By: Brad Washburn, CRCM, CAMS
In response to increasing concerns from community banks and credit unions over challenges and costs presented, on July 14, 2017 the Consumer Financial Protection Bureau (CFPB) issued a proposal that would impact HMDA reporting requirements for home-equity lines of credit (HELOCs) and other open-end lines of credit secured by a lien on a dwelling. Under rules that are scheduled to take effect in January 2018, a financial institution is generally required under the Regulation C (HMDA) to report HELOCs and other open-end lines of credit secured by a lien on a dwelling if they made 100 of such loans in each of the last two years. This is a significant change from the current rule where reporting of HELOCs and other open-end lines of credit secured by a lien on a dwelling is optional.
The new proposal would increase that threshold to 500 loans per year through calendar years 2018 and 2019 to give the CFPB more time to consider whether to make a permanent adjustment to the institutional coverage and transactional reporting threshold for HELOCs and similar loans. The proposal also includes transitional rules and optional reporting for institutions that exceed the threshold in either of the last two years.
The proposed rule is available here.
The public comment period is open until July 31, 2017. The CFPB has indicated it will issue a separate proposal with a longer notice and comment process to consider adjustments to the permanent threshold at a later date.
In response to increasing concerns from community banks and credit unions over challenges and costs presented, on July 14, 2017 the Consumer Financial Protection Bureau (CFPB) issued a proposal that would impact HMDA reporting requirements for home-equity lines of credit (HELOCs) and other open-end lines of credit secured by a lien on a dwelling. Under rules that are scheduled to take effect in January 2018, a financial institution is generally required under the Regulation C (HMDA) to report HELOCs and other open-end lines of credit secured by a lien on a dwelling if they made 100 of such loans in each of the last two years. This is a significant change from the current rule where reporting of HELOCs and other open-end lines of credit secured by a lien on a dwelling is optional.
The new proposal would increase that threshold to 500 loans per year through calendar years 2018 and 2019 to give the CFPB more time to consider whether to make a permanent adjustment to the institutional coverage and transactional reporting threshold for HELOCs and similar loans. The proposal also includes transitional rules and optional reporting for institutions that exceed the threshold in either of the last two years.
The proposed rule is available here.
The public comment period is open until July 31, 2017. The CFPB has indicated it will issue a separate proposal with a longer notice and comment process to consider adjustments to the permanent threshold at a later date.
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