Banking and Finance Law Daily CFPB’s final rule modifies HMDA data reporting thresholds
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Thursday, April 16, 2020

CFPB’s final rule modifies HMDA data reporting thresholds

By Nicole D. Prysby, J.D.

The Bureau amended Regulation C to raise the closed-end coverage threshold from 25 to 100 closed-end mortgage loans and set the open-end threshold at 200 open-end lines of credit.

On April 16, 2020, the Consumer Financial Protection Bureau announced the release of a final rule raising the threshold for reporting data under the Home Mortgage Disclosure Act (HMDA). The final rule amends Regulation C (12 CFR Part 1003) to permanently raise the closed-end coverage threshold from 25 to 100 closed-end mortgage loans in each of the two preceding calendar years, effective January 1, 2020. It also sets the permanent open-end threshold at 200 open-end lines of credit, effective January 1, 2022.

HMDA requires certain institutions to collect, report, and disclose specified information about their mortgage lending activity. In the 2015 HMDA Rule, the Bureau established institutional and transactional coverage thresholds in Regulation C that determine whether financial institutions are required to collect, record, and report any HMDA data on closed-end mortgage loans or open-end lines of credit. The 2015 HMDA Rule set the closed-end threshold at 25 closed-end mortgage loans in each of the two preceding calendar years, and the open-end threshold at 100 open-end lines of credit in each of the two preceding calendar years. In 2017, the Bureau temporarily increased the open-end threshold to 500 open-end lines of credit and in October 2019, the Bureau extended the temporary threshold of 500 open-end lines of credit to January 1, 2022.

The CFPB’s final rule amending Regulation C increases the threshold for reporting data about closed-end mortgage loans so that financial institutions originating fewer than 100 closed-end mortgage loans in either of the two preceding calendar years will not have to report such data, effective July 1, 2020. The Executive Summary for the rule explains that the final rule permanently raises the closed-end coverage threshold from 25 to 100 closed-end mortgage loans in each of the two preceding calendar years, and that newly excluded institutions can stop collecting HMDA data on their closed end mortgage loans beginning on July 1, 2020. Newly excluded institutions must still record closed-end data for the first quarter of 2020. They will not, however, be required to record closed-end data for the second quarter of 2020 because the deadline for recording the data is after July 1, 2020.

The final rule also modifies the threshold for reporting data about open-end lines of credit, setting the permanent open-end threshold at 200 open-end lines of credit effective January 1, 2022, upon expiration of the temporary threshold of 500 open-end lines of credit. Consequently, beginning in calendar year 2022, financial institutions that originated at least 200 open-end lines of credit in each of the two preceding calendar years must collect and record data on their open-end lines of credit and report the data by March 1 of the following calendar year.

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