As we have previously reported, in October 2015, the Consumer Financial Protection Bureau (CFPB) issued a sweeping final rule (“2015 Final Rule”) to amend Regulation C, which implements the Home Mortgage Disclosure Act (HMDA). The bulk of the 2015 Final Rule will become effective on January 1, 2018. With the effective date drawing nearer, the CFPB has proposed an amendment to the 2015 Final Rule, which would, for calendar years 2018 and 2019, increase the threshold for collecting and reporting data on home equity lines of credit (HELOCs). Specifically, the proposed amendment would require only those institutions originating 500 or more HELOCs in each of the two preceding years to collect and report HMDA data on HELOC originations and applications. Additionally, the CFPB has recently released several new and updated resources for HMDA filers, including an illustrative guide to assist filers in preparing loan/application registers for data collected in 2018 and beyond. This alert summarizes these recent developments.

I. PROPOSED TEMPORARY INCREASE TO HELOC REPORTING THRESHOLD -

Currently, Regulation C permits, but does not require, financial institutions to collect and report data on HELOCs that are for home purchase or home improvement purposes. As amended by the 2015 Final Rule, Regulation C will require depository and non-depository institutions to collect and report data on HELOCs, irrespective of the purpose of the credit, if the institution originated at least 100 HELOCs in each of the two preceding calendar years (and the institution falls within other applicable coverage criteria). The preamble to the 2015 Final Rule included extensive explanation of the CFPB’s reasoning in establishing the 100-HELOC threshold. 80 Fed. Reg. at 66,162. Specifically, the CFPB estimated that the threshold would (i) exclude from coverage about 3,000 institutions with low HELOC originations, and (ii) require reporting from only about 750 institutions, the combined originations of which comprise an estimated 88% of the U.S. HELOC market. 80 Fed. Reg. at 66,281-282. Based on these estimates, the CFPB believed the 100-HELOC threshold appropriately balanced the costs and benefits of requiring financial institutions to report HELOC lending activity. The CFPB acknowledged, however, that its estimates were based on limited, imperfect data. 80 Fed. Reg. 66,162.