So, if a small creditor chooses not to apply the exemption on this first effective date of June 1, 2013 for escrows, does that preclude us from being able to apply the small cr. exemption for other parts of the upcoming regulation changes (January 2014) if we so choose? Is it an all or nothing? Before we make our final determination on continuing escrow, I wanted to be sure. We have some good customers who want to escrow, but they are not distressed. We definitely would otherwise qualify for the small creditor exemption.

Thanks!

The small creditor exemption criteria differ slightly for various rules, so you'll need to look at each one to see if you qualify. Just because you do or do not meet the Reg Z escrow small creditor exemption does not mean you will or will not meet other exemptions for "small creditors" (and whether or not you choose to take the exemption has no bearing on the others).

Heck, the QM small creditor exemption is still being written, so we have yet to see how that plays out!!

Well, I didn't even think of that! It takes a village is very appropriate for compliance at this time. Thanks for the reply.

I just don't want "someone" to come back and say "if you don't consider yourself a small creditor for this reg, why do you on this one?" and have exam issues.

Just say: "Riddle me this.... why is the exemption for "temporary" loans (i.e. construction loans) a term of 2 years under RESPA, but only 12 months under Reg Z's HPMLs rule?"

At the very least, you can buy yourself some time!

I'm convinced we have a better handle on this new stuff than the examiners anyway!

Now that the new 4th category of 1026.43(e) was finalized on May 30th. Are small creditors exempt from escrowing if they meet the criteria for Small portfolio QM 1st mortgage HPML Rate Spread < 3.5% "conclusive safe harbor"?