On April 16, 2020, the Consumer Financial Protection Bureau (CFPB) issued a final rule amending Regulation C to adjust the thresholds for reporting data about closed-end mortgage loans and open-end lines of credit.
Closed-end mortgage loan
Effective July 1, 2020, the threshold for reporting data about closed-end mortgage loans will increase from 25 to 100 closed-end mortgage loans in each of the two preceding calendar years.
Collection: Newly excluded institutions (those that do not meet the threshold) can stop collecting Home Mortgage Disclosure Act (HMDA) data on their closed-end mortgage loans beginning on July 1, 2020.
Recording: Newly excluded institutions must still record closed-end data for the first quarter of 2020 on a loan/application register by 30 calendar days after the end of the first quarter. They will not, however, be required to record closed-end data for the second quarter of 2020 because the deadline for recording that data is after July 1, 2020.
Reporting: Because newly excluded institutions collecting HMDA data in 2020 would not otherwise report that data until early 2021, the final rule relieves newly excluded institutions of the obligation to report by March 1, 2021, data collected in 2020 on closed end mortgage loans (including data collected in 2020 before July 1, 2020). Under the final rule, a newly excluded institution may report voluntarily HMDA data on closed-end mortgage loans in 2021, as long as the institution reports data for the full calendar year 2020.
Open-end lines of credit
Effective on Jan. 1, 2022, when the current temporary threshold of 500 open-end lines of credit expires, the threshold for reporting data about open-end lines of credit will be permanently set at 200 open-end lines of credit in each of the two preceding calendar years.
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 that data by the first of March the following calendar year.
As we are aware, HMDA and its implemented regulation require certain financial institutions to collect and report data about mortgage loan applications, originations and their purchases. The data will serve HMDA’s purposes which is to provide the public with loan data that can be used to help determine whether financial institutions are serving the housing needs of their communities, to assist public officials in distributing public-sector investments to attract private investment to areas where it is needed, and to assist in identifying possible discriminatory lending patterns and enforcing antidiscrimination statutes.
The Consumer Financial Protection Bureau (CFPB) recognizes the operational challenges that institutions are being confronted with due to the current COVID-19 pandemic. CFPB anticipates that once this final rule is effective, it will help reduce regulatory burden on these smaller institutions. Additionally, it will help those institutions to be able to focus more on responding to those consumers that are in need now and also in the longer term.
CFPB has posted the following documents:
- Unofficial, informal redline to reflect changes to Regulation C
- Executive Summary
- HMDA Rule Key Dates Timeline 2020-2022
- HMDA institutional coverage chart, effective July 1, 2020 through Dec. 31, 2021
- HMDA institutional coverage chart, effective January 1, 2022
- HMDA transactional coverage chart, effective July 1, 2020 through Dec. 31, 2021
- HMDA transactional coverage chart, effective Jan. 1, 2022