On January 18, 2018, the House gave small lenders a late Christmas present when it passed H.R. 2954 known as the Home Mortgage Disclosure Adjustment Act. The act amends the existing Home Mortgage Disclosure Act (HMDA) by easing the regulatory burden on small lenders. By way of background, HMDA imposes additional reporting requirements on regulated entities that became effective this month. More specifically, HMDA requires banks and credit unions to collect 48 additional data fields on any mortgage loan they originate and to report that data to the CFPB. This additional regulatory burden will increase transaction costs and processing time for obtaining a home mortgage and impose unique burdens on small lenders that lack the existing infrastructure and processes to effectively capture and communicate the additional data sets.

The Home Mortgage Disclosure Adjustment Act attempts to ameliorate this disproportionate impact by exempting (a) small lenders, such as community banks and credit unions, which originate less than 500 closed-end mortgage loans in each of the two preceding calendar years, and (b) those that originate less than 500 open-end lines of credit in each of the two preceding calendar years. Bradley will continue to monitor the progress of the act as it moves through the Senate.