July 14, 2017

CFPB releases proposed HMDA change on HELOC reporting

The CFPB on Friday issued proposed changes to its Home Mortgage Disclosure Act that would temporarily raise the home equity line of credit reporting threshold for smaller financial institutions, including credit unions. Comments on the proposal are due by July 31; NAFCU will be submitting comments.

Currently, under the HMDA rules that are slated to take effect in January, financial institutions will be required to report home-equity lines of credit if they made 100 such loans in each of the last two years. The CFPB's new proposal would increase that threshold to 500 loans through 2018 and 2019, while the bureau decides whether to make the change permanent.

CFPB Director Richard Cordray announced last week, in response to a NAFCU-sought letter from Sens. Mike Rounds, R-S.D., and Heidi Heitkamp, D-N.D., that he would propose these changes. Rounds and Heitkamp wrote Cordray last month urging the bureau to delay or modify its HMDA rule. The two also introduced a NAFCU-backed bill to both raise the loan threshold for HMDA reporters and delay implementation of the HMDA rule by one year.

Under their bill, titled the Home Mortgage Disclosure Adjustment Act, depository institutions that have originated fewer than 500 open-end lines of credit and closed-end mortgages in each of the previous two years would be exempt from HMDA reporting and recordkeeping requirements.

In general, the CFPB's final HMDA rule changes are set to take effect Jan. 1, with most data submissions under the new provisions due in 2019. The rule changes affect HELOCs, establish transactional thresholds for coverage and expand the number of HMDA data points to be collected from credit unions.

NAFCU President and CEO Dan Berger urged Cordray in May to delay the rule's effective date to Jan. 1, 2019.