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Financial Services Law Insights and Observations

CFPB raises HMDA reporting thresholds

Agency Rule-Making & Guidance CFPB HMDA Regulation C Covid-19 Mortgages

Agency Rule-Making & Guidance

On April 16, the CFPB issued a final rule permanently raising coverage thresholds for collecting and reporting data about closed-end mortgage loans and open-end lines of credit under HMDA. As previously covered by InfoBytes, these changes were first proposed by the Bureau last May. The final rule, which amends Regulation C, increases the permanent threshold from 25 to 100 loans starting July 1, 2020 and is applicable to both depository and nondepository institutions. The Bureau states in an executive summary that newly excluded institutions can stop collecting HMDA data on their closed-end mortgage loans beginning July 1, 2020; however, these institutions may still be obligated to collect home loan activity information required by other regulations. Under the final rule, newly excluded institutions are still required to record closed-end data for the first quarter of 2020; however because these institutions would not otherwise report the data until early 2021, the final rule relieves newly excluded institutions of the March 1, 2021 reporting obligation on data collected in 2020 (including closed-end mortgage loan data collected in 2020 prior to July 1, 2020). The Bureau notes that newly excluded institutions “may voluntarily report HMDA data on closed-end mortgage loans in 2021 as long as the institution reports data for the full calendar year 2020.”

The final rule also increases the permanent threshold for collecting and reporting data about open-end lines of credit from 100 to 200, however this change will not take effect until January 1, 2022, when the current temporary threshold of 500 open-end lines of credit expires (covered by InfoBytes here). Beginning in 2022, both depository and nondepository institutions that meet this threshold must report data on open-end lines of credit by March 1 of the following calendar year.

Additional resources, including a timeline of key dates and institutional/transactional coverage charts are available here. “The Bureau recognizes the operational challenges confronted by institutions due to the current COVID-19 pandemic,” the CFPB states in its press release. “The Bureau anticipates that this final rule, once effective, will reduce regulatory burden on smaller institutions to help those institutions to focus on responding to consumers in need now and in the longer term.”