This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents.

Rules and Regulations Federal Register

88221 

Vol. 88, No. 244 

Thursday, December 21, 2023 

1 12 U.S.C. 2801–2810. 

2 12 CFR part 1003. 

3 12 U.S.C. 2808(b). 

4 5 U.S.C. 553(b)(B). 

5 5 U.S.C. 553(d). 

6 5 U.S.C. 603(a), 604(a). 

7 44 U.S.C. 3506; 5 CFR part 1320. 

CONSUMER FINANCIAL PROTECTION 

BUREAU 

12 CFR Part 1003 

Home Mortgage Disclosure 

(Regulation C) Adjustment to AssetSize Exemption Threshold 

AGENCY: Consumer Financial Protection 

Bureau. 

ACTION: Final rule; official 

interpretation. 

SUMMARY: The Consumer Financial 

Protection Bureau (CFPB) is amending 

the official commentary that interprets 

the requirements of the CFPB’s 

Regulation C (Home Mortgage 

Disclosure) to reflect the asset-size 

exemption threshold for banks, savings 

associations, and credit unions based on 

the annual percentage change in the 

average of the Consumer Price Index for 

Urban Wage Earners and Clerical 

Workers (CPI–W). Based on the 4.1 

percent increase in the average of the 

CPI–W for the 12-month period ending 

in November 2023, the exemption 

threshold is adjusted to $56 million 

from $54 million. Therefore, banks, 

savings associations, and credit unions 

with assets of $56 million or less as of 

December 31, 2023, are exempt from 

collecting data in 2024. 

DATES: This rule is effective on January 

1, 2024. 

FOR FURTHER INFORMATION CONTACT: 

Anna Boadwee and Adrien Fernandez, 

Attorney-Advisors, Office of 

Regulations, at (202) 435–7700. If you 

require this document in an alternative 

electronic format, please contact CFPB_

Accessibility@cfpb.gov. 

SUPPLEMENTARY INFORMATION: The CFPB 

is amending Regulation C, which 

implements the Home Mortgage 

Disclosure Act of 1975 (HMDA) asset 

thresholds, to establish the asset-sized 

exemption threshold for depository 

financial institution for 2024. The asset 

threshold will be $56 million for 2024. 

I. Background 

HMDA requires most mortgage 

lenders located in metropolitan areas to 

collect data about their housing-related 

lending activity.1 Annually, lenders 

must report their data to the appropriate 

Federal agencies and make the data 

available to the public. The CFPB’s 

Regulation C implements HMDA.2

Prior to 1997, HMDA exempted 

certain depository institutions as 

defined in HMDA (i.e., banks, savings 

associations, and credit unions) with 

assets totaling $10 million or less as of 

the preceding year-end. In 1996, HMDA 

was amended to expand the asset-size 

exemption for these depository 

institutions.3 The amendment increased 

the dollar amount of the asset-size 

exemption threshold by requiring a onetime adjustment of the $10 million 

figure based on the percentage by which 

the CPI–W for 1996 exceeded the CPI– 

W for 1975, and it provided for annual 

adjustments thereafter based on the 

annual percentage increase in the CPI– 

W, rounded to the nearest multiple of $1 

million. 

The definition of ‘‘financial 

institution’’ in § 1003.2(g) provides that 

the CFPB 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 $1 million. For 2023, the 

threshold was $54 million. During the 

12-month period ending in November 

2023, the average of the CPI–W 

increased by 4.1 percent. As a result, the 

exemption threshold is increased to $56 

million for 2024. Thus, banks, savings 

associations, and credit unions with 

assets of $56 million or less as of 

December 31, 2023, are exempt from 

collecting data in 2024. An institution’s 

exemption from collecting data in 2024 

does not affect its responsibility to 

report data it was required to collect in 

2023. 

II. Procedural Requirements 

A. Administrative Procedure Act 

Under the Administrative Procedure 

Act (APA), notice and opportunity for 

public comment are not required if the 

CFPB finds that notice and opportunity 

for public comment are impracticable, 

unnecessary, or contrary to the public 

interest.4 Pursuant to this final rule, 

comment 2(g)–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 CFPB 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 in the case of (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 At 

a minimum, the CFPB has determined 

that the amendments fall under the 

third exception to section 553(d). The 

CFPB finds that there is good cause to 

make the amendments effective on 

January 1, 2024. The amendment in this 

final rule is technical and nondiscretionary, and it applies the method 

previously established in the agency’s 

regulations for determining adjustments 

to the threshold. 

B. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

does not apply to a rulemaking where a 

general notice of proposed rulemaking 

is not required.6 As noted previously, 

the CFPB has determined that it is 

unnecessary to publish a general notice 

of proposed rulemaking for this final 

rule. Accordingly, the RFA’s 

requirement relating to an initial and 

final regulatory flexibility analysis does 

not apply. 

C. Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995,7 the CFPB 

reviewed this final rule. The CFPB has 

determined that this rule does not create 

any new information collections or 


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88222 Federal Register / Vol. 88, No. 244 / Thursday, December 21, 2023 / Rules and Regulations 

8 5 U.S.C. 801 et seq. 

substantially revise any existing 

collections. 

D. Congressional Review Act 

Pursuant to the Congressional Review 

Act, the CFPB will submit a report 

containing this rule and other required 

information to the United States Senate, 

the United States House of 

Representatives, and the Comptroller 

General of the United States prior to the 

rule taking effect.8 The Office of 

Information and Regulatory Affairs 

(OIRA) has designated this rule as not 

a ‘‘major rule’’ as defined by 5 U.S.C. 

804(2). 

List of Subjects in 12 CFR Part 1003 

Banks, banking, Credit unions, 

Mortgages, National banks, Reporting 

and recordkeeping requirements, 

Savings associations. 

Authority and Issuance 

For the reasons set forth above, the 

CFPB 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. Supplement I to part 1003 is 

amended under the heading Section 

1003.2—Definitions by revising 

paragraph 2(g) Financial Institution to 

read as follows: 

Supplement I to Part 1003—Official 

Interpretations 

* * * * * 

Section 1003.2—Definitions 

* * * * * 

2(g) Financial Institution 

1. Preceding calendar year and 

preceding December 31. The definition 

of financial institution refers both to the 

preceding calendar year and the 

preceding December 31. These terms 

refer to the calendar year and the 

December 31 preceding the current 

calendar year. For example, in 2019, the 

preceding calendar year is 2018 and the 

preceding December 31 is December 31, 

2018. Accordingly, in 2019, Financial 

Institution A satisfies the asset-size 

threshold described in § 1003.2(g)(1)(i) 

if its assets exceeded the threshold 

specified in comment 2(g)–2 on 

December 31, 2018. Likewise, in 2020, 

Financial Institution A does not meet 

the loan-volume test described in 

§ 1003.2(g)(1)(v)(A) if it originated fewer 

than 25 closed-end mortgage loans 

during either 2018 or 2019. 

2. Adjustment of exemption threshold 

for banks, savings associations, and 

credit unions. For data collection in 

2024, the asset-size exemption threshold 

is $56 million. Banks, savings 

associations, and credit unions with 

assets at or below $56 million as of 

December 31, 2023, are exempt from 

collecting data for 2024. 

3. Merger or acquisition—coverage of 

surviving or newly formed institution. 

After a merger or acquisition, the 

surviving or newly formed institution is 

a financial institution under § 1003.2(g) 

if it, considering the combined assets, 

location, and lending activity of the 

surviving or newly formed institution 

and the merged or acquired institutions 

or acquired branches, satisfies the 

criteria included in § 1003.2(g). For 

example, A and B merge. The surviving 

or newly formed institution meets the 

loan threshold described in 

§ 1003.2(g)(1)(v)(B) if the surviving or 

newly formed institution, A, and B 

originated a combined total of at least 

200 open-end lines of credit in each of 

the two preceding calendar years. 

Likewise, the surviving or newly formed 

institution meets the asset-size 

threshold in § 1003.2(g)(1)(i) if its assets 

and the combined assets of A and B on 

December 31 of the preceding calendar 

year exceeded the threshold described 

in § 1003.2(g)(1)(i). Comment 2(g)–4 

discusses a financial institution’s 

responsibilities during the calendar year 

of a merger. 

4. Merger or acquisition—coverage for 

calendar year of merger or acquisition. 

The scenarios described below illustrate 

a financial institution’s responsibilities 

for the calendar year of a merger or 

acquisition. For purposes of these 

illustrations, a ‘‘covered institution’’ 

means a financial institution, as defined 

in § 1003.2(g), that is not exempt from 

reporting under § 1003.3(a), and ‘‘an 

institution that is not covered’’ means 

either an institution that is not a 

financial institution, as defined in 

§ 1003.2(g), or an institution that is 

exempt from reporting under 

§ 1003.3(a). 

i. Two institutions that are not 

covered merge. The surviving or newly 

formed institution meets all of the 

requirements necessary to be a covered 

institution. No data collection is 

required for the calendar year of the 

merger (even though the merger creates 

an institution that meets all of the 

requirements necessary to be a covered 

institution). When a branch office of an 

institution that is not covered is 

acquired by another institution that is 

not covered, and the acquisition results 

in a covered institution, no data 

collection is required for the calendar 

year of the acquisition. 

ii. A covered institution and an 

institution that is not covered merge. 

