On May 2, 2019, the Consumer Financial Protection Bureau (“CFPB”) released a notice of proposed rulemaking (the “NPRM”) proposing to raise coverage thresholds for collecting and reporting data under the Home Mortgage Disclosure Act (“HMDA”). In addition, the Bureau released an advanced notice of proposed rulemaking (the “ANPR”) requesting comment on the costs and benefits of certain HMDA reporting requirements. CFPB Director Kraninger described the proposals as providing “much needed relief to smaller community banks and credit unions while still providing federal regulators and other stakeholders with the information we need.”
The NPRM proposes changes to the HMDA coverage thresholds for both closed-end mortgages and open-end lines of credit:
- Closed-end mortgage loans: The current coverage threshold is originating 25 or more closed-end mortgage loans in both of the two prior years. The NPRM proposes two alternatives – raising the threshold to either 50 or 100 closed-end mortgage loan originations.
- Open–end lines of credit: The current coverage threshold is temporarily set at 500 or more open-end lines of credit in each of the two prior years. The proposed rule would extend this temporary threshold until January 1, 2022, and would set the permanent threshold at 200 open-end lines of credit.
The ANPR solicits comment on the costs and benefits of reporting certain data points currently required under HMDA, based on industry’s “concerns about the burden associated with reporting certain of the new or revised data points relative to the value of the information in serving HMDA’s purposes.” Examples of such data points include whether a borrower owns or leases the land on which a manufactured home is located, disaggregated ethnicity categories, and free-form text fields for certain data fields, including the reason for loan denial.