The Consumer Financial Protection Bureau (CFPB) has issued a final rule raising the loan-volume coverage thresholds for financial institutions reporting data under the Home Mortgage Reporting Act (HMDA).
The final rule, 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, 2020. 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. In October 2019, the BCFPB 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.
According to the CFPB, 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 CFPB states that newly excluded institutions can stop collecting HMDA data on their closed-end mortgage loans beginning on July 1, 2020. However, as the CFPB notes, other laws or regulations may require the collection of certain data on home loan activity. For example, Regulation B includes an independent requirement to collect information regarding the applicant’s ethnicity, race, sex, marital status, and age where the credit sought is primarily for the purchase or refinancing of a dwelling that is or will be the applicant’s principal residence and will secure the credit.
“The Bureau recognizes the operational challenges confronted by institutions due to the current COVID-19 pandemic,” said the CFPB 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.”