Final rule raises threshold for Reg C open-end lines of credit

The threshold for collecting and reporting data about open-end lines of credit will increase for some financial institutions for a two-year period, beginning Jan. 1, according to a final rule scheduled to be published by the CFPB Wednesday.

The lower collection and reporting threshold will apply to financial institutions that originated fewer than 500 open-end lines of credit in either of the preceding two years; those institutions would not be required to begin collecting such data until Jan. 1, 2020. The agency also said it is adopting a new reporting exclusion.

The final rule amends the bureau’s Home Mortgage Disclosure Act (Regulation C) final rule of 2015. Now, institutions with fewer than 100 open-end lines of credit are required to collect and report the information, for Reg C purposes. The final rule raises the threshold beginning the first day of 2018 for those institutions that meet the criteria.

In its Federal Register notice, CFPB stated that since issuing the 2015 HMDA Final Rule (in October of that year), it has heard concerns that the open-end threshold at 100 transactions is too low. “On July 20, 2017, the Bureau published a proposal (July 2017 HMDA Proposal) to address the threshold for reporting open-end lines of credit. The Bureau is publishing final amendments to Regulation C pursuant to the April 2017 HMDA Proposal and the July 2017 HMDA Proposal,” the agency noted.

CFPB stated that, in addition to increasing threshold to 500 or more open-end lines of credit for two years (calendar years 2018 and 2019), the final rule corrects a drafting error by clarifying both the open-end and closed-end thresholds so that only financial institutions that meet the threshold for two years in a row are required to collect data in the following calendar years.

“With these amendments, financial institutions that originated between 100 and 499 open-end lines of credit in either of the two preceding calendar years, will not be required to begin collecting data on their open-end lending before Jan. 1, 2020,” the bureau stated. “This temporary increase in the open-end threshold will provide time for the Bureau to consider whether to initiate another rulemaking to address the appropriate level for the open-end threshold for data collected beginning January 1, 2020.”

Final rule: Home Mortgage Disclosure (Regulation C)