CFPB Proposes Changes to Data Points Required by 2015 HMDA Rule

One of the goals of CFPB in gathering information in this proposed rule is to ensure that the data requirements established in the 2015 HMDA Rule appropriately balance the benefits and burdens associated with data reporting. Financial institutions were required to report their first data pursuant to the 2015 HMDA Rule by March 01, 2019. Now that financial institutions have completed their first submissions of the additional information required under the 2015 HMDA Rule and institution-specific submissions are available to the public, CFPB believes that they and other stakeholders may have additional and more accurate information to offer on the benefits and burdens associated with the data points required by the 2015 HMDA Rule. 

CFPB seeks to assess the extent to which requiring reporting of information on business- or commercial-purpose loans made to a non-natural person and secured by a multifamily dwelling imposes burdens on financial institutions and furthers the purposes of HMDA. CFPB seeks information that might assist in deciding whether to propose to exclude such transactions from the requirements of HMDA, including information about the following:

• Value that data on such transactions provides in serving the purposes of HMDA
• Other benefits associated with reporting such transactions
• Burden imposed by the requirement to report data on such transactions

HMDA, which CFBP issued in October 2015, requires certain depository institutions and for-profit non-depository institutions to collect, record, and report data about origination and purchases of mortgage loans as well as mortgage loan applications that do not result in origination. The 2015 HMDA Rule implemented the new data points specified in the Dodd-Frank Act and re-adopted certain pre-existing data points added to Regulation C by the FED. The 2015 HMDA Rule added data points pursuant to the discretionary authority of CFPB under the HMDA sections 304(b)(5) and (6) and revised certain pre-existing data points to provide for greater specificity or additional information in reporting. The 2015 HMDA Rule also requires reporting of applications for, and origination of, dwelling-secured business- or commercial-purpose closed-end mortgage loans and open-end lines of credit for home purchase, refinancing, or home improvement purposes. Prior to the 2015 HMDA Rule, Regulation C covered closed-end, business- or commercial-purpose loans made to purchase, refinance, or improve a dwelling. 

Before institutions had to comply with the new data reporting requirements in the 2015 HMDA Rule, CFPB, in September 2017, had issued a final rule amending certain aspects of the 2015 HMDA Rule (2017 HMDA Rule). Among other things, the 2017 HMDA Rule addressed certain technical errors in the 2015 HMDA Rule, eased the burden of reporting certain data requirements, and clarified key terms to facilitate compliance with Regulation C. In December 2017, CFPB issued a statement in which it indicated that it intended to engage in a rulemaking to reconsider various aspects of the 2015 HMDA Rule, such as the institutional and transactional coverage tests and the discretionary data points of the rule. This proposed rule is part of that rulemaking. Furthermore, section 104(a) of the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act, which was signed into law on May 24, 2018, amended section 304(i) of HMDA by adding partial exemptions from the HMDA requirements for certain transactions of insured depository institutions and insured credit unions. Some data points about which the CFPB is soliciting information in this proposed rule are covered under the EGRRCP Act partial exemptions.

Related Link: Federal Register Notice

Comment Due Date: July 08, 2019

Keywords: Americas, US, Banking, Securities, Data Points, Regulation C, Reporting, Dodd-Frank Act, EGRRCP Act, Home Mortgage, HMDA, CFPB