HMDA HELOC Thresholds

Issue/Inquiry

If the Bank did not originate more than 500 HELOCs in the past two years, is it still responsible for collecting the GMI/HMDA information under the new rules?  If it anticipates originating more than 500 HELOCs in 2018, does it need to collect the new HMDA data fields?

Response Summary

The Bank will not be required to collect HMDA data in 2018 if it did not originate 500 or fewer HELOCs in either of the two preceding calendar years. However, it does have the option of reporting such loans. If it originates 500 or more HELOCs in 2018, it will be required to report HELOCs effective January 1, 2019, since it will have exceeded the threshold in 2018, which is one of the two calendar years preceding 2019. Effective January 1, 2020, the reporting threshold is reduced to 100 open-end lines of credit in either of the two preceding calendar years. If the Bank makes 100 or more HELOCs in either 2018 or 2019, it will be required to report such loans in 2020.

Response Detail

Under the new HMDA reporting rules which went into effect on January 1, 2018, open-end lines of credit are exempt from the reporting requirements if the financial institution originated fewer than 500 such loans in either of the two preceding calendar years. The institution has the option of collecting data for and reporting such loans, if it does so for all applications, originations, and all purchases of such loans that otherwise would have been covered loans during the calendar year that final action was taken. 12 CFR §1003.3(c)(12).

The official commentary offers the example of a bank that originated 50 closed-end mortgage loans in 2016 and 75 closed-end mortgage loans in 2017, and originated 75 and 85 open-end lines of credit in 2016 and 2017, respectively. The bank would be required to report the closed-end mortgage loans it originated or purchased in 2018, since it had exceeded the 25 closed-end mortgage loan threshold for each of the two preceding calendar years, but it would not be required to report the open-end lines of credit it originated or purchased, since it had not met or exceeded the 500-loan threshold in each of the preceding two calendar years. Commentary, 1003.3(c)(3)(12) – 1.

This means that the Bank will not be required to report the HELOCs it makes in 2018, because it will not have made 500 or more HELOCs in either 2016 or 2017, the two calendar years preceding 2018. If it makes 500 or more HELOCs in 2018, it will be required to report such loans effective January 1, 2019, because it will have exceeded the 500-loan threshold in one of the two calendar years preceding 2019.

The Bank should bear in mind that the reporting threshold for open-end lines of credit changes, effective January 1, 2020, at which time a financial institution will be required to collect, record, or report open-end lines of credit if it originated 100 or more of such loans in either of the preceding two calendar years. CFPB, Home Mortgage Disclosure (Regulation C): Small Entity Compliance Guide, pp. 11, 12, 23, 25, 111. Since 2018 and 2019 are the two calendar years preceding 2020, it will be required to report HELOCs in 2020, if it made or exceeded 100 HELOCs in either of those years.

This entry was posted on Monday, January 8th, 2018 at 6:00 am.