New HMDA Rules Change Reporting Threshold and Data Collection
On October 15, 2015, the Consumer Financial Protection Bureau (CFPB) at long last announced that it has updated the Home Mortgage Disclosure Act (HMDA). These changes were expected to be released over the summer and the industry has been waiting since then to learn what exactly the new rules will require. The changes will require new HMDA data to be collected starting January 1, 2018, and the new information will be made available to the public in 2019.
New pieces of information to be collected are the property value, the term of the loan, the term of any prepayment penalty, and the duration of any teaser or introductory interest rates. Financial institutions will also report debt-to-income ratios, loan interest rates, and discount points.
There is also a new reporting threshold in the rule. Small financial institutions that have low loan volume will no longer have to report HMDA data. You will not need to report HMDA data if you did not originate at least 25 closed-end mortgage loans or at least 100 open-end lines of credit in each of the two preceding calendar years. The CFPB estimates that the new threshold will reduce the overall number of banks and credit unions required to report HMDA data by an estimated 22 percent.
CLA’s financial institution regulatory compliance team assists banks and credit unions nationwide in establishing regulatory compliance programs, conducting compliance testing, and training staff on regulations. Justin Robinson is a member of CLA’s regulatory compliance team and can be reached at justin.robinson@CLAconnect.com.
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