Dear Boards of Directors and Chief Executive Officers:
On May 12, 2020, the Consumer Financial Protection Bureau issued a final rule (opens new window) amending parts of Regulation C, which implements the Home Mortgage Disclosure Act (HMDA). The final rule increases the threshold for collecting and reporting data about closed-end mortgage loans from 25 to 100, effective July 1, 2020. It also increases the threshold for collecting and reporting data about open-end lines of credit, from 100 to 200, effective January 1, 2022 (when the current temporary threshold of 500 open-end lines of credit expires).1 The final rule does not change the 2020 institutional asset size threshold. Credit unions with total assets less than or equal to $47 million as of December 31, 2019, are not subject to HMDA in 2020.2
This alert describes the changes in the reporting threshholds for credit unions. For more comprehensive information, please refer to the CFPB’s final rule (opens new window).
Closed-End Coverage Threshold
The final rule increases the closed-end mortgage loan threshold from 25 to 100, effective July 1, 2020. For calendar year 2020, a credit union may have been subject to HMDA’s closed-end requirements in place as of January 1, 2020, if it originated at least 25 closed-end mortgage loans in 2018 and 2019. These credit unions will no be longer subject to HMDA’s closed-end requirements as of July 1, 2020, if they originated fewer than 100 closed-end mortgage loans in 2018 or 2019.
The CFPB’s final rule affects newly excluded credit unions’ collection, recording, and reporting obligations with respect to 2020 HMDA data as described below:
- Collecting: Newly excluded credit unions can stop collecting HMDA data on their closed-end mortgage loans beginning July 1, 2020. Please note that other laws or regulations may require credit unions to collect data on home loan activity. For example, Regulation B (opens new window) requires lenders to collect information regarding an applicant’s ethnicity, race, sex, marital status, and age when credit sought is primarily for the purchase or refinancing of a dwelling that is, or will be, the applicant’s principal residence and will secure the credit.
- Recording: Newly excluded credit unions must still record closed-end data for the first quarter of 2020 on a loan/application register no more than 30 calendar days after the end of the first quarter. However, they will not be required to record closed-end data for the second quarter of 2020 because the deadline for recording that data is after July 1, 2020.
- Reporting: Because newly excluded credit unions collecting HMDA data in 2020 would not otherwise report this data until early 2021, the final rule relieves these credit unions of the obligation to report by March 1, 2021, data collected in 2020 on closed-end mortgage loans (including data collected in 2020 before July 1, 2020). Under the final rule, a newly excluded credit union may voluntarily report HMDA data on closed-end mortgage loans in 2021 as long as the credit union reports data for the full calendar year 2020.
For calendar year 2021, a credit union is not required to collect HMDA data for closed-end mortgage loans if it originated fewer than 100 closed-end mortgage loans in 2019 or 2020.
Open-End Coverage Threshold
The final rule sets the open-end line of credit threshold at 200, effective January 1, 2022, when the current temporary threshold of 500 open-end lines of credit expires. Beginning in 2022, credit unions that originated at least 200 open-end lines of credit in each of the two preceding calendar years must collect and record HMDA data on their open-end lines of credit and report that data by March 1 of the following calendar year.
Credit unions should read the provisions of the final rule and Regulation C (opens new window) to determine the potential effects on their operations. The current version of Regulation C will not be updated until the effective dates of the amendments.
If you have questions about this information, please contact the NCUA’s Office of Consumer Financial Protection at 703.518.1140 or ComplianceMail@ncua.gov. Credit unions can also contact their NCUA regional office or their state supervisory authority.
Rodney E. Hood