WASHINGTON–The Consumer Financial Protection Bureau has issued a rule amending the 2015 updates to the Home Mortgage Disclosure Act (HMDA) rule.
The Bureau has temporarily changed reporting requirements for banks and credit unions that issue home-equity lines of credit, and clarified the information that financial institutions are required to collect and report about their mortgage lending.
CUNA said the CFPB change is the direct result of advocacy it and the CU system have conducted.
"The Home Mortgage Disclosure Act is a vital source of information on the health and fairness of the mortgage market," said CFPB Director Richard Cordray in a statement. "Today’s amendments show that the Consumer Bureau is committed to ensuring that financial institutions are able to comply with the rule, and to promoting transparency across the largest consumer financial market in the world.”
Under rules that are scheduled to take effect in January 2018, financial institutions would have been required under the Home Mortgage Disclosure Act to report home-equity lines of credit if they made 100 such loans in each of the last two years. The new final rule has increased that threshold to 500 loans through calendar years 2018 and 2019 so that the Bureau can consider whether to make a permanent adjustment. This change was initially proposed in July 2017.
The CFPB said the temporary increase in the threshold will provide time for it to consider whether to initiate another rulemaking to address the appropriate level for the threshold for data collected beginning Jan. 1, 2020.
“Today’s changes are a direct result of the combined efforts of CUNA, the Leagues and credit unions’ strong advocacy. While this is a step in the right direction, CUNA will keep working toward a complete exemption from the HELOC reporting requirement," said CUNA President/CEO Jim Nussle. "An expanded exemption for credit unions makes more sense given there has been no evidence of wrongful conduct and credit union HELOC data would ultimately be inconclusive because of their field of membership requirements.”
The final rule contains a number of clarifications, technical corrections, and minor changes to the HMDA regulation, including clarifying certain key terms, such as “temporary financing” and “automated underwriting system.” The changes will also establish transition rules for reporting certain loans purchased by financial institutions. Another change will facilitate reporting the census tract of a property, using a geocoding tool that will be provided on the Bureau’s website, the CFPB said.
The final rule is available at: http://files.consumerfinance.gov/f/documents/201708_cfpb_final-rule_home-mortgage-disclosure_regulation-c.pdf