Category: Policy & Compliance

Final list of rural and underserved counties for use in 2013

On June 1, 2013, our Escrow Requirements under the Truth in Lending Act rule (Escrows Rule) will go into effect, which requires certain creditors to create escrow accounts for a minimum of 5 years for higher-priced mortgage loans (HPMLs). The rule exempts HPMLs made by certain small creditors that operate predominantly in rural or underserved counties from this requirement. On March 12, 2013, we posted a preliminary list of counties that are rural or underserved (or both), for use in the second part of 2013. That preliminary list applied the rules for determining both rural and underserved status as those rules would be amended by a proposed rule the Bureau intended at that time to publish.

The CFPB is now issuing the final rule based on the proposed rule that we had used to compile the preliminary list. Because the methods for determining rural and underserved status have not changed from the proposed rule, this final list is identical to the preliminary list we posted on March 12. For purposes of applying the exemption in the Escrows Rule, creditors may rely on this list as a safe harbor to determine whether a county is “rural” or “underserved” for loans made from June 1, 2013, through December 31, 2013.

In our Escrows Rule, rural counties are defined by using the USDA Economic Research Service’s urban influence codes, and underserved counties are defined by reference to data collected under the Home Mortgage Disclosure Act (HMDA). As explained in the rule, the Bureau will post a list of such counties on its website, which we are doing today.

We also have several rules that will that take effect in January 2014 that have provisions related to mortgage loans made in rural or underserved counties.

Some counties’ status as rural or non-rural may change from the 2013 list to the 2014 list because of updated information from the 2010 Census. This updated information is still being analyzed by the Economic Research Service, but we’ll post the 2014 list of rural and underserved counties as soon as possible.

See a full table of the regulatory sections involved.

Due to technical issues, the commenting feature of our blog is temporarily unavailable. We’re working to bring this functionality back, and look forward to hearing your feedback and comments about the CFPB’s work soon.