CFPB Proposes Changes to HMDA Rules

The Consumer Financial Protection Bureau (CFPB) issued a Notice of Proposed Rulemaking (NPRM) on Thursday, which proposes a raise to the coverage thresholds for collecting and reporting data about closed-end mortgage loans and open-end lines of credit under the rules of the Home Mortgage Disclosure Act (HMDA).

“The NPRM would provide relief to smaller lenders from HMDA’s data reporting requirements, and would clarify partial exemptions from certain HMDA requirements that Congress added in the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA),” an announcement press release stated. “The Bureau today also issued an Advance Notice of Proposed Rulemaking (ANPR) seeking information on the costs and benefits of reporting certain data points under HMDA.”

These proposed changes are being made in the interest of smaller financial organizations conducting business in American communities, according to CFPB Director Kathleen L. Kraninger.

“Today’s 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 the announcement release. “The public is encouraged to submit their comments on the proposals, which will be considered by the Bureau before the next step is taken.”

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.

A rule proposal implemented in 2018 requires financial institutions that have originated 500 home equity credit lines to submit certain information about borrowers to the CFPB under HMDA, which the agency said could be revisited to determine, “the appropriate level for the threshold for data collected beginning January 1, 2020.” The current proposal would extend the 500 threshold requirement to January 1, 2022.

For more information, read the CFPB’s press release.

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