Summary: Proposed rule with request for comments re: the Home Mortgage Disclosure Act (HMDA)

12 CFR Part 1003

Consumer Financial Protection Bureau
Prepared by the NASCUS Legislative & Regulatory Division
May 2019

The Consumer Financial Protection Bureau (Bureau) is proposing two alternatives to amend Regulation C to increase the origination threshold that would trigger HMDA compliance requirements for closed-end mortgage loans.  In addition, the proposal would extend the temporarily increased origination threshold for open-end lines of credit as well as set a higher permanent origination threshold for open in lines of credit. 

The proposed rule can be found here.  Comments on the proposed rule are due to the Bureau by June, 12, 2019.  Comments on the Paperwork Reduction Act analysis in Part VIII of the Supplementary Information are due to the Bureau no later than July 12, 2019.  

Summary

The Home Mortgage Disclosure Act (HMDA) provides for institutional and transactional coverage thresholds that determine whether certain financial institutions are required to collect, record and report any HMDA data on closed-end mortgage loans or open-end lines of credit.  The Economic Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA) provides partial exemptions from HMDA requirements for certain insured depository institutions (including credit unions).  In 2015, the Bureau determined that institutions that originated: (i) at least 25 closed end mortgage loans in each of the two preceding calendar years or (ii) at least 100 open-end lines of credit in each of the two preceding calendar years would be required to collect, record and report HMDA data.  The Bureau then issued an updated HMDA rule in 2017 that temporarily increased the open-end line of credit threshold to 500 open-end lines of credit for calendar years 2018 and 2019. 

The Bureau is now proposing amendments to Regulation C that would increase the closed-end mortgage loan origination threshold that would trigger HMDA requirements.  Under the proposal, institutions originating fewer than either 50 closed-end mortgage loans or alternatively 100 closed-end mortgage loans, in either of the two preceding calendar years would not have to report such data as of January 1, 2020.  The proposal would also adjust the threshold for reporting data about open-end lines of credit by extending the current temporary threshold of 500 open-end lines of credit until January 1, 2020.  After that date, the open-end lines of credit threshold will be set to 200.  The proposal would also incorporate into Regulation C the interpretations/procedures from the interpretive/procedural rule the Bureau issued on August 31, 2018.

The Bureau is seeking comments on the following among other things:

  • On whether the data that would be reported at thresholds of 50 or 100 closed-end mortgage loans would achieve the purposes of HMDA?
  • On whether other closed-end and open-end coverage thresholds may be appropriate?
  • Whether the value of the data that would be reported by institutions that originate between 25 and 50 closed-end mortgage loans or alternatively between 25 and 100 closed end mortgage loans is outweighed by the burden on those institutions of reporting HMDA data and undergoing examinations to validate the accuracy of their submissions?
  • How the proposed increase to the closed-end coverage threshold to 50, 100 or another number would affect the number of depository institutions required to report data on closed end mortgage loans?
  • The significance of the data that would not be available for achieving HMDA’s purposes as a result of the proposed increase to the closed-end coverage threshold to 50, 100 or another number?
  • The reduction in burden that would result from the proposed increase for institutions that would not be required to report (addressing separately the burden reduction for depository institutions that are eligible for the EGRRCPA’s partial exemption for closed-end mortgage loans and the burden reduction for depository institutions that are not)?
  • Whether it should extend the temporary institutional coverage threshold of 500 open-end lines of credit as proposed, and if so, for how long?
  • Whether to increase permanently the open-end institutional coverage threshold when the proposed temporary extension expires?  And, if so, whether a threshold of 200 or some other threshold would most appropriately balance the benefits and burdens of covering institutions based on their open-end lending beginning in 2022?
  • How the proposed temporary and permanent increases would affect the number of financial institutions required to report data on open-end lines of credit?
  • The significance of the data that would not be available as a result of the proposed temporary and permanent increases?
  • The reduction in burden that would result from the proposed temporary and permanent increases for institutions that would not be required to report their open-end lines of credit (addressing separately the burden reduction for institutions that are eligible for the EGRRCPA’s partial exemption for open-end lines of credit and for institutions that are not)?