BCFP rule interprets, clarifies recent reform law’s partial HMDA exemptions

Bureau plans future notice-and-comment rulemaking

A final interpretive and procedural rule to “implement and clarify” the partial exemptions from requirements of the Home Mortgage Disclosure Act (HMDA) in the recently enacted Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) was issued Friday by the Bureau of Consumer Financial Protection (BCFP), and it takes effect upon publication in the Federal Register.

The bureau issued the rule to effectuate the law’s requirements and provide answers to financial institutions about the impact of the exemptions, according to a summary included with the final rule notice.

“Financial institutions have raised questions about the new partial HMDA exemptions and how the exemptions affect collection and reporting of data for transactions with final action taken in 2018 or subsequent years,” the notice states. “To provide timely answers to these questions, the Bureau is issuing this interpretive and procedural rule that implements and clarifies section 104(a) of the Act and effectuates the purposes of the Act and HMDA.”

Section 104(a) of EGGRPA contains partial exemptions from HMDA requirements – which are implemented under the bureau’s Regulation C – for federally insured depository institutions (banks and credit unions) regarding closed-end mortgage loans if they originated fewer than 500 such loans in each of the two preceding calendar years; and regarding open-end lines of credit, also if the institutions originated fewer than 500 of them in the two preceding calendar years. However, the statute disallows the exemptions for certain institutions receiving poor ratings under the Community Reinvestment Act (CRA).

The federal bank and credit union regulators, and BCFP, issued statements in July seeking to clarify the impact of the reform law’s partial HMDA exemptions. Briefly, the exemptions pertain to some, but not all, of HMDA’s requirements for the collection, recording and reporting requirements. They do not affect the formatting and submission of the 2018 Loan/Application Register (LAR), regulators noted.

The BCFP, a release Friday, said its rule:

  • clarifies that insured depository institutions and insured credit unions covered by a partial exemption have the option of reporting exempt data fields as long as they report all data fields within any exempt data point for which they report data;
  • clarifies that only loans and lines of credit that are otherwise HMDA-reportable count toward the thresholds for the partial exemptions;
  • clarifies which of the data points in Regulation C are covered by the partial exemptions;
  • assigns a non-universal loan identifier for partially exempt transactions for institutions that choose not to report a universal loan identifier; and
  • clarifies the exception to the partial exemptions for negative Community Reinvestment Act (CRA) examination history.

Friday’s notice also notes publication of an updated filing instructions guide for the 2018 LAR.

“At a later date, the Bureau anticipates that it will initiate a notice-and-comment rulemaking to incorporate these interpretations and procedures into Regulation C and further implement the Act,” the bureau stated.

Interpretive and procedural rule

Updated filing instructions guide (FIG)

Bureau of Consumer Financial Protection Issues Rule to Implement and Clarify New HMDA Amendments (press release)

 

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