, 5511, 5512, 5532, 5581; 15 

U.S.C. 1601 et seq. 

■ 2. In Supplement I to Part 1026— 

Official Interpretations, under Section 

1026.35—Requirements for HigherPriced Mortgage Loans, 35(b)(2) 

Exemptions, Paragraph 35(b)(2)(iii), 

paragraph 1.iii is revised to read as 

follows: 

SUPPLEMENT I TO PART 1026— 

OFFICIAL INTERPRETATIONS 

* * * * * 

Subpart E—Special Rules for Certain Home 

Mortgage Transactions 

* * * * * 

Section 1026.35—Requirements for HigherPriced Mortgage Loans 

* * * * * 

35(b)(2) Exemptions 

* * * * * 

Paragraph 35(b)(2)(iii) 

1. Requirements for exemption. * * * 

* * * * * 

iii. As of the end of the preceding calendar 

year, the creditor had total assets that are less 

than the asset threshold for the relevant 

calendar year. For calendar year 2015, the 

asset threshold is $2,060,000,000. Creditors 

that had total assets of less than 

$2,060,000,000 on December 31, 2014, satisfy 

this criterion for purposes of the exemption 

during 2015. This asset threshold shall adjust 

automatically each year based on the year-toyear change in the average of the Consumer 

Price Index for Urban Wage Earners and 

Clerical Workers, not seasonally adjusted, for 

each 12-month period ending in November, 

with rounding to the nearest million dollars. 

The Bureau will publish notice of the asset 

threshold each year by amending this 

comment. For historical purposes, the prior 

asset thresholds were: 

A. For calendar year 2013, the asset 

threshold was $2,000,000,000. Creditors that 

had total assets of less than $2,000,000,000 

on December 31, 2012, satisfied this criterion 

for purposes of the exemption during 2013. 

B. For calendar year 2014, the asset 

threshold was $2,028,000,000. Creditors that 

had total assets of less than $2,028,000,000 

on December 31, 2013, satisfied this criterion 

for purposes of the exemption during 2014. 

* * * * * 

Dated: December 15, 2014. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2014–30405 Filed 12–24–14; 8:45 am] 

BILLING CODE 4810–AM–P 

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