CFPB Issues Interpretive Rule on Determining Underserved Areas

The CFPB recently issued an interpretive rule providing updated guidance on how HMDA data will be used to determine which counties are considered “underserved” in a given year.

Each year, the CFPB produces a list of rural and underserved counties which is used to apply certain provisions under Regulation Z (e.g., the exemption from the requirement to establish an escrow account for higher-priced mortgage loans).  The CFPB determines which areas are considered “underserved” using the method provided in the official commentary to Regulation Z.  However, certain parts of that method have become obsolete because they refer to data elements that were eliminated or modified by the 2015 amendments to Regulation C.  This interpretive rule, which went into effect on June 26, 2020, updates and supersedes the outdated methodology set forth in the commentary to Regulation Z.

Note the CFPB’s 2020 list of rural and underserved counties can be found here.