CFPB Expands HMDA Reporting Requirements.
The CFPB finalized updates to Home Mortgage Disclosure Act reporting requirements Oct. 15 that increased the transactions required under Regulation C.
New required information included the property value, term of the loan and the duration of any teaser or introductory interest rates. Lenders will also be required to provide more information about mortgage loan underwriting and pricing, such as an applicant's debt-to-income ratio, the interest rate of the loan and the discount points charged for the loan.
Mortgage lenders will also be required to report information about all applications and loans secured by dwellings, including reverse mortgages and open-end lines of credit.
Credit unions and community banks located outside a metropolitan statistical area retained their exclusion from HMDA reporting requirements. In addition, under a new standardized reporting threshold, institutions that made less than 25 closed-end mortgage loans in each of the two preceding calendar years or fewer than 100 covered open-end lines of credit in each of the two preceding calendar years will be exempted from the rule.
The changes have a tiered implementation phase-in: The amended institutional coverage test will take effect Jan. 1, 2017. New data point reporting and enforcement will take effect Jan. 1, 2019, and quarterly reporting for large-volume filers will begin Jan. 1, 2020.
Credit union trade associations reacted negatively to the updated rule.
"While NAFCU and our members support HMDA requirements that further the goal of ensuring fair lending and anti-discriminatory practices, we are concerned that some of the additional reporting requirements will not achieve these goals and may only serve to impose significant additional compliance and reporting burdens on responsible lenders, like credit unions, that work to meet their members' needs with safe, sound and fair products," NAFCU Director of Regulatory Affairs Alicia Nealon said.
"As the CFPB and Congress have repeatedly recognized, credit unions did not engage in the types of mortgage-related practices that the bureau is seeking to identify through an expanded HMDA dataset. Moreover, mandating home equity line-of-credit reporting will exacerbate compliance costs and burdens on credit unions since they will have to make costly modifications to their systems in order to collect data on these newly covered transactions," she added.
Cooperative Credit Union Association President/CEO Paul Gentile agreed the CFPB failed to listen to credit union concerns about HELOC reporting requirements.
"HELOCs don't fit with the intent and purpose of HMDA," he said. "It is just one more layer of regulatory burden we must now deal with. They added data fields that were not required and that will layer on to credit unions' reporting burden."
Gentile also called the 25-loan exemption threshold virtually worthless.
"As a system I think it is time we double-down on our efforts with the CFPB and work to get them to not just recognize the value we bring consumers, but help us continue to bring that value by setting thresholds and policies that will be favorable for credit unions. Whenever we engage with the CFPB, we hear time and time again how we did not cause the financial crisis and how much they value the role we play. At this point, it sounds like lip service as we are never recognized for our value and treated differently in their rule making process," he said.
CUNA Chief Advocacy Officer Ryan Donovan said the announcement was extremely disappointing.
"At a time when the bureau should be working to increase the availability of credit to middle class Americans, they instead continue to impose staggering amounts of regulatory burden for credit unions and other small financial institutions. If the bureau's intent is to stifle available credit to consumers, they're succeeding. While Director Cordray continues to publicly state that credit unions in no way contributed to the financial crisis, it's clear the bureau continues to ignore that very important point in their rulemaking," he said.