CFPB Loosens HMDA Requirements in Final Rule

The Consumer Financial Protection Bureau (CFPB) announced on Thursday the issuance of a new, final rule under the Home Mortgage Disclosure Act (HMDA). The new rule extends the current temporary threshold for collecting and reporting data about open-end lines of credit under HMDA for two years.

Additionally, the rule also clarifies partial exemptions from certain HMDA requirements were added by Congress into the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) signed into law by President Donald Trump in May of 2018.

“For open-end lines of credit, the rule extends for another two years, until January 1, 2022, the current temporary coverage threshold of 500 open-end lines of credit,” the CFPB said in a press release announcing the rule’s issuance. “For data collection years 2020 and 2021, financial institutions that originated fewer than 500 open-end lines of credit in either of the two preceding calendar years will not need to collect and report data with respect to open-end lines of credit.”

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The move requires less data reporting for small lenders, including reverse mortgage lenders. The implementation of this rule will allow smaller lenders to avoid the “burden” of regulations, according to the CFPB.

“This final rule further effectuates the burden relief for smaller lenders provided by the EGRRCPA by addressing certain issues relating to the partial exemptions that the August 2018 rule did not address,” the Bureau said.

The rule change proposal was originally made public in May, and is being made in the interest of smaller financial organizations conducting business in American communities, according to CFPB Director Kathleen L. Kraninger.

“[The] proposed changes would provide much needed relief to smaller community banks and credit unions while still providing federal regulators and other stakeholders with the information we need under the Home Mortgage Disclosure Act,” said Kraninger in May’s announcement of the rule change proposal.

A period of public comment on the matter was opened in July, though the issuance of the rule arrives five days before the original public commenting deadline of October 15.

HMDA was passed by the United States Congress in the fall of 1975, and signed into law by President Gerald Ford that December. It requires certain financial institutions to provide mortgage transaction data to the public.

Read the final rule at the CFPB.

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