CFPB Issues Final Rule Raising HMDA Data Reporting Thresholds
The Consumer Financial Protection Bureau last week issued a final rule raising loan-volume coverage thresholds for financial institutions reporting data under the Home Mortgage Reporting Act.
The final rule (https://files.consumerfinance.gov/f/cfpb_final-rule_home-mortgage-disclosure_regulation-c_2020-04.pdf), amending Regulation C, increases the permanent threshold for collecting and reporting data about closed-end mortgage loans from 25 to 100 loans effective July 1. The final rule will also amend Regulation C to increase the permanent threshold for collecting and reporting data about open-end lines of credit from 100 to 200, effective January 1, 2022, when the current temporary threshold of 500 of open-end lines of credit expires.
The Mortgage Bankers Association commended the final rule; in a statement (https://www.mba.org/2020-press-releases/april/mba-commends-cfpbs-final-rulemaking-on-hmda-transaction-reporting), MBA President and CEO Robert D. Broeksmit, CMB, said the rulemaking “provides significant relief to many of our residential and commercial/multifamily members and has been a longstanding MBA advocacy priority.”
“We look forward to our ongoing work with the Bureau and other stakeholders on HMDA reporting guidelines, including future consideration on whether the reporting of business-to-business loans secured by multifamily property is justified under the purposes of HMDA,” Broeksmit added.
HMDA and its implementing regulation require certain financial institutions to report data about mortgage loan applications, originations and their purchases. The data serve HMDA’s purposes, which are to help determine whether financial institutions are serving the housing needs of their communities, to assist public officials in distributing public-sector investment so as to attract private investment to areas where it is needed, and to assist in identifying possible discriminatory lending patterns and enforcing antidiscrimination statutes.
“The Bureau recognizes the operational challenges confronted by institutions due to the current COVID-19 pandemic,” the CFPB said in a statement. “The Bureau anticipates that this final rule, once effective, will reduce regulatory burden on smaller institutions to help those institutions to focus on responding to consumers in need now and in the longer term.”
In October 2019, the Bureau extended the temporary open-end threshold until January 1, 2022. Absent today’s final rule, the open-end threshold would have reverted to 100 open-end lines of credit upon the expiration of the temporary threshold.
A summary of the final HMDA rule can be accessed at https://files.consumerfinance.gov/f/cfpb_hmda_executive-summary_2020-04.pdf.