The covered institution is the surviving 

institution, or a new covered institution 

is formed. For the calendar year of the 

merger, data collection is required for 

covered loans and applications handled 

in the offices of the merged institution 

that was previously covered and is 

optional for covered loans and 

applications handled in offices of the 

merged institution that was previously 

not covered. When a covered institution 

acquires a branch office of an institution 

that is not covered, data collection is 

optional for covered loans and 

applications handled by the acquired 

branch office for the calendar year of the 

acquisition. 

iii. A covered institution and an 

institution that is not covered merge. 

The institution that is not covered is the 

surviving institution, or a new 

institution that is not covered is formed. 

For the calendar year of the merger, data 

collection is required for covered loans 

and applications handled in offices of 

the previously covered institution that 

took place prior to the merger. After the 

merger date, data collection is optional 

for covered loans and applications 

handled in the offices of the institution 

that was previously covered. When an 

institution remains not covered after 

acquiring a branch office of a covered 

institution, data collection is required 

for transactions of the acquired branch 

office that take place prior to the 

acquisition. Data collection by the 

acquired branch office is optional for 

transactions taking place in the 

remainder of the calendar year after the 

acquisition. 

iv. Two covered institutions merge. 

The surviving or newly formed 

institution is a covered institution. Data 

collection is required for the entire 

calendar year of the merger. The 

surviving or newly formed institution 

files either a consolidated submission or 

separate submissions for that calendar 

year. When a covered institution 

acquires a branch office of a covered 

institution, data collection is required 

for the entire calendar year of the 

merger. Data for the acquired branch 

office may be submitted by either 

institution. 

5. Originations. Whether an 

institution is a financial institution 

depends in part on whether the 

institution originated at least 25 closedend mortgage loans in each of the two 

preceding calendar years or at least 200 

open-end lines of credit in each of the 

two preceding calendar years. 


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Federal Register / Vol. 88, No. 244 / Thursday, December 21, 2023 / Rules and Regulations 88223 

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

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

3See 80 FR 59943, 59951 (Oct. 2, 2015). The 

CFPB also issued an interim final rule in March 

2016 to revise certain provisions in Regulation Z to 

effectuate the Helping Expand Lending Practices in 

Rural Communities Act’s amendments to TILA 

(Pub. L. 114–94, sec. 89003, 129 Stat. 1312, 1800– 

01 (2015)). The rule broadened the cohort of 

creditors that may be eligible under TILA for the 

special provisions allowing origination of balloonpayment qualified mortgages and balloon-payment 

high-cost mortgages, as well as for the escrow 

exemption. See 81 FR 16074 (Mar. 25, 2016). 

4Numbers may not multiply to totals shown 

because of rounding. 

Comments 4(a)–2 through –4 discuss 

whether activities with respect to a 

particular closed-end mortgage loan or 

open-end line of credit constitute an 

origination for purposes of § 1003.2(g). 

6. Branches of foreign banks—treated 

as banks. A Federal branch or a Statelicensed or insured branch of a foreign 

bank that meets the definition of a 

‘‘bank’’ under section 3(a)(1) of the 

Federal Deposit Insurance Act (12 

U.S.C. 1813(a)) is a bank for the 

purposes of § 1003.2(g). 

7. Branches and offices of foreign 

banks and other entities—treated as 

nondepository financial institutions. A 

Federal agency, State-licensed agency, 

State-licensed uninsured branch of a 

foreign bank, commercial lending 

company owned or controlled by a 

foreign bank, or entity operating under 

section 25 or 25A of the Federal Reserve 

Act, 12 U.S.C. 601 and 611 (Edge Act 

and agreement corporations) may not 

meet the definition of ‘‘bank’’ under the 

Federal Deposit Insurance Act and may 

thereby fail to satisfy the definition of a 

depository financial institution under 

§ 1003.2(g)(1). An entity is nonetheless 

a financial institution if it meets the 

definition of nondepository financial 

institution under § 1003.2(g)(2). 

* * * * * 

Brian Shearer, 

Senior Advisor, Consumer Financial 

Protection Bureau. 

[FR Doc. 2023–28079 Filed 12–20–23; 8:45 am] 

BILLING CODE 4810–AM–P 

CONSUMER FINANCIAL PROTECTION 

BUREAU 

12 CFR Part 1026 

Truth in Lending Act (Regulation Z) 

Adjustment to Asset-Size Exemption 

Threshold 

AGENCY: Consumer Financial Protection 

Bureau. 

