The Consumer Financial Protection Bureau (CFPB) recently announced a proposed rule package that contained temporary HMDA data collection and reporting thresholds for open-end lines of credit.
The rule also established partial exclusions for lenders from certain HMDA standards included in Congress’s Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), signed into law in May 2018. Financial institutions that originated less than 500 open-end lines of credit in 2020 and 2021 will not be required to collect and disclose data on open-end lines of credit.
Private lenders benefit from the rule since it exempts them from HMDA reporting requirements. The rule also applies to small lenders and reverse mortgage lenders. The rule’s adoption will ease the strain on smaller lenders and lower compliance expenses for everyone. The Bureau stated in a press release that “this final rule further implements the burden relief granted by the EGRRCPA for smaller lenders by addressing some concerns relating to partial exclusions that the August 2018 rule did not address.
The final regulation comes as the United States Supreme Court prepares to consider a case challenging the CFPB’s organizational structure unconstitutional. The outcome might determine the agency’s fate, which was established during the Obama administration as part of the 2010 Wall Street Reform and Consumer Protection Act.
If the US Supreme Court rules that the Bureau is illegal, it could have far-reaching implications for the sector since it might overturn all of the CFPB’s decisions over the previous nine years. To learn more about the final rule of the CFPB aimed at reducing the requirements of the HMDA, click here.
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