HMDA Income

Question:  If a commercial officer uses net income to underwrite the loan, should we report Net Income instead of Gross Income on the HMDA-LAR?

Answer:  While the regulation specifies “gross” annual income, it goes on to say, that is relied on in making the credit decision…We believe you should report the income that is used in the credit decision, even if it is not gross.  Thus, you should report the net income since that is what the loan officer used.


Join us for the AUDITING HMDA Webinar. We will answer all the questions submitted during the live webinar, in writing.

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Don’t Forget to Comment on HMDA!

On May 3rd, we alerted you to an Advance Notice of Proposed Rulemaking (ANPR) seeking comment on whether any changes should be made to existing HMDA data fields.

The ANPR specifically requests comment on the following:

1. Whether changes should be made to…any new data point or any data point revised to require additional information…for which the cost…does not justify the benefit…Specifically address any operational challenges, ongoing costs (including the impact of the CFPB’s new submission process), the value of the information from a HMDA perspective and whether the information would be regularly collected anyway;

2. Costs and benefits and proposed alternatives to free-form text fields;

3. If there are any other considerations to take into account in proposing whether to eliminate or revise any new or revised data; and,

4. If there are any new or revised data points for which more explanation is needed.  

Comments are also specifically requested on whether there is a benefit to reporting business loans to a non-natural person that are secured by a multifamily dwelling.  The CFPB seeks information on the following in relation to these types of loans:

5. The value of the data;

6. Other benefits; and,

7. The burden imposed.

If you have thoughts on these items, we strongly encourage you to submit your comments to the CFPB.  The CFPB does request that when responding to an issue, you indicate the number that we’ve provided above.  We’ve prepared a comment letter and have made it available in the Free Lending Tools on our website, not only to encourage you to comment but also to help guide you in the process.  Feel free to add to and/or revise it as you wish.

Comments were originally due by July 8th; however, the CFPB later announced they were extending the deadline.  Comments must now be submitted to the CFPB by October 15th.

Additionally, the CFPB announced their intent to reopen the comment period (which ended June 12th) regarding the permanent HMDA coverage thresholds for closed-end mortgage loans and open-end lines of credit, as well as the effective date for any change in the closed-end coverage threshold.  Since the comment period is being reopened, the CFPB does not look to finalize any change to the closed-end threshold by January 1st.  As a result, the CFPB is looking for comments on a mid-year effective date (e.g. May 2020) versus a January 1,2021, effective date.  Our comment letter for this proposal is also available in our Free Lending Tools.  Comments must now be submitted to the CFPB by October 15th.

Get your comments in today!



HMDA + Approved Not Accepted = Confusion

When it comes to HMDA, there is a lot of confusion on reporting the type of action taken, especially when it comes to Approved Not Accepted.


To understand when you should report Approved Not Accepted you need to understand terms such as “underwriting or creditworthiness conditions” and “customary commitment or closing conditions”.


Listen to the video as Dave explains.




We have a “HMDA Action Taken” webinar coming up on June 25, 2019, where we will get into all the HMDA Action Taken codes and get into the weeds on the more complicated ones, like Approved Not Accepted.  We hope you will join us!


Register NOW!


David Dickinson


Want to see more HMDA tools? Check out our Free “HMDA” Resources HERE!

HMDA: Denied or Approved Not Accepted?

Question:  We approved an applicant, but before closing it was determined that legal access to the property was not obtained (all owners of surrounding BSA Training and Banking Regulations Compliance Consulting Screen Shot 2019 05 30 at 8.57.09 AM 300x172 - HMDA: Denied or Approved Not Accepted?properties did not sign easements).  For HMDA, would this be a denial or approved not accepted?

Answer:  If you ultimately denied the application because of the access issues, you would owe the applicant an adverse action notice for Regulation B purposes.  However, for HMDA this must be reported as “Approved but not Accepted”.  HMDA wants to know how the applicant was treated while Regulation B wants to know how the application was treated.  In this case, the applicant was approved but the application was denied.

Join us for the HMDA Action Taken Deep Dive Webinar on June 25, 2019. We will answer all the questions submitted during the live webinar, in writing.

Register NOW!

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Proposed HMDA Changes

Yesterday, the CFPB issued a proposal that seeks to make changes to the existing HMDA Rule.  They also issued an Advance Notice of Proposed Rulemaking BSA Training and Banking Regulations Compliance Consulting AdobeStock 104791221 300x172 - Proposed HMDA Changes(ANPR) to solicit comments as to whether certain other changes are needed.



The proposed changes include:


1. Raising the HMDA coverage threshold


For closed-end mortgage loans the proposal seeks to permanently increase the current threshold of 25 to either 50 or 100.  This would mean that if you stay below the threshold in either of the two preceding calendar years, you would not have to report closed-end loans as of January 1, 2020.

For open-end lines of credit, the proposal seeks to extend the temporary (and current) threshold of 500 for another two years (until January 1, 2022).  After that date, the proposal seeks to set the threshold permanently at 200.


2. Small Filers


The proposal also seeks to incorporate the Small Filer exemptions into the Regulations.



The ANPR seeks comment on the following:


1. HMDA Data Points


The CFPB is requesting input on the current data fields to determine if they should make any changes or require additional data to be reported.  Specifically, they want to assess if the data requirements appropriately balance the benefits and burdens associated with data reporting.  The CFPB has set out four topics they would like comments to address with respect to the data fields (see page 13 of the ANPR).



2. HMDA Coverage for Certain Business/Commercial Loans


The proposal also requests comments as to whether reporting business/commercial purpose loans extended to a non-natural person (and secured by a multifamily dwelling) are a burdensome and/or whether data actually useful to the CFPB.  Page 15 of the ANPR outlines what they want comments to address.


If you’re still struggling with the existing HMDA Rules, we have a variety of HMDA webinars available On-Demand.  Be sure to check them out!




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