ABA Supports Proposed Changes to HMDA Reporting Thresholds

In a comment letter to the Consumer Financial Protection Bureau this week, the American Bankers Association expressed support for a recent proposal to provide relief for smaller institutions from the Home Mortgage Disclosure Act data collection and reporting requirements. The association concurred with the bureau’s proposed increase to the threshold for closed-end mortgage loans, recommending that the new threshold be set at 100 or higher (up from 25).

“We agree with the bureau’s conclusions that this threshold would not be so high as to impair HMDA’s ability to achieve its statutory purposes, while providing much-needed regulatory relief to institutions hat currently bear significant burdens to report data of limited value,” ABA said. Citing its own independent analysis, the association added that the threshold could be doubled to as high as 200 without affecting HMDA data integrity and recommended that CFPB consider this additional increase.

ABA urged the bureau to remove any requirements related to reporting open-end transactions under HMDA, “as this data lacks value in advancing relevant legislative objectives while imposing very high compliance costs.” At a minimum, the association called for the permanent extension of the temporary coverage threshold of 500 open-end lines of credit. Under the current CFPB proposal, that threshold would be extended for two years, at which time it would be set permanently to 200.

With many small institutions having exited mortgage-related business lines in response to the onerous HMDA reporting requirements, ABA emphasized that these relief measures would incentivize institutions to begin or restart mortgage lending operations.