United States

CFPB issues final rule to expand HMDA data collection and reporting


The long-awaited final rule for the expanded data collection and reporting requirements for the Home Mortgage Disclosure Act (HMDA) was released by the Consumer Financial Protection Bureau (Bureau) on Oct. 15, 2015. It was published in the Federal Register on Oct. 28, 2015. The changes become effective at various times between Jan. 1, 2017, and Jan. 1, 2018. The data collection requirements, as well as most of the other changes, are effective for applications received, and loans originated on or after Jan. 1, 2018, to be reported in 2019.

The impact of the final rule is felt most strongly in three areas–which institutions must report; what transactions are subject to reporting; and what information must be collected and reported.

The final rule adopts a uniform loan-volume threshold for all depository and nondepository institutions. In January 2017, institutions that meet the current tests (asset size, location, federally regulated and loan activity) and originated at least 25 or more purchase or refinance transactions per year in both 2015 and 2016 will be required to report. This will result in a reduction in the number of reporting institutions. In January 2018, institutions will be required to report if they meet the current criteria, and if they meet new loan volume thresholds in each of the two preceding calendar years. The new loan volume thresholds are the origination of at least 25 covered closed-end or 100 covered open-end lines of credit secured by a lien on a dwelling. If an institution doesn’t meet one of the loan volume threshold tests, it will not have to report for that type of loan (i.e., does not make 100 HELOCs in each of the preceding two calendar years, it would not be required to report HELOCs).

Beginning Jan. 1, 2018, data will be collected and reported on originations and purchases of, as well as applications for, covered loans (both open- and closed-end) secured by a dwelling regardless of purpose. This pulls in open-end lines of credit (LOC) and reverse mortgages, as well as most closed-end loans. The class of “covered loans” continues to exclude many of the same types of loans that are excluded today such as temporary financing, loans primarily for agricultural purposes, etc. Data will need to be collected for business purpose loans that are secured by a dwelling, if the purpose of those loans is for home improvement, home purchase or refinancing. Loans under a preapproval program must be reported if the preapproval request is denied, approved but not accepted, or results in the origination of a home purchase loan.

The final rule modifies many existing data points and adds new data points for a total of 48 data points to be collected and reported. The new data points include information about the applicant or borrower, underwriting, collateral, and loan terms and features.

Additionally, the final rule impacts how information is collected and submitted, addresses a variety of potential privacy issues and changes how official guidance is presented. “A Guide to HMDA Reporting Getting it Right” will eventually be replaced by a new commentary section in the final rule.

The Bureau has a variety of helpful tools on the implementation page of its website that illustrate the key implementation dates, changes to data points, which institutions must report in 2017 and 2018, and other aspects of the final rule.