A&B ABstract:  In a final rule issued on October 10, 2019, the CFPB amended Regulation C under the Home Mortgage Disclosure Act to incorporate exemptions created by the Economic Growth, Regulatory Relief, and Consumer Protection Act, among other changes.

Discussion:

Effective January 1, 2020, the Consumer Financial Protection Bureau issued a final rule under the Home Mortgage Disclosure Act (“HMDA”), addressing certain exemptions from HMDA’s reporting requirements.

Threshold Exemption for Reporting on Open-End Loans

The CFPB has extended to January 1, 2022, an increased threshold for reporting HMDA data on open-end loans.  Specifically, the rule maintains the threshold of 500 transactions below which a lending institution is not required to report loan data.  (Thus, an entity originating fewer than 500 transactions is exempt.)   However, if a financial institution that is under the 500-transaction threshold chooses to report any excluded applications for, or originations or purchases of open-end lines of credit, it must report all such transactions.

Incorporation of Partial Exemptions Under the Regulatory Relief Act

The final rule incorporates into Regulation C provisions of an August 2018 interpretive and procedural rule adopted pursuant to the Regulatory Relief Act.  Specifically, an insured depository institution or credit union covered by a partial exemption may report exempt data fields as long as it reports all data fields within any exempt data point for which it reports data.  Section 1003.3(d) makes a partial exemption available to an entity that, in each of the preceding two calendar years, originated fewer than 500 closed-end mortgage loans or 500 open-end lines of credit.

The final rule also include clarifications:

• That only loans and lines of credit that are otherwise reportable under HMDA count towards the thresholds for the partial exemptions;
• Of which data points the partial exemptions cover; and
• On the applicability of the partial exemptions to insured depository institutions with less-than-satisfactory CRA examination histories.

Takeaway:

In its rule announcement, the CFPB indicated that it will address permanent coverage thresholds for both closed-end mortgage loans and open-end lines of credit in a separate final rule.  We will continue to monitor the rulemaking process.

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