CFPB Issues HMDA Final Rule to Implement Partial Exemption

On October 10, 2019 the Consumer Financial Protection Bureau (CFPB) issued a rule which finalizes some parts of its May 2019 Notice of Proposed Rulemaking that we previously reported on. This new final rule extends for two years the current temporary threshold for collecting and reporting data about open-end lines of credit under HMDA. The rule also clarifies partial exemptions from certain HMDA requirements which Congress added in the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA).

For open-end lines of credit, the rule extends for another two years, until January 1, 2022, the current temporary coverage threshold of 500 open-end lines of credit. For data collection years 2020 and 2021, financial institutions that originated fewer than 500 open-end lines of credit in either of the two preceding calendar years will not need to collect and report data with respect to open-end lines of credit. 

For the partial exemptions under the EGRRCPA, the rule incorporates into Regulation C the clarifications from the Bureau’s August 2018 interpretive and procedural rule. This final rule further effectuates the burden relief for smaller lenders provided by the EGRRCPA by addressing certain issues relating to the partial exemptions that the August 2018 rule did not address, such as how the partial exemption applies in an acquisition or merger.

This rule finalizes the above aspects of the May 2019 Notice of Proposed Rulemaking, which also proposed raising the permanent coverage thresholds for closed-end mortgage loans and open-end lines of credit. On July 31, 2019, the Bureau reopened the comment period until October 15, 2019 for aspects of the May 2019 Notice of Proposed Rulemaking related to raising the permanent coverage thresholds. The Bureau has stated that it intends to issue a separate final rule in 2020 addressing these thresholds. 

Essentially, this means that this final rule is part 1 of 2 (or 3) revisions we are still expecting on HMDA.

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