Agencies offer joint statement on HMDA exemptions resulting from reg relief legislation

Partial exemptions for some financial institutions from certain Home Mortgage Disclosure Act (HMDA) requirements resulting from regulatory relief legislation enacted in May are outlined in a joint statement issued Thursday by federal financial institution regulators.

It is the first such joint action taken by the regulators in response to the enactment May 24 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, S. 2155.

The statement describes that exemptions provided under the legislation are those:

  • For closed-end mortgage loans if the institution or the credit union originated fewer than 500 closed-end mortgage loans in each of the two preceding calendar years.
  • For open-end lines of credit if the institution or credit union originated fewer than 500 open-end lines of credit in each of the two preceding calendar years.

The joint statement was issued by the Federal Deposit Insurance Corp. (FDIC), Office of the Comptroller of the Currency (OCC), and the National Credit Union Administration (NCUA). A similar statement was issued by the Bureau of Consumer Financial Protection (BCFP, formerly known as CFPB).

The regulators added that the BCFP “expects to provide further guidance later this summer on how the Act will apply to HMDA data collected in 2018.”

The statement notes that for closed-end mortgage loans or open-end lines of credit subject to the partial exemptions, “the Act states that the ‘requirements of [HMDA section 304(b)(5) and (6)]’ shall not apply.” Accordingly, the agencies’ statement reads, for these transactions, those institutions are exempt from the collection, recording, and reporting requirements for some, but not all, of the data points specified in current Regulation C.

The statement also notes this does not affect 2018 Loan/Application Register (LAR) formatting and submission. More specifically, according to the statement:

  • LARs will be formatted according to the previously released 2018 Filing Instructions Guide for HMDA Data Collected in 2018 (2018 FIG).
  • If an institution or credit union does not report information for a certain data field due to the act’s partial exemptions, the institution or credit union will enter an exemption code for the field specified in a revised 2018 FIG that BCFP expects to release later this summer.
  • All LARs are to be submitted to the same HMDA Platform; a beta version of the HMDA Platform for submission of data collected in 2018 will be available later this year for filers to test.

Although the regulators issued a “joint statement,” there were a few variations. The credit union regulator, in the penultimate paragraph, wrote (under the heading “Supervision and Compliance”) that the changes “do not affect the NCUA’s supervision approach to compliance with requirements for recording and reporting 2018 HMDA data.” It refers credit unions to NCUA Letter to Credit Unions on Supervisory Priorities for 2018 (17-CU-09) for more information.

The FDIC, in its statement (Financial Institution Letter 36-2018), noted under “Compliance Statement” that information on the agency’s approach to evaluating institutions’ compliance with HMDA can be found in FDIC FIL-63-2017, which transmits the FDIC Statement on Financial Institutions’ Good Faith HMDA Compliance Efforts.

The “Compliance Statement” by OCC and BCFP repeat the policy announced in December 2017 that the agencies do not intend to require data resubmission for HMDA data collected in 2018 and reported in 2019 “unless data errors are material,” and they do not intend to assess penalties with respect to errors in data collected in 2018 and reported in 2019.

They said collection and submission of the 2018 HMDA data will provide institutions an opportunity to identify any gaps in their implementation of the amended Regulation C and make improvements in their HMDA compliance management systems for future years.

Additionally, they wrote that any examinations of 2018 HMDA data “will be diagnostic” to help institutions identify compliance weaknesses and that OCC and BCFP “will credit good-faith compliance efforts.”

NCUA notice: Information about the Recent Changes to the Home Mortgage Disclosure Act

OCC Bulletin: Home Mortgage Disclosure Act: Statement on the Implementation of the Economic Growth, Regulatory Relief, and Consumer Protection Act Amendments to the Home Mortgage Disclosure Act

FDIC Financial Institution Letter (FIL-36-2018) Home Mortgage Disclosure Act: Statement on the Implementation of the Economic Growth, Regulatory Relief, and Consumer Protection Act Amendments

Bureau of Consumer Financial Protection Issues Statement on the Implementation of the Economic Growth, Regulatory Relief, and Consumer Protection Act Amendments to the Home Mortgage Disclosure Act