On July 5, 2018, three of the regulatory agencies issued statements on how the new regulatory reform law (S. 2155) will affect certain HMDA reporters. Each statement is substantially similar and gives an overview of how the Economic Growth, Regulatory Relief, and Consumer Protection Act amends the Home Mortgage Disclosures Act. Each statement was substantially similar and essentially has three parts.
First, the statement begins by giving an overview of the Act and explains the partial exemptions for some insured depository institutions and insured credit unions from certain HMDA reporting requirements. Each statement explains that a partial exemption applies to banks and credit unions who originate fewer than 500 closed-end and/or 500 open-end lines of credit in each of the two preceding calendar years. As the CFPB states:
“For closed-end mortgage loans or open-end lines of credit subject to the partial exemptions, the Act states that the “requirements of [HMDA section 304(b)(5) and (6)]” shall not apply. Accordingly, for these transactions, those institutions are exempt from the collection, recording, and reporting requirements for some, but not all, of the data points specified in current Regulation C.”
The next part of each statement explains that the new law is not going to affect the format of the LAR for data collected during 2018. Specifically, smaller institutions who will not be required to collect and report information for specified data fields will be instructed to enter a code in each applicable field that will identify the field as being subject to an exemption and not required. The CFPB explained in their statement that they intend to provide additional guidance on the applicability of the new law and how it applies to data collected in 2018. The CFPB stated that this guidance is expected “later this summer.”
The final part of this guidance was a reiteration of previous comments made about how the regulators are going to evaluate the new HMDA requirements. Financial institutions were reminded that the regulators do not plan to assess penalties for 2018 HMDA errors, and only plan to require resubmissions from 2018 data if the errors are considered to be material.
The CFPB statement can be found here.
The FDIC statement can be found here.
The OCC statement can be found here.