Client Alert

Home Mortgage Disclosure Act Amendments: CFPB Issues Two Regulation C Releases

06 May 2019

On May 2, 2019, the CFPB issued two releases related to Regulation C, which implements the Home Mortgage Disclosure Act (HMDA). The CFPB released a notice of proposed rulemaking (NPRM) to adjust Regulation C’s loan volume thresholds that trigger HMDA and to make other changes. Comments are due 30 days after publication in the Federal Register. The CFPB also released an advance notice of proposed rulemaking (ANPR) seeking comment on whether it should propose to revise the data elements that covered institutions must report. Comments are due 60 days from publication in the Federal Register.

The NPRM – Institutional coverage. Whether a lender must report HMDA data depends in part on whether its loan volume met specific thresholds in the two preceding calendar years. Regulation C provides two thresholds, one for reporting closed-end loans and the other for reporting open-end lines of credit. The NPRM proposes changes to both the closed-end and open-end thresholds as described below.

Currently, a lender meets the closed-end loan volume threshold if the lender made at least 25 closed-end covered loans in each of the two preceding calendar years. The NPRM proposes two alternatives that would increase the coverage threshold to either 50 or 100 closed-end covered mortgage loans in each of the two preceding calendar years.

For open-end lines of credit, a lender meets the reporting threshold if the lender makes at least 500 open-end covered lines in each of the two preceding calendar years; however, beginning January 1, 2020, the coverage threshold drops to 100 covered open-end lines in each of the two preceding calendar years. The NPRM proposes to extend the threshold of 500 open-end lines of credit until January 1, 2022, and then to permanently set the open-end threshold at 200 open-end lines of credit in each of the two preceding calendar years. 

The NPRM would also make certain conforming changes to Regulation C to clarify how depository institutions should comply with the rule in light of an exemption from reporting certain data elements set forth in the Economic Growth, Regulatory Relief, and Consumer Protection Act.[1]

The ANPR – Revisiting data and transactions that must be reported under the CFPB’s 2015 Regulation C amendments. In 2015 the CFPB comprehensively amended Regulation C, expanding and/or revising the data points that must be reported as well as the types of transactions covered by the rule. The ANPR now seeks comment on whether the 2015 rule appropriately balances the burdens and benefits of increased data collection, and whether the CFPB should propose to change the data points added or revised in the 2015 rulemaking. 

In addition, the ANPR seeks comment on whether the CFPB should propose to exclude reporting on business purpose loans to non-natural persons secured by multifamily dwellings. According to the CFPB, industry stakeholders state that data on such transactions is not necessary to fulfill HMDA’s purposes.

[1] Pub. Law 115-174, 132 Stat. 1296 (2018).



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