The Consumer Financial Protection Bureau (CFPB) announced on December 6 that it would be lenient when implementing adjustments made to the closed-end loan reporting level in the 2020 Home Mortgage Disclosure Act (HMDA) Final Rule. The United States District Court for the District of Columbia issued an order on September 23, 2020, dismissing the 2020 HMDA Final Rule and reducing the reporting threshold for closed-end mortgage loans from 100 in each of the two years before the level established in 2015 to 25.
The CFPB is aware that financial institutions impacted by this change could need time to adapt or modify their policies, practices, systems, and operations to comply with their reporting requirements. The agency stated that it does not plan on enforcing or citing HMDA violations for the inability to report closed-end mortgage loan data gathered in 2020, 2021, and 2022 for institutions under the CFPB’s jurisdiction. This is because it does not consider actions regarding the financial institutions’ HMDA data as a priority.
According to a report published by the CFPB in 2021, lenders who are newly exempt under the 2020 HMDA Rule and have annual origination volumes that are greater than the 25-loan threshold but less than the 100-loan threshold did not appear to be more likely to give loans to Black and non-White Hispanic borrowers than lenders with higher origination volumes.
According to the study, lenders lower than the 100-loan limit offer more loans for investment purposes to borrowers with higher incomes, trusts, partnerships, and companies, as well as more loans secured by real estate located in census tracts with low to moderate incomes. Click here to read more.
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