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CFPB issues HMDA interpretive rule to implement EGRRCPA amendments

Agency Rule-Making & Guidance CFPB HMDA S. 2155 Mortgages EGRRCPA

Agency Rule-Making & Guidance

On August 31, the CFPB issued an interpretive and procedural rule to implement and clarify the HMDA amendments included in Section 104(a) of the Economic Growth, Regulatory Relief, and Consumer Protection Act (the Act) (previously Senate bill S. 2155). Section 104(a) of the Act amends section 304(i) of HMDA by adding partial exemptions from some of HMDA’s reporting requirements for certain insured depository institutions and insured credit unions. Specifically, banks and credit unions that originate fewer than 500 open-end lines of credit in each of the two preceding calendar years and/or 500 closed-end mortgages in each of the two preceding calendar years are exempt from HMDA’s expanded data disclosures. The exemption does not apply to nonbanks and does not exempt institutions from HMDA reporting altogether. Notwithstanding the new partial exemptions, the insured institution must comply with HMDA’s expanded data disclosures if it received a rating of “needs to improve record of meeting community credit needs” during each of its two most recent CRA examinations or a rating of “substantial noncompliance in meeting community credit needs” on its most recent CRA examination. These partial exemptions to HMDA took effect when the Act became law on May 24, 2018.

In response to industry questions on the application of the exemptions, the Bureau released an interpretive and procedural rule. The following are key highlights of the rule:

  • Institutions exempt from certain reporting requirements may still report exempt data fields so long as they “report all data fields within any exempt data point for which they report data.” For example, if a partially exempt institution reports a data field that is part of the property address, the institution must report all other data fields that are part of the property address (e.g., city, state, zip code). The Bureau notes that institution may be particularly inclined to report exempt data fields with their 2019 submissions, as 2018 data collection was already in process when the Act took effect;
  • To count towards the 500 loan or line of credit threshold, loans and lines of credit must be otherwise HMDA-reportable loans;
  • The partial exemption applies to new data points that were implemented by the Bureau’s 2015 HMDA Final Rule, but institutions covered by the partial exemption are still required to report the 22 data points previously established by the Federal Reserve Board;
  • The rule provides requirements for a non-universal loan identifier for any partially exempt loan or application; and
  • The CRA ratings used to determine whether the CRA reporting exception applies are the two most recent CRA ratings as of December 31 of the preceding calendar year.

The Bureau notes that it intends to initiate a notice-and-comment rulemaking to incorporate these interpretations and procedures into Regulation C at a later date.

Additionally, the Bureau also released updates to the Filing Instructions Guide (FIG) for HMDA data collected in 2018 to incorporate the Act as implemented and clarified by the interpretive rule.