New Freedoms for Smaller Financial Institutions: Mortgages, Escrow, and the Small Creditor Exemption (H.R. 4521)

What is H.R. 4521?

(Updated January 31, 2017)

This bill  would exempt credit unions and banks with under $10 billion in assets from a Dodd-Frank Act requirement that mortgage lenders must hold an escrow account for five years for higher-priced, first-lien mortgages secured by the borrower's principal dwelling. The bill would also raise the small servicer exemption threshold from 5,000 loans to 20,000 loans, and in turn allow more institutions to fall under the title of "small servicer." 

Argument in favor

Would aid small creditors in providing escrow services in a cost-efficient manner, affording them traction in the mortgage market.

Argument opposed

Smaller servicers do not need further incentives to service mortgage loans. When it gets too easy to get a mortgage (subprime), bad things can follow.

Impact

The bill primarily affects smaller, community-oriented credit unions and banks.

Cost of H.R. 4521

A CBO cost is currently unavailable.

Additional Info

Of Note: