OCC issues guidance for dealing with new, lower HMDA closed-end mortgage reporting threshold

Guidance for complying with the new threshold for reporting closed-end mortgage loans, now at 25 originated in each of the two preceding calendar years, was issued Wednesday by the regulator of national banks

In a bulletin, the Office of the Comptroller of the Currency (OCC) said the new threshold for reporting Home Mortgage Disclosure Act (HMDA, Regulation C) data is due to a recent court decision. Formerly, the threshold was 100 closed-end mortgage loans, as set by the 2020 HMDA final rule, the agency said.

The change was made, the OCC said, in the wake of a federal court order issued in September that vacated the 2020 rule as to the loan volume reporting threshold for closed-end mortgage loans. That order reverted the threshold to that established by the 2015 HMDA Final Rule. That required banks originating at least 25 closed-end mortgage loans in each of the two preceding calendar years (25-loan threshold) to be subject to HMDA data collection and reporting requirements.

Other key points of the bulletin included:

  • Banks that originated more than 25 of the loans but fewer than 100 in either or both of the two preceding calendar years “may need to make adjustments to policies and procedures to comply with reporting obligations. These changes may require time to implement,” the OCC said.
  • The agency does not intend to assess penalties for failures to report closed-end mortgage loan data on reportable transactions conducted in 2022, 2021, or 2020 for affected banks that meet Regulation C’s other coverage requirements.
  • Examinations conducted in affected banks regarding HMDA reportable transactions from 2022, 2021, or 2020 will be “diagnostic” to help banks identify compliance weaknesses.
  • Collection and submission of 2023 HMDA data will provide affected banks with an opportunity to identify gaps in and make improvements to their HMDA compliance management systems.

Home Mortgage Disclosure Act: Loan Origination Threshold Changes