HMDA – PROPOSED HELOC CHANGE

On July 14, 2017 the Consumer Financial Protection Bureau (CFPB) proposed amendments to Regulation C that would, for a period of two years, increase the threshold for collecting and reporting data with respect to open-end lines of credit so that financial institutions originating fewer than 500 open-end lines of credit in either of the preceding two years would not be required to begin collecting such data until January 1, 2020.

Through outreach, the CFPB has heard increasing concerns from community banks and credit unions that the challenges and costs of reporting open-end lending may be greater than the CFPB had estimated when adopting the 100-loan threshold. Additionally, the CFPB’s analysis of more recent data suggests changes in open-end origination trends that may result in more institutions reporting open-end lines of credit than was initially estimated.

Accordingly, the CFPB is seeking comment on whether to postpone collection of this information for smaller-volume institutions so that the CFPB can study whether the threshold should be adjusted permanently. The CFPB estimates that the temporary 500-loan threshold would still capture about three-quarters of the home-equity lending market, down from about 88 percent at the 100-loan threshold.

The proposed change impacts the definitions of “financial institution” and “nondepository financial institution” contained in §1003.2 and the list of excluded transactions contained in §1003.3.

This most recent proposed change combined with the April 13, 2017 proposed changes and continued delays in the delivery of the CFPB HMDA Platform adds fuel to rumors of a delay in the January 1, 2018 implementation date for the majority of the HMDA changes.

Information about the April 13, 2017 Proposed HMDA Changes are available at https://www.jackscomplianceresource.com/proposed-changes-to-regulations-b-and-c/

The proposed HELOC rule is available at https://files.consumerfinance.gov/f/documents/201707_cfpb_NPRM_HMDA-temporary-threshold-increases.pdf

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