CFPB Issues Final Ruling to Raise Permanent HMDA Coverage Thresholds

The CFPB issued a final rule on April 16 that raised the permanent HMDA coverage thresholds for collecting and reporting data.

2015 HMDA Rule – Permanent Thresholds

HMDA requires some lenders to collect, report, and disclose information about their mortgage lending activity. In 2015, the CFPB set HMDA coverage thresholds for closed-end loans and open-end lines of credit. If a lender exceeds one of those thresholds, that lender must collect, record, and report HMDA data on applicable mortgage lending activity. The 2015 HMDA Rule set the:

• closed-end threshold at 25 closed-end mortgage loans in each of the two preceding calendar years, and
• open-end threshold at 100 open-end lines of credit in each of the two preceding calendar years.

2017 and 2019 – Temporary Thresholds

In 2017, the CFPB temporarily increased the open-end threshold to 500 open-end lines of credit for two years (calendar years 2018 and 2019).  

In October 2019, the CFPB extended the temporary threshold to 500 open-end lines of credit to January 1, 2022.

2020 and 2022 – New Permanent Thresholds

Summary on the CFPB’s final rule

The CFPB issued a final rule on April 16 that raised the permanent HMDA coverage thresholds for collecting and reporting data. The new rule sets the:

• closed-end threshold at 100 closed-end mortgage loans in each of the two preceding calendar years, starting July 1, 2020, and
• open-end threshold at 200 open-end lines of credit in each of the two preceding calendar years, starting January 1, 2022. 

The new permanent thresholds apply to bothdepository institutions (including banks and credit unions) and non-depository institution lenders.

Closed-End Loan Threshold

Lenders that originated fewer than 100 closed-end mortgage loans in either of 2018 or 2019 will not be required to collect HMDA data on closed-end mortgage loans after July 1, 2020. Similarly, Lenders that originated fewer than 100 closed-end mortgage loans in either of 2019 or 2020 will not be required to collect HMDA data on closed-end loans in 2021.

Newly Excluded Lenders

The CFPB now recognizes a category of “Newly Excluded Lender” that was subject to HMDA’s closed-end reporting requirements as of January 1, 2020 because it originated at least 25 closed-end mortgage loans in 2018 and 2019, but is no longer covered by HMDA’s closed-end requirements as of July 1, 2020 because it originated fewer than 100 closed-end mortgage loans during 2018 or 2019.

A Newly Excluded Lender:

• Must still record closed-end HMDA data for thefirst quarter of 2020 within 30 days after the end of the first quarter of 2020.

• May stop collecