CFPB Amends Regulation C on Home Mortgage Disclosures
CFPB finalized amendments to Regulation C, which is the regulation on home mortgage disclosures. The amendments adjust the threshold for reporting data about open-end lines of credit by extending the temporary threshold of 500 open-end lines of credit to January 01, 2022. CFPB also incorporated into Regulation C the interpretations and procedures from the interpretive and procedural rule that was issued on August 31, 2018 and further implemented the partial exemptions from the requirements under the Home Mortgage Disclosure Act (HMDA) that the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act recently added to HMDA; this includes how to determine whether a partial exemption applies to a transaction after a merger or acquisition. The final rule will become effective on January 01, 2020, with certain exceptions that become effective on January 01, 2022.
In the EGRRCP Act, Congress added partial exemptions from the HMDA requirements that exempt certain insured depository institutions and insured credit unions from reporting some but not all HMDA data for certain transactions. The final rule also extends, for two years, a temporary adjustment to Regulation C institutional and transactional coverage threshold for open-end lines of credit. Moreover, in August 2018, CFPB had issued an interpretive and procedural rule to implement and clarify the EGRRCP Act amendments to HMDA. This final rule incorporates into Regulation C the interpretations and procedures in the rule, with minor adjustments, by adding new § 1003.3(d) relating to the partial exemptions and making various amendments to the data compilation requirements in § 1003.4.
Additionally, CFPB intends to address in a separate final rule the changes it proposed to the permanent coverage thresholds for open-end lines of credit and closed-end mortgage loans; CFPB expects to issues this separate final rule in 2020. In the interim, extending the current temporary increase in the open-end coverage threshold for an additional two years will allow CFPB to fully consider the appropriate level for the permanent open-end coverage threshold for data collected beginning January 01, 2022, after reviewing additional comments relating to that aspect of the proposal. Such an extension will ensure that any institutions that are covered under the new permanent open-end coverage threshold have until January 01, 2022 to comply.
Regulation C requires financial institutions to report HMDA data. HMDA requires certain depository institutions and for-profit nondepository institutions to report data about originations and purchases of mortgage loans as well as mortgage loan applications that do not result in originations (for example, applications that are denied or withdrawn). The purposes of HMDA are to provide the public with loan data that can be used to:
- Help determine whether financial institutions are serving the housing needs of their communities
- Assist public officials in distributing public-sector investment to attract private investment to areas where it is needed
- Assist in identifying possible discriminatory lending patterns and enforcing anti-discrimination statutes
Related Link: Federal Register Notice
Effective Date: January 01, 2020 (with exceptions)
Keywords: Americas, US, Banking, HMDA, EGRRCP Act, Reporting, Regulation C, Disclosures, Home Mortgage Disclosures, CFPB
Featured Experts
Laurent Birade
Advises U.S. and Canadian financial institutions on risk and finance integration, CCAR/DFAST stress testing, IFRS9 and CECL credit loss reserving, and credit risk practices.
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Previous Article
HKMA Outlines Consumer Protection Measures for Open API FrameworkRelated Articles
HKMA Sets Out Regulatory Treatment for Personal Loan Guarantee Scheme
HKMA has published a circular that sets out the regulatory and reporting treatment for loans that participating authorized institutions may grant to eligible borrowers under the 100% Personal Loan Guarantee Scheme.
ECB Completes Targeted Review of Internal Models of Banks
ECB published the results of the assessment of internal models that banks use to calculate risk-weighted assets for credit, market, and counterparty credit risks.
PRA on Regulatory Treatment of Loans Under Mortgage Guarantee Scheme
PRA published a statement on the regulatory treatment of retail residential mortgage loans under the Mortgage Guarantee Scheme, or MGS.
FCA Consults on Rules and Reporting Forms for Investment Firms Regime
FCA is consulting, via CP21/7, on the second phase of proposed rules to introduce the UK Investment Firm Prudential Regime (IFPR).
HMT and BoE Decide to Explore Central Bank Digital Currency in UK
HM Treasury and BoE announced the joint creation of a Central Bank Digital Currency (CBDC) Taskforce to coordinate the exploration of a potential central bank digital currency in UK.
EIOPA Sets Out Expectations on Use of Climate Risk Scenarios in ORSA
EIOPA published an opinion to set out its expectations on the supervision of the integration of climate change risk scenarios by insurers in their Own Risk and Solvency Assessment (ORSA).
EC Sets Out Standards for MREL Reporting by Competent Authorities
EC published the Implementing Regulation 2021/622 that lays down implementing technical standards for reporting of the minimum requirement for own funds and eligible liabilities (MREL).
BCBS to Advance Work on Suptech, Climate Risk, and Basel Monitoring
BCBS has set out the strategic work priorities, as part of its the work program for 2021-22.
Bundesbank Updates AnaCredit Reporting Requirements
Bundesbank published two circulars on AnaCredit reporting requirements. Circular 27/2021 covers changes to the reporting of branches, additional attributes to be reported for investment funds from August 01, 2021, and updates to the list of international organizations.
PRA Finalizes Supervisory Approach for Non-Systemic Banks in UK
PRA published the policy statement PS8/21, which contains the final supervisory statement SS3/21 on the PRA approach to supervision of the new and growing non-systemic banks in UK.