ACTION: Final rule; official 

interpretation. 

SUMMARY: The Consumer Financial 

Protection Bureau (CFPB) is amending 

the official commentary to its 

Regulation Z in order to make annual 

adjustments to the asset-size thresholds 

exempting certain creditors from the 

requirement to establish an escrow 

account for a higher-priced mortgage 

loan (HPML). These changes reflect 

updates to the exemption from the 

escrow requirement in the Truth in 

Lending Act (TILA) for creditors that, 

together with their affiliates that 

regularly extended covered transactions 

secured by first liens, had total assets of 

less than $2 billion (adjusted annually 

for inflation). They also reflect updates 

to the exemption the CFPB added, by 

implementing section 108 of the 

Economic Growth, Regulatory Relief, 

and Consumer Protection Act 

(EGRRCPA), for certain insured 

depository institutions and insured 

credit unions with assets of $10 billion 

or less (adjusted annually for inflation). 

These amendments are based on the 

annual percentage change in the average 

of the Consumer Price Index for Urban 

Wage Earners and Clerical Workers 

(CPI–W). Based on the 4.1 percent 

increase in the average of the CPI–W for 

the 12-month period ending in 

November 2023, the exemption 

threshold for creditors and their 

affiliates that regularly extended 

covered transactions secured by first 

liens is adjusted to $2.640 billion from 

$2.537 billion and the exemption 

threshold for certain insured depository 

institutions and insured credit unions 

with assets of $10 billion or less is 

adjusted to $11.835 billion from $11.374 

billion. 

DATES: This rule is effective on January 

1, 2024. 

FOR FURTHER INFORMATION CONTACT: 

Anna Boadwee and Adrien Fernandez, 

Attorney-Advisors, Office of 

Regulations, at (202) 435–7700. If you 

require this document in an alternative 

electronic format, please contact CFPB_

Accessibility@cfpb.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 129D of TILA generally 

requires creditors to establish escrow 

accounts for certain first-lien higherpriced mortgage loan transactions. 

However, TILA section 129D also 

permits the CFPB to exempt creditors 

from this higher-priced mortgage loan 

escrow requirement if they meet certain 

requirements, including any asset-size 

threshold that the CFPB may establish. 

In the 2013 Escrows Final Rule,1 the 

CFPB established an asset-size threshold 

of $2 billion, 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 In 2015, the 

CFPB revised the asset-size threshold 

for small creditors and how it applies. 

The CFPB included in the calculation of 

the asset-size threshold the assets of the 

creditor’s affiliates that regularly 

extended covered transactions secured 

by first liens during the applicable 

period and added a grace period to 

allow an otherwise eligible creditor that 

exceeded the asset limit in the 

preceding calendar year (but not in the 

calendar year before the preceding year) 

to continue to operate as a small 

creditor with respect to transactions 

with applications received before April 

1 of the current calendar year.3 For 

2023, the threshold was $2.537 billion. 

During the 12-month period ending in 

November 2023, the average of the CPI– 

W increased by 4.1 percent. As a result, 

the exemption threshold is increased to 

$2.640 billion for 2024.4 Thus, if the 

creditor’s assets together with the assets 

of its affiliates that regularly extended 

first-lien covered transactions during 

calendar year 2023 are less than $2.640 

billion on December 31, 2023, and it 

meets the other requirements of 

§ 1026.35(b)(2)(iii), the creditor will be 

exempt from the escrow-accounts 

requirement for higher-priced mortgage 

loans in 2024 and will also be exempt 

from the escrow-accounts requirement 

for higher-priced mortgage loans for 

purposes of any loan consummated in 

2025 with applications received before 

April 1, 2025. The adjustment to the 

escrows asset-size exemption threshold 

also will increase the threshold for 

small-creditor portfolio and balloonpayment qualified mortgages under 

Regulation Z. The requirements for 

small-creditor portfolio qualified 

mortgages at § 1026.43(e)(5)(i)(D) 

reference the asset threshold in 

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

requirements for balloon-payment 

qualified mortgages at § 1026.43(f)(1)(vi) 

reference the asset threshold in 

§ 1026.35(b)(2)(iii)(C). Under 

§ 1026.32(d)(1)(ii)(C), balloon-payment 

qualified mortgages that satisfy all 

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

through (vi) and (f)(2), including being 

made by creditors that have (together 

with certain affiliates) total assets below 

the threshold in § 1026.35(b)(2)(iii)(C), 

are also excepted from the prohibition 

on balloon payments for high-cost 

mortgages. 

In the 2018 Economic Growth, 

Regulatory Relief, and Consumer 


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