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CFPB Temporarily Changes Mortgage Data Rule Reporting Threshold for Community Banks and Credit Unions
Friday, August 25, 2017 6:40 AM

Final Rule Also Clarifies Certain Requirements to Help Companies Comply

The Consumer Financial Protection Bureau yesterday issued a rule amending the 2015 updates to the Home Mortgage Disclosure Act (HMDA) rule. The Bureau has temporarily changed reporting requirements for banks and credit unions that issue home-equity lines of credit, and clarified the information that financial institutions are required to collect and report about their mortgage lending.

“Cornerstone commends CFPB for increasing the threshold to ease regulatory burdens," said SVP Regulatory Compliance Counsel. "We look forward to working with CFPB to achieve permanent regulatory relief in in HMDA compliance and other areas moving forward.”

The Home Mortgage Disclosure Act—originally enacted in 1975—requires most lenders to report information about the home loans that they originate or purchase, as well as applications received. As directed by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB updated the HMDA regulation in 2015 to improve the quality and type of data reported by financial institutions. Most of the updated requirements take effect in January 2018, and the industry is working to bring operations into compliance.

Reporting Threshold
Under rules that are scheduled to take effect in January 2018, financial institutions would have been required under the Home Mortgage Disclosure Act to report home-equity lines of credit if they made 100 such loans in each of the last two years. Today’s final rule has increased that threshold to 500 loans through calendar years 2018 and 2019 so that the Bureau can consider whether to make a permanent adjustment. This change was initially proposed in July 2017.

This temporary increase in the threshold will provide time for the Bureau to consider whether to initiate another rulemaking to address the appropriate level for the threshold for data collected beginning January 1, 2020.

Clarifications and Technical Corrections
Today’s final rule contains a number of clarifications, technical corrections, and minor changes to the HMDA regulation. These include clarifying certain key terms, such as “temporary financing” and “automated underwriting system.” The changes finalized today will also, for example, establish transition rules for reporting certain loans purchased by financial institutions. Another change will facilitate reporting the census tract of a property, using a geocoding tool that will be provided on the Bureau’s website. These changes were initially proposed in April 2017.

View the final rule.

The CFPB is also releasing today an executive summary of the final rule, updates to technical filing instructions, and other implementation materials. The CFPB hopes that these materials will help financial institutions understand and implement the changes adopted in the final rule.

View the regulatory implementation materials.

View the technical instructions.