Matthew Staggs

Matthew A. Staggs, Esq.
Finance Law, Real Estate Law

Stephen G. Perry, Esq.
Finance Law, Real Estate Law

The Home Mortgage Disclosure Act (the “HMDA”) requires certain types of financial institutions (e.g., banks, credit unions, savings associations, and other types of for-profit financial institutions) to collect and report specific loan-level information regarding home mortgage loans. Specifically, the HMDA requires these financial institutions to collect and report information regarding the home mortgage loan itself, the property that the home mortgage loan is secured by, the disposition of the home mortgage loan application, and the applicant applying for the home mortgage loan. According to the Federal Register, the purposes of requiring these financial institutions to collect and report such information are “(i) to help determine whether financial institutions are serving the housing needs of their communities; (ii) to assist public officials in distributing public-sector investment so as to attract private investment to areas where it is needed; and (iii) to assist in identifying possible discriminatory lending patterns and enforcing antidiscrimination statutes.”

The Consumer Financial Protection Bureau (the “CFPB”) has established a transactional coverage threshold regarding whether a financial institution is required to collect and report information for a home mortgage loan under the HMDA. Currently, the CFPB exempts a financial institution that originates closed-end home mortgage loans from the collecting and reporting requirements under the HMDA if the financial institution originates fewer than 25 closed-end home mortgage loans in each of the two preceding calendar years. The CFPB estimates that there are currently 4,960 financial institutions that are required to collect and report information for a closed-end home mortgage loan under the HMDA.

In May of 2019, the CFPB proposed to increase the transactional coverage threshold that exempts a financial institution that originates closed-end home mortgage loans from the collecting and reporting requirements under the HMDA. Specifically, the CFPB is proposing that a financial institution that originates fewer than either 50 closed-end home mortgage loans, or alternatively 100 closed-end home mortgage loans, would be exempt from the collecting and reporting requirements under the HMDA. The CFPB estimates that if the transactional coverage threshold is increased from 25 to 50 closed-end home mortgage loans, approximately 745 out of approximately 4,263 financial institutions that are required to collect and report information for a closed-end home mortgage loan under the HMDA (i.e., approximately 17%) would no longer be required to do so under the HMDA. Additionally, the CFPB estimates that if the transactional coverage threshold is increased from 25 to 100 closed-end home mortgage loans, approximately 1,682 out of approximately 4,263 financial institutions that are required to collect and report information for a closed-end home mortgage loan under the HMDA (i.e., approximately 39%) would no longer be required to do so under the HMDA.

Although the CFPB originally expected to implement any increase to the transactional coverage threshold on January 1, 2020, the CFPB decided to delay such implementation, if any, to likely May 1, 2020 or January 1, 2021, to allow stakeholders to have sufficient time to review the release of the 2018 HMDA information that was collected and reported.

For additional information or questions regarding the proposal to the HDMA or whether a financial institution is required to collect and report information for a home mortgage loan under the HMDA, please contact finance attorneys Stephen Perry at sperry@blalockwalters.com or Matthew Staggs at mstaggs@blalockwalters.com.

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