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CFPB Issues Final Rule Raising Coverage Thresholds Under HMDA

NationalMortgageProfessional.com
Apr 16, 2020
The Consumer Financial Protection Bureau has announced that it has taken measures to make it easier for consumers with urgent financial needs to obtain access to mortgage credit more quickly in the middle of the COVID-19 pandemic

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 Jan. 1, 2022, when the current temporary threshold of 500 of open-end lines of credit expires. In October 2019, the CFPB extended the temporary open-end threshold until Jan. 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.
 
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 Mortgage Bankers Association commends CFPB Director Kathy Kraninger and the Bureau’s increase in the HMDA transaction reporting threshold for closed-end mortgages from 25 to 100 loans,” said MBA President and Chief Executive Officer Robert D. Broeksmit, CMB. “This rulemaking provides significant relief to many of our residential and commercial/multifamily members and has been a longstanding MBA advocacy priority. Under these revised rules, HMDA reporting for 2020 is optional for lenders that did not meet the 100-loan threshold in either 2018 or 2019. 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.”
 
The CFPB recognizes the operational challenges confronted by institutions due to the current COVID-19 pandemic. 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.

 
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