On April 16, 2020, the Consumer Financial Protection Bureau (“CFPB”) issued a final rule amending Regulation C, which implements the Home Mortgage Disclosure Act (“HMDA”), finalizing the coverage thresholds for closed-end and open-end mortgages subject to HMDA reporting.
Closed-End Mortgage Loans Coverage Threshold
The final rule permanently raises the threshold from 25 to 100 closed-end mortgage loans in each of the two preceding calendar years. This threshold applies to depository and non-depository financial institutions, effective July 1, 2020.
According to the CFPB, institutions not meeting the threshold can stop collecting HMDA data on their closed-end mortgage loans beginning on July 1, 2020. However, institutions are reminded that other laws or regulations may require collection of certain data on home loan activity. For example, Regulation B, implementing the Equal Credit Opportunity Act (“ECOA”), has a requirement to collect information regarding the applicant’s ethnicity, race, sex, marital status, and age where the credit sought is primarily for the purchase or refinancing of a dwelling that is or will be the applicant’s principal residence and will secure the credit.
Institutions newly excluded from coverage must still record closed-end loan/application data for the first quarter of 2020. Yet, because the deadline for recording that data is after July 1, 2020, newly excluded institutions will not be required to record closed-end data for the second quarter of 2020.
As for reporting, because newly excluded institutions collecting HMDA data in 2020 would not report that data until 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 voluntarily report HMDA data on closed-end mortgage loans in 2021 as long as the institution reports data for the full calendar year 2020.
Open-End Mortgage Loans Coverage Threshold
The final rule permanently reduces the threshold to 200 open-end lines of credit down from 500. This threshold applies to depository and non-depository financial institutions, effective January 1, 2022, upon expiration of the temporary coverage threshold of 500.
Beginning in calendar year 2022, financial institutions that originated 200 or more open-end home equity 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 March 1, 2023.
If you have any questions regarding HMDA coverage thresholds, please contact Solomon Maman.
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