CFPB Issues Final HMDA Expansion Rule

The Consumer Financial Protection Bureau today finalized a rule required by the Dodd-Frank Act that expands the data lenders are required to collect and report under the Home Mortgage Disclosure Act. The new required information includes the property value, loan term and the duration of any introductory interest rates, as well as underwriting and pricing details, such as an applicant’s debt-to-income ratio and the loan’s interest rate and discount points.

The rule also requires that covered lenders report information, with some exceptions, about all applications and loans secured by dwellings, including reverse mortgages and open-end lines of credit. One important exception — which ABA and the state associations advocated vigorously for — is for dwelling-secured transactions made for commercial purposes. Lenders do not need to report data for such loans.

In response to feedback, the CFPB eliminated several data points, such as the “risk-adjusted, pre-discounted interest rate,” that it had included in its original proposal. In addition, the bureau responded to ABA and state association requests to provide sufficient transition time. Lenders do not need to begin collecting the new information until 2018 and will report the data in 2019.

Small depository institutions that are located outside a metropolitan statistical area remain excluded from coverage. In addition, the CFPB adopted a uniform loan volume threshold that exempts institutions that made fewer than 25 closed-end mortgage loans or fewer than 100 open-end lines of credit in each of the two preceding calendar years. This threshold will reduce the number of institutions required to report HMDA data by an estimated 22 percent, the bureau said.

“We appreciate the time and attention the Bureau has applied in considering industry comments to prepare the final HMDA rule,” ABA President and CEO Frank Keating said in a statement. “We are pleased that the Bureau has extended the compliance date and excluded the collection of data on most commercial transactions, as ABA advocated.” He added, however, that ABA continues to be concerned about the privacy of bank customers’ data and the significant expansion of data collection requirements.