CFPB Provides Clarifications on HMDA Partial Exemptions under S. 2155

The Consumer Financial Protection Bureau today issued an interpretive rule clarifying several changes to Home Mortgage Disclosure Act regulations made under S. 2155, the bipartisan regulatory reform law. The rule is intended to address concerns raised by banks about S. 2155’s partial exemptions for certain financial institutions from reporting an expanded set of HMDA data points.

S. 2155 provides banks and credit unions with partial exemptions from reporting certain HMDA data points for closed-end mortgage loans if the institution originated fewer than 500 closed-end mortgage loans in each of the two preceding calendar years, and for open-end lines of credit if the institution originated fewer than 500 open-end lines of credit in each of the two preceding calendar years.

Under the interpretive rule, which takes effect upon being published in the Federal Register, banks subject to the partial exemptions may report exempt data fields provided that they report all data fields within any exempt data point that they do choose to report. The rule clarifies that only loans and lines of credit that are otherwise HMDA-reportable count toward the thresholds to qualify for the partial exemptions. It also specifies the 26 data points that are subject to the exemption and the 22 that are covered by the partial exemptions.

The rule clarifies that exemptions do not apply for banks that have received consecutive ratings of “needs to improve” during their two most recent Community Reinvestment Act exams before Dec. 31 of the preceding year. The CFPB said that it will pursue notice-and-comment rulemaking in the future to incorporate today’s interpretations into Regulation C. For more information, contact ABA’s Rod Alba.