The Home Mortgage Disclosure Act (“HMDA”) data collection and reporting standards were recently changed by the Consumer Financial Protection Bureau (“CFPB”). According to the new regulation, insured depository institutions and credit unions are excluded from certain HMDA criteria if they generated less than 500 closed-end home mortgages or 500 open-ended lines of credit in each of the two preceding years.
Lenders that originate 25 or more mortgages in two years must report their HMDA data to the CFPB under current law. The CFPB plan, on the other hand, creates two new criteria that would increase the HMDA reporting requirement to lenders that originate 50 or 100 mortgages in two years. Many small lenders, community banks, and local credit unions would be exempt from reporting requirements under the new level.
“Today’s proposed adjustments would provide much-needed relief to smaller community banks and credit unions while still providing federal regulators and other stakeholders with the information we require under the Home Mortgage Disclosure Act,” according to CFPB Director Kath Kraninger. According to the CFPB, raising the closed-end coverage threshold from 25 to 50 would relieve institutions that originate between 25 and 49 closed-end mortgages of the ongoing costs associated with reporting those loans that they would otherwise incur if the closed-end coverage threshold remained at 25.
According to the CFPB, the proposed increase in the threshold would save about $8.1 million per year in operational expenditures for almost 40% of institutional lenders bound under The Home Mortgage Disclosure Act (HMDA). To read more on the changes to the HMDA Reporting requirements, click here
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