The Home Mortgage Disclosure Act requires most mortgage lenders located in metropolitan areas to collect data about their housing-related lending activity. Annually, lenders must report those data to the appropriate Federal agencies and make the data available to the public. Historically, HMDA has been implemented by the Federal Reserve’s Regulation C. In addition to various substantive amendments, the Dodd-Frank Act transferred rulemaking authority for HMDA to the Bureau of Consumer Financial Protection (CFPB), effective July 21, 2011.
In general, the interim final rules recently published by the CFPB substantially duplicate the inherited regulations, making only certain non-substantive, technical, formatting, and stylistic changes. To minimize any potential confusion, the CFPB is preserving where possible past numbering systems by republishing regulations with CFPB part numbers that correspond to regulations in existence prior to the transfer of rulemaking authority. For example the previous citation to Regulation C was 12 CFR 203. The new citation is 12 CFR 1003. Notably, the interim final rules do not impose any new substantive obligations on regulated entities.
References to the Board and its administrative structure have been replaced with references to the Bureau. Conforming edits have been made to internal cross-references and addresses for filing documentation. Paragraph lettering for definitions has been removed. Conforming edits have been made to reflect the scope of the Bureau’s authority pursuant to HMDA, as amended by the Dodd-Frank Act. Historical references that are no longer applicable, and references to effective dates that have passed, have been removed.
Conforming edits have also been made to reflect new Office of Management and Budget (OMB) control numbers issued for information collections required by Regulation C. Specifically, Form FR HMDA–LAR, the Loan/Application Register Transmittal Sheet, has been edited to add OMB control numbers for the Bureau of Consumer Financial Protection and the National Credit Union Administration and to remove the control number formerly used by the Office of Thrift Supervision.
This interim final rule modifies the current regulatory text by including the Bureau of Consumer Financial Protection as an appropriate Federal agency for receiving reports and removes the Office of Thrift Supervision as an entity to whom financial institutions may be required to report data under HMDA. The Bureau is issuing guidance concurrently with the issuance of this interim rule regarding the appropriate Federal agency to which each financial institution should report 2011 data pursuant to HMDA.
The Dodd-Frank Act amended HMDA to require covered financial institutions to report data with respect to, among other things, the age of mortgagors and mortgage applicants, points and fees payable at origination in connection with a mortgage, the difference between the annual percentage rate associated with a loan and a benchmark rates or rates for all loans, the term in months of any prepayment penalty or other fee or charge payable on repayment of some portion of principal or the entire principal in advance of scheduled payment, the value of the real property pledged or proposed to be pledged as collateral, the actual or proposed term in months of any introductory period after which the rates of interest may change for a loan, the presence of contractual terms or proposed contract terms that would allow the mortgagor or applicant to make payments other than fully amortizing payments during any portion of the loan term, the actual or proposed term in months of the mortgage, the channel through which the mortgage application was made, and the credit score of mortgage applicants and mortgagors.
A change to the regulatory text to require collection of additional data pursuant to the Dodd-Frank Act is a substantive change that is beyond the scope of the interim final rule. Therefore, the Bureau will address those substantive amendments to the HMDA data elements in a future rulemaking.
Institutions are not required to report additional data required by section 304(b)(5) and (6) of HMDA, as amended, “before the first January 1 that occurs after the end of the 9-month period beginning on the date on which regulations are issued by the Bureau in final form with respect to such disclosures.” Further, financial institutions are unable to comply with the obligation to report data regarding the age of mortgagors and mortgage applicants, which is required pursuant to section 304(b)(4) of HMDA, until the
Bureau provides the necessary guidance on the manner of such reporting, including modification of the HMDA Loan/Application Register (HMDA–LAR) form, to accommodate the reporting of age data. Therefore, the Bureau believes that the requirements to report all of the new data elements under HMDA section 304(b)(4)-(6) cannot be effective until the Bureau completes a future rulemaking with respect to the reporting of such data.
So, there are no substantial issues to deal with at this point. You may need to update citations to Regulation C contained in your HMDA policy and procedures, and in your HMDA training materials. Substantial changes will follow.
A copy revised Regulation C is located at: https://www.jackscomplianceresource.com/CFPB-Reg-C-Home-Mortgage-Disclosure-Act.html. The Federal Register copy is available at: https://www.jackscomplianceresource.com/CFPB-The-Inherited-Regulations.html