May 03, 2019

NAFCU pushed HMDA changes adopted by CFPB, noted in WSJ

CFPB BuildingThe CFPB issued a Notice of Proposed Rulemaking (NPRM) yesterday, seeking to modify the thresholds set under the Home Mortgage Disclosure Act (HMDA). Under the proposed rule, the coverage thresholds currently in place for collecting and reporting data on closed-end mortgage loans and open-end lines of credits would be raised.

“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 CFPB Director Kathleen L. Kraninger in a statement.

The bureau estimates that if the closed-end coverage threshold was increased from 25 to 100 loans, approximately 39 percent of depository institutions covered under the current rule would be relieved of their data reporting under HMDA on closed-end mortgage loans, while 61 percent would continue to be required to report.

Additionally, the proposed rule would adjust the threshold for open-end lines of credit data reporting, extending the current threshold of 500 open-end lines of credit to January 1, 2022 and setting the threshold at 200 upon the expiration of the temporary threshold. This proposed rule also further implements provisions of the Economic Growth, Regulatory Relief, and Consumer Protection Act, a measure introduced in the 115th congress by Sen. Mike Crapo, R-Idaho, and incorporates new interpretations and procedures into Regulation C.

NAFCU has been deeply engaged with the CFPB Director Kathy Kraninger on HMDA and noted in an interview with the Wall Street Journal that these changes would “help reverse the tide of burdensome regulations” against credit unions.

“The CFPB’s proposed HMDA changes will help reverse the tide of burdensome regulations, which have impacted small-community lenders, including credit unions,” said NAFCU Executive Vice President and Government Affairs and General Counsel Carrie Hunt. “Credit unions wholeheartedly reject discrimination in all forms and support the goals of HMDA. NAFCU thanks the Bureau for listening to our concerns in implementing modest changes to allow more credit unions to focus on lending to those in need instead of being bogged down in red tape. We look forward to continuing to engage with the agency to better allow credit unions to serve their 116 million members.”

Prior to the NPRM, NAFCU urged for more guidance on HMDA to ensure credit unions are compliant, and met with Director Kraninger to discuss credit unions' concerns and priorities. Ahead of the March 1 deadline for covered institutions to file their first Loan/Application Register with the CFPB, NAFCU's compliance team provided credit unions with necessary guidance and resources to correctly submit their data.

The CFPB also issued an Advance Notice of Proposed Rulemaking (ANPR) to gather information on the costs and benefits of reporting certain data points under HMDA.