On September 13, 2017 the Office and of the Comptroller of the Currency, Federal Reserve Board, and Federal Deposit Insurance Corporation (Agencies), proposed a rule to amend their respective Community Reinvestment Act (CRA) regulations. The amendments would conform their CRA regulations to changes recently made by the Consumer Financial Protection Bureau to Regulation C, which implements HMDA. The Agencies anticipate issuing the final rule to coincide with the January 1, 2018 effective date of the recent Regulation C changes
The rule proposes to amend the following:
• “Home Mortgage Loan” Definition: In 1995, the Agencies amended CRA regulations to add the definition of “home mortgage loan”, to describe a category of loans that examiners evaluate when assessing a financial institution’s performance under the retail lending test. In order to produce a less-burdensome CRA assessment process, the Agencies relied on the scope of loans reported under Regulation C to define “home mortgage loan.” To conform to the new revisions in Regulation C, the Agencies propose to revise the current definition of “home mortgage loan” in their CRA regulations to mean a closed-end mortgage loan or an open-end line of credit.
• “Consumer loan” Definition: Because the proposed change to the definition of “home mortgage loan” would refer to open-end lines of credit as well as closed-end mortgage loans, the Agencies propose to remove the term “home equity loan” from the list of consumer loan categories provided under the definition of “consumer loan”.
• Public File: Under the changes to Regulation C, effective January 1, 2018, financial institutions will no longer be required to provide the HMDA disclosure statement directly to the public and will only be required to provide a notice that clearly conveys to the public that they can obtain a copy of the financial institution’s disclosure statement on the Bureau’s website. The proposed rule would amend the CRA regulations to require HMDA reporting institutions to only maintain the notice required under Regulation C in their CRA public file, rather than a copy of the HMDA disclosure statement.
The proposed rule would also make technical amendments to remove unnecessary cross references as a result of the amended definitions and remove obsolete references to the Neighborhood Stabilization Program.
The proposed rule is available here.
Other recent HMDA/Regulation C blog articles are available here.
Other recent CRA blog articles are available here.