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July 31, 2017

Exempt HELOCs, more from HMDA reporting, NAFCU urges CFPB

NAFCU urged an exemption from Home Mortgage Disclosure Act reporting for all home equity lines of credit or, in the alternative, higher reporting thresholds for close-end and open-end loans in an official comment letter Monday to the CFPB.

In addition, NAFCU urged that the CFPB raise the asset-size exemption for covered institutions from $44 million to $100 million, matching the regulatory definition of a "small" credit union; and delay effective date of the bureau's 2015 HMDA rule changes one year to Jan. 1, 2019.

"As not-for-profit, member-owned financial institutions, credit unions have served a vital role as affordable and responsible lenders in their communities," Andrew Morris, NAFCU's regulatory affairs counsel, wrote in Monday's comment letter. He said NAFCU and its members support HDMA's purpose – promoting fair lending and equitable access to housing – but the rule "must undergo substantial adjustment to fairly achieve these statutory purposes."

If the CFPB opts not to exempt HELOCs, Morris said, the bureau should instead raise the rule's open-end line of credit threshold from 100 loans in each of the preceding two years to 500; and the closed-end mortgage loan threshold from 25 in each of the preceding two years to 150, at a minimum.

Morris said higher exemption levels for covered lenders and transactions would offer "substantive relief" to credit unions. These changes plus a year's delay in implementation, he wrote, "will ensure continued access to affordable credit without compromising the broader, statutory aims of HMDA."

Monday's letter was sent in response to the CFPB's recent proposal to raise the HELOC reporting threshold from 100 loans/two years to 500 loans/two years. This change followed a NAFCU-sought letter from Sens. Mike Rounds, R-S.D., and Heidi Heitkamp, D-N.D., urging the bureau to delay or modify its HMDA rule.

Tbe CFPB proposal would temporarily raise the HELOC reporting threshold, making it effective for 2018 and 2019, as it conducts a review.