CFPB Issues Final Rule Permanently Adjusting HMDA Reporting Data Thresholds

The CFPB recently issued a final rule amending Regulation C, the regulation implementing HMDA, to adjust the institutional and transactional coverage thresholds for reporting data about closed-end mortgage loans and open-end lines of credit, with the new thresholds made permanent effective July 1, 2020, and January 1, 2022, respectively.

Specifically, under the final rule, 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 (a change from the current threshold of 25 closed-end mortgage loans).  The new threshold under the final rule for reporting data about open-end lines of credit will be set at 200 open-end lines of credit effective January 1, 2022 (when the current temporary threshold of 500 open-end lines of credit expires).

The final rule also amends Regulation C’s Section 1003.3(c)(11) and Comment 3(c)(11)-2 so that newly excluded institutions may voluntarily report closed-end loan data collected in 2020 if such institutions: (1) meet the definition of “financial institution” as of January 1, 2020, but are newly excluded from the definition on July 1, 2020, as a result of the increase in the closed-end mortgage loan threshold, and (2) report closed-end data for the full calendar year.

The CFPB indicated its belief that the threshold adjustments provide meaningful burden relief for smaller institutions while maintaining reporting sufficient to achieve HMDA’s purposes.  The CFPB also released an executive summary and an unofficial, informal redline to assist in the review of the changes made to Regulation C.