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
Scott Dietz
Scott is a Director in the Regulatory and Accounting Solutions team responsible for providing accounting expertise across solutions, products, and services offered by Moody’s Analytics in the US. He has over 15 years of experience leading auditing, consulting and accounting policy initiatives for financial institutions.
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
Previous Article
Central Bank of Ireland Amends Lending Rules for Credit UnionsRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
