New HMDA Coverage Test (2017 & 2018)

When the CFPB issued their HMDA Final Rule back in October 2015, they included a strange twist concerning which institutions are subject to HMDA in 2017 and 2018. First, to be subject to HMDA, you have to have an office in a MSA and be above the asset threshold. The threshold hasn’t been set yet, but will likely be around $47 million. Second, beginning in 2017, if your institution didn’t originate at least 25 home purchase loans (or refinance of home purchase loans) in each of the two prior calendar years (2015 & 2016), your institution is exempt from HMDA. These loans could be to purchase/refinance ANY dwelling. Factors such as whether it’s a 1-4 family or multi-family dwelling; first or subordinate lien; primary home, secondary home or rental are not considered for this test. There are some exemptions; however, that are found in §1003.4(d). They include temporary financing, the purchase of a pool of loans, the purchase of only the servicing, etc.

If you qualify for this “low volume exemption”, you’re done with HMDA – at least for 2017. Keep in mind; however, you could still be subject to HMDA again in 2018. If your institution makes at least 25 home purchase/refinance of home purchase loans, keep doing what you’re doing in 2017. The current rules will still be in effect. The data collection and other coverage changes don’t take effect until 2018.

Beginning in 2018, there’s a new institution coverage and “low volume exemption” test. Specifically, did your institution originate at least: 

1. 25 closed-end mortgage loans (“Loans”); or, a

2. 100 open-end lines of credit secured by a lien on a dwelling (“Lines”).

If you meet these two tests, your bank is subject to the new HMDA requirements.

Note: The 2017 coverage test only counts home purchase and refinance of home purchase loans. In 2018, the coverage test is different. It counts ALL “covered loans” which includes home equity loans, home improvement loans, etc. Some banks may be subject to HMDA in 2016, exempt in 2017 and then subject to HMDA again in 2018.

Clear as mud? Be sure to join us for our “New HMDA Requirements” webinar on June 9, 2016.  We will tackle these requirements and give you some tips on getting your implementation plan in place.  All BCC Webinars include:

• A comprehensive reference manual
The manual will tell you everything you need to know including citations from the Regulation.

• Downloadable recording
The recording includes audio, as well as video of the presentation slides. Once you download the recording, it’s yours. Share it with your Team for as long as you want.

• Written answers to ALL questions
You can pre-submit and/or ask questions during the live training. Every question will be answered in writing and sent to all attendees within a week or two. This is a valuable training resource!

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