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CFPB extends temporary HMDA relief for small institutions

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In an expected win for small community banks and credit unions, the Consumer Financial Protection Bureau is giving financial institutions that originate few mortgages an additional reprieve from the Home Mortgage Disclosure Act.

Institutions that offer fewer than 500 open-end lines of credit will get another two-year exemption from HMDA reporting requirements, extending their current temporary relief.

The CFPB issued a final rule on Thursday that extends the relief until Jan. 1, 2022. The move is part of the Trump administration’s efforts to provide regulatory relief to small lenders by significantly raising the loan threshold for collecting and reporting HMDA data.

The new rule maintains the current status quo as the CFPB solicits comments on more substantive changes to the HMDA regime. The agency under the Trump administration has proposed reopening the Obama-era HMDA rule that had been written in 2015.

The bureau said it plans to issue a separate rule to address permanent changes to the thresholds for both open-end lines of credit and closed-end mortgage loans.

HMDA data has been collected since 1975 and regulators use the data to enforce fair lending and anti-discrimination laws.

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