The Consumer Financial Protection Bureau released Home Mortgage Disclosure Act enforcement guidance following a recent court ruling vacating its 2020 HMDA final rule.
Background: A U.S. district court in September vacated the higher loan-volume threshold for closed-end mortgage loans established under the 2020 HMDA rule. The decision means that the threshold for reporting data on closed-end mortgage loans is now the 2015 level of 25 loans in each of the two preceding calendar years, down from the 100-loan threshold set by the 2020 rule.
Guidance: In a blog post, the CFPB said:
It recognizes that financial institutions affected by this change may need time to implement or adjust policies and operations to come into compliance.
In these circumstances, the CFPB does not view action regarding these institutions' HMDA data as a priority.
It does not intend to initiate enforcement actions or cite HMDA violations for failures to report closed-end mortgage loan data collected in 2022, 2021, or 2020 for institutions subject to the CFPB's enforcement or supervisory jurisdiction that meet Regulation C's other coverage requirements and originated at least 25 closed-end mortgage loans in each of the two preceding calendar years but fewer than 100 closed-end mortgage loans in either or both of the two preceding calendar years.
Outlook: The prudential banking regulators traditionally issue interagency announcements on HMDA expectations, so the agencies could follow the CFPB post with joint guidance.
ICBA Position: ICBA is cautioning policymakers that the regulatory burden on community banks that were previously exempt from HMDA reporting outweighs any benefits to the agency and consumer groups of accessing the aggregate data points. ICBA is reviewing the ruling and blog post and will continue to raise concerns with the CFPB.