Trade Groups Seek CFPB Changes to HMDA Multifamily Policy
June 20, 2018
Four industry trade groups have asked the Consumer Financial Protection Bureau (CFPB) to reconsider which financial institutions are subject to the Home Mortgage Disclosure Act (HMDA) reporting by exempting transactions secured by multifamily properties.
The trade groups—Commercial Real Estate Finance Council, Mortgage Bankers Association, National Apartment Association and National Multifamily Housing Council—responded via letter to the CFPB’s recent Request for Information on potential changes to Regulation C, implementing HMDA, as an Inherited Regulation; the CFPB assumed regulatory authority of HMDA in 2015. In a letter to the agency, the trade groups stated that business-to-business transactions to finance multifamily properties are different from those involving single-family residential transactions because they involve businesses—corporations, limited liability companies or partnerships—rather than individuals.
"Our members experience the unwarranted regulatory burdens and privacy issues from the unnecessary application of HMDA reporting requirements to business-purpose loans secured by multifamily properties," the trade groups wrote. "We believe that HMDA reporting on business-to-business loans secured by multifamily properties is not necessary to fulfill the statutory purposes of HMDA and that the burden of collecting and reporting that information therefore far outweighs the benefits of doing so."
The letter also asked the CFPB to increase the current transaction coverage test threshold for closed-end loans from 25 to 500 in each of the two preceding calendar years, pointing out that two recently-passed bills—S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act—provided for such a threshold.
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