The Bureau of Consumer Financial Protection (CFPB) has issued an interpretive and procedural rule implementing and clarifying changes to HMDA made by S. 2155 The Economic Growth, Regulatory Relief, and Consumer Protection Act (Act or S.2155). S. 2155 was signed into law May 24, 2018, the Act amends HMDA by adding partial exemptions from HMDA’s requirements for certain transactions made by certain financial institutions. The Act also increases the HMDA reporting threshold to 500 open-end lines of credit, meaning institutions that originated fewer than 500 open-end lines of credit in the two preceding calendar years do not need to collect and report certain data.
This new rule clarifies which data points in HMDA’s Regulation C are covered by the partial exemptions and that only loans and lines of credit that are otherwise reportable under the Regulation count toward the thresholds for the partial exemptions.
S. 2155 also provides that the above partial exemptions are not available to institutions that have received a CRA rating of “needs to improve record of meeting community credit needs” in each of their two most recent CRA examinations, or a rating of “substantial noncompliance in meeting community credit needs” in their most recent exam. The rule clarifies that the CRA examination assessment that would disqualify an institution from the partial exemptions must be made as of December 31 of the preceding calendar year.
CFPB also addresses transition issues with the implementation of the rule. The rule applies to data collected or reported under HMDA on or after May 24, 2018. An institution that is eligible for a partial exemption for a transaction does not need to collect exempt data points on or after May 24, 2018. In addition, such institutions are not required to report certain data that may have been collected on or before May 24, 2018. However, an institution may opt to voluntarily report data that are covered by a partial exemption.
The rule will be effective Sept. 7, 2018.