WASHINGTON—The Consumer Financial Protection Bureau has issued a Notice of Proposed Rulemaking (NPRM), which proposes to raise the coverage thresholds for collecting and reporting data about closed-end mortgage loans and open-end lines of credit under the Home Mortgage Disclosure Act (HMDA) rules.
The NPRM would provide relief to smaller lenders from HMDA’s data reporting requirements, and would clarify partial exemptions from certain HMDA requirements that Congress added in the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). The Bureau has also issued an Advance Notice of Proposed Rulemaking (ANPR) seeking information on the costs and benefits of reporting certain data points under HMDA, the agency explained.
“Today’s proposed changes would provide much needed relief to smaller community banks and credit unions while still providing federal regulators and other stakeholders with the information we need under the Home Mortgage Disclosure Act,” said CFPB Director Kathleen L. Kraninger. “The public is encouraged to submit their comments on the proposals, which will be considered by the Bureau before the next step is taken.”
For closed-end mortgage loans, the NPRM proposes two alternatives that would permanently increase the coverage threshold from 25 to either 50 or 100 closed-end mortgage loans. For open-end lines of credit, the NPRM would extend for another two years the current temporary coverage threshold of 500 open-end lines of credit. Once that temporary extension expires, the NPRM would set the open-end threshold permanently at 200 open-end lines of credit.
The ANPR solicits comments about the costs and benefits of collecting and reporting the data points the 2015 HMDA Rule added to Regulation C and certain preexisting data points that the 2015 HMDA Rule revised. The ANPR also seeks comments about the costs and benefits of requiring that institutions report certain commercial-purpose loans made to a non-natural person and secured by a multifamily dwelling.
CUNA Response
“We thank the CFPB for responding to continued credit union and small lender engagement on this matter and for issuing a proposal to provide some relief from HMDA requirements,” said CUNA President/CEO Jim Nussle. “The HMDA rule has disproportionately burdened credit unions despite no evidence of past wrongful conduct. We look forward to engaging with the CFPB during the rulemaking process and will continue to advocate for the CFPB to increase these thresholds further.”
CUNA said it has repeatedly called on the CFPB to raise the closed-end mortgage loan and open-end line of credit reporting thresholds to exempt as many credit unions as possible from HMDA reporting. Members of the CFPB’s Credit Union Advisory Council (CUAC) also called for the CFPB to consider raising the thresholds during its March meeting.
“White increasing the closed-end mortgage loan threshold is a positive first step, we continue to have concerns about the CFPB’s treatment of open-end lines of credit,” said Nussle. “We have called on the CFPB to make the reporting of open-end lines of credit voluntary, as was the case prior to the 2015 HMDA rule, and we will continue to do so.”
The Bureau is inviting the public to submit written comments on the proposed regulation changes.
NAFCU Response
Meanwhile, NAFCU EVP/General Counsel Carrie Hunt added, “The CFPB’s proposed HMDA changes will help reverse the tide of burdensome regulations,which have impacted small-community lenders, including credit unions. Credit unions wholeheartedly reject discrimination in all forms and support the goals of HMDA. NAFCU thanks the Bureau for listening to our concerns in implementing modest changes to allow more credit unions to focus on lending to those in need instead of being bogged down in red tape. We look forward to continuing to engage with the agency to better allow credit unions to serve their 116 million members.”
Resources
The NPRM is available at: https://files.consumerfinance.gov/f/documents/cfpb_nprm-hmda-regulation-c.pdf
The ANPR is available at: https://files.consumerfinance.gov/f/documents/cfpb_anpr_home-mortgage-disclosure-regulation-c-data-points-and-coverage.pdf
Supporting materials are available at: https://www.consumerfinance.gov/policy-compliance/guidance/hmda-implementation/