Agencies propose CRA changes in line with new HMDA rules

Community Reinvestment Act (CRA) regulations would be amended to conform to changes made this summer by the CFPB to its Regulation C (Home Mortgage Disclosure Act) and set to take effect Jan. 1, under a joint notice of proposed rulemaking issued Wednesday by federal banking agencies.

The proposal is being issued for a 30-day comment period, with a proposed effective date of Jan. 1, matching the CFPB rule.

The Federal Reserve, FDIC and OCC issued the joint proposal following the consumer bureau’s revisions to its HMDA regulations which require covered financial institutions to report applications for, and originations and purchases of, “covered loans” that are secured by a dwelling.

The proposal by the three banking agencies would revise the current definition of “home mortgage loan” in their CRA regulations, also effective on Jan. 1, to mean a “closed-end mortgage loan” or an “open-end line of credit,” as those terms are defined under HMDA regulation by CFPB.

“Since 1995, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency have conformed certain definitions in their respective CRA regulations to the scope of loans reported under Regulation C and believe that continuing to do so produces a less-burdensome CRA performance evaluation process,” the agencies stated in a release. “In particular, the agencies are proposing to amend their CRA regulations to revise the definitions of ‘home mortgage loan’ and ‘consumer loan,’ as well as the public file content requirements. These revisions would maintain consistency between the CRA regulations and the recent changes to Regulation C, which generally become effective on January 1, 2018.”

In addition, the agencies stated, the draft proposal contains technical revisions and would remove obsolete references to the Neighborhood Stabilization Program.

 

Joint proposal: Revised Community Reinvestment Act regulations

 

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