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CUNA Pushes for HMDA Changes in Advance of CFPB's Final Rule
Monday, June 15, 2015 6:35 AM

In a letter to Consumer Financial Protection Bureau Director Richard Cordray, CUNA President/CEO Jim Nussle has urged the exemption of credit unions from certain new Home Mortgage Disclosure Act (HMDA) Regulation C data reporting requirements.

Nussle reiterated concerns about “particularly burdensome and prohibitive consequences on credit unions and their members” and urged the CFPB to require collection and reporting of only those data points required by the Dodd-Frank Wall Street Reform and Consumer Protection Act amendments to the HMDA.

As required by the Dodd-Frank Act, CFPB's proposed changes include revising the tests for determining which institutions are covered under HMDA and requiring more data points to be reported. Nussle explained his concern that the bureau has gone far beyond the purpose of the statute resulting in a proposed rule that would be detrimental to credit unions and their members.

Covered entities, including credit unions that trigger Regulation C compliance, would be required to report HMDA data if they originate 25 covered loans in the previous calendar year. Unsecured home improvement loans would no longer have to be reported. All closed-end loans, open-end lines of credit and reverse mortgages secured by dwellings would be required to be reported.

Nussle’s letter also addressed that only 17 of the 37 new data fields that must be reported under the proposed rule are prescribed by Congress in the Dodd-Frank Act. He requested that only those required by statute be applied to credit unions.

“The burden for reporting literally dozens of new data fields would be particularly great for small credit union mortgage lenders, with the potential to even force these smaller institutions out of the marketplace,” said CUNA’s letter, which also discussed the operational impact it will have on all mortgage-lending credit unions. The projected costs of complying “are simply unmanageable.”

CUNA also stated that the exemption threshold of only 25 or more closed-end mortgage loans “does not accurately reflect the current mortgage market, or go nearly far enough.” Instead, data collected “illustrates that the threshold would be more appropriate if it were increased to 500 loans per year.” CUNA suggested that “very few lenders” in the past several years have originated less than 25 mortgage loans per year.

In addition, CUNA urged CFPB to reconsider the proposal requiring mandatory reporting of home equity lines of credit, noting that “many credit unions, particularly small and medium-sized credit unions, will have extreme difficulties and overly burdensome expenses in compiling and aggregating the required HMDA data.”

The proposed rule “does not fully recognize the differences between credit unions and other types of depository institutions, who not only are more closely linked to past lending problems but also have more extensive compliance resources.”

The CFPB is expected to release its final rule later this summer.