On 4/16/17, the CFPB released the long-awaited final rule which changes the threshold of mortgage originations for both closed-end and open-end credit, which determines whether or not a financial institution is a HMDA reporter.
In summary, this new rule makes two main changes:
Effective July 1, 2020, the final rule permanently raises the closed-end coverage threshold from 25 to 100 closed-end mortgage loans in each of the two preceding calendar years.
Effective January 1, 2022, when the temporary threshold of 500 open-end lines of credit expires, the final rule sets the permanent open-end threshold at 200 open-end lines of credit in each of the two preceding calendar years.
Now, while this is great news for some, it is important to understand a few things. First, those who have been required to report HMDA Data so far in 2020 need to continue doing so until July 1, 2020. In addition, this means that your 1st quarterly HMDA LAR must be updated by April 30, 2020. Secondly, when July 1, 2020 hits, your staff will need to understand how to collect GMI/DI under Regulation B. This will be a BIG CHANGE for some, so it is important to make sure you start preparing now for this change, as your lending team is going to need training prior to pulling the plug on HMDA on July 1, 2020.
To assist current HMDA reporters that will now be exempt starting July 1, 2020, we will soon be offering something in our store (possibly as early as next week) to walk financial institutions through what they need to do with this change, so keep an eye out for future resources from the Compliance Cohort.
The HMDA final rule can be found here.
