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 (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!
Want to know more about HMDA? – https://www.bankerscompliance.com/banking-regulations-compliance-services/reviews-2/hmda/
2019 HMDA Getting It Right Guide
Just a heads up that the FFIEC has released the 2019 version of their HMDA Getting it Right Guide. The updated guide incorporates amendments imposed by the Economic Growth, Regulatory Relief and Consumer Protection Act and the CFPB’s 2018 HMDA interpretive rule.
If you still need help to understand the HMDA requirements, we are here to help! We have several HMDA webinars coming up in the next couple months and even more that are available on demand. Check them out today!
Annual Disclosure Statement Rescinded
On Friday, March 15th, we alerted you that the deadlines to update your CRA Public File (all banks) and Annual Disclosure Statement (FDIC Banks only) is approaching.
If you are an FDIC bank subject to the Annual Disclosure Statement requirements, we have some good news! Just this morning, the FDIC issued a Final Rule rescinding these requirements. The Final Rule is effective on April 17, 2019.
CRA Public File & Annual Disclosure Statement Deadlines Approaching
Just a friendly reminder that your Community Reinvestment Act (CRA) Public File must be updated by April 1, 2019. This includes the public files kept at both the main office and each branch location (if applicable). For a full listing of what you should include in your CRA Public File, please refer to §345.43 (FDIC), §25.43 (OCC), or §228.43 (Federal Reserve).
The following items are often overlooked when updating your CRA Public File:
- Any branches opened or closed by the financial institution in the current year and each of the prior two calendar years;
- Current services offered by the financial institution;
- Up-to-date transaction fees charged by the financial institution; and,
- For small and intermediate-small financial institutions only, an up-to-date loan-to-deposit ratio for each quarter of the prior calendar year.
Also, if your institution is FDIC-regulated, you must make updates to your annual disclosure statement. This entails having year-end Call Report information for both 2018 and 2017 available to the public by March 31, 2019. The annual disclosure statement must be signed by an authorized officer of the institution and include the following disclaimer:
This statement has not been reviewed, or confirmed for accuracy or relevance by the Federal Deposit Insurance Corporation.
On a side note, the FDIC proposed to rescind the annual disclosure statement requirements on October 25, 2018. There has been no final action taken on this as of today’s date. – See update here.
Learn about the Banker’s Compliance Consulting Team.
2019 Rural/Underserved Lists
Rural and Underserved Counties Lists are now available. Here’s a quick rundown of where these lists
come into play.
To be eligible to originate Balloon Payment
QMs, you must be a small creditor. To be
a small creditor you must meet an asset test, a loan volume test and a rural
and underserved test. If you originate
at least one closed-end, consumer-purpose, first-lien loan secured by a
dwelling located in an area identified on one of these lists in 2019, it means
you meet the rural and underserved test for 2020 and for applications received
before April 1, 2021.
Small creditors can also be exempt from
the HPML escrow requirement, if they don’t maintain escrow accounts. If you originate at least one closed-end,
consumer-purpose, first-lien loan secured by a dwelling located in an area
identified on one of these lists in 2019, it means you meet the rural and
underserved test for 2020 and for applications received before April 1, 2021.
If you originate HPML’s and find
yourself subject to the additional appraisal requirement (due to the timing of
when the seller became the owner and the purchase price), you don’t have to
worry about the additional appraisal if the property is located in a rural
You can also use the CFPB’s Rural and Underserved Areas Tool to determine whether a specific address is located in a rural or underserved area.
If you would like to learn more about the requirements for Qualified Mortgage & Higher-Priced Mortgage Loans, be sure to join us on April 23, 2019, for our Ability to Repay, Qualified Mortgage, High Cost & Higher Priced Mortgage Loans webinar.