HMDA Partial Exemption and Information Collected Prior to its Effective Date

Issue/Inquiry

For HMDA reporting, does the Bank need to report all fields, including the fields that were exempted on May 24^th for loans that were acted upon prior to when the exemption was granted?

Response Summary

Under amendments to HMDA by the Economic Growth, Regulatory Relief, and Consumer Protection Act, an insured depository institution or insured credit union is partially exempt from reporting some of the data presently required if the closed-end mortgage loans or open-end lines of credit are below the 500-loan threshold for each of the two preceding calendar years. The CFPB has issued an interpretive and procedural rule to implement these changes, which took effect on September 7, 2018. It indicates that, in 2019, an institution eligible for a partial exemption will not be required to report certain data that may have been collected on or before May 24, 2018.

Response Detail

On May 24, 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act (“Economic Growth Act”) was signed into law. The Economic Growth Act amended the Home Mortgage Disclosure Act (“HMDA”) by adding partial exemptions from the HMDA’s reporting requirements for closed and open-end transactions made by certain insured depository institutions and insured credit unions. 83 FR 45325, 45325.

An insured depository institution or insured credit union must have originated fewer than 500 closed-end mortgage loans in each of the two preceding calendar years in order for its closed-end mortgage loans to qualify for the partial exemption. In addition, it must have originated fewer than 500 open-end lines of credit in each of the two preceding calendar years in order for its open-end lines of credit transactions to qualify for a partial exemption. 83 FR 45325, 45326.

This means that if it made more than 500 closed-end mortgage loans, but fewer than 500 open-end lines of credit, its open-end lines of credit will be subject to the partial exemption, but its closed-end mortgage loans will not.

The Bureau of Consumer Financial Protection (“CFPB”) has adopted an interpretative and procedural rule to implement the Economic Growth Act amendments to HMDA, which went into effect upon its publication in the Federal Register on September 7, 2018. It indicates that the partial exemption provided by the Economic Growth Act took effect on May 24, 2018. An insured depository institution or insured credit union that is eligible for a partial exemption for a transaction does not need to collect exempt data points on or after May 24, 2018. With respect to data collected from January 1, 2018, to May 23, 2018, such institution is not required to report exempt data in 2019 that may have been collected on or before May 24, 2018, although it has the option of doing so. 83 FR 45325, 45333 (footnote 28).

For example, if an insured depository institution is eligible for a partial exemption for its closed-end mortgage loans and it collected data for such loans prior to May 24, 2018, it is not required to report any data covered by the partial exemption in 2019. CFPB, Executive Summary of the 2018 HMDA Interpretative and Procedural Rule (August 31, 2018).

This means that the Bank was required by the HMDA to collect certain data prior to the enactment of the Economic Growth Act on May 24, 2018. If it qualifies for the partial exemption, it is no longer required to collect exempt data points on or after May 24, 2018. Moreover, it will not be required to report data collected prior to May 24, 2018 that would be covered by the partial exemption.

 

 

 

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