Summaries outline CLF rule, HPML exemptions

(April 2, 2021) Two new summaries – of a interim final rule concerning enhancements to NCUA’s Central Liquidity Facility (CLF) and of an NCUA “regulatory alert” on CFPB’s expanded exemptions concerning higher-priced mortgage loans (HMPLs) – were published by NASCUS this week.

As a benefit of membership, only members have access to the summaries.

Regarding the CLF enhancements, the NCUA Board approved the interim final rule (IFR) at its meeting March 18. Generally, it extends provisions enacted under the 2020 Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that expanded CLF access beyond natural person credit unions to include access for corporate credit unions or a group of corporates. That expansion, implemented under an interim rule a year ago, was due to expire Dec. 31, 2020, but was extended through Dec. 31, 2021, under the Consolidated Appropriations Act, 2021, enacted into law late last year. Also extended are provisions approved in April governing CLF capital stock subscriptions by agent members.

The IFR also extends and clarifies the regulatory provisions related to a member withdrawing from CLF membership: The immediate withdrawal period for credit unions that joined the CLF between April 29, 2020, and Dec. 31, 2020, now continues through Dec. 31, 2021; for those joining between Jan. 1 and Dec. 31, 2021, the immediate withdrawal period continues through Dec. 31, 2022.

The rule took effect March 24; comments are due by May 24.

Regarding the regulatory alert on HPMLs issued in mid-March, the summary addresses the CFPB’s rule issued in February. The rule exempts from the HPML escrow requirement any loan made by a bank or credit union and secured by a first lien on the principal dwelling of a consumer if:

  • the institution has assets of $10 billion or less (as of Dec. 31 in the preceding year);
  • the institution and its affiliates originated 1,000 or fewer loans secured by a first lien on a principal dwelling during the preceding calendar year; and
  • certain of the existing HPML escrow exemption criteria are met.

Proposed in July, CFPB said the rule represents the last mandatory rulemaking to implement the 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA, S.2155).

NASCUS Summary: Interim Final Rule, Central Liquidity Facility (CLF) (members only)

NASCUS Summary: NCUA Reg Alert 21-RA-05, CFPB Rule Expands Exemption from Establishing Escrow Accounts for Higher-Priced Mortgage Loans (HPMLs) (members only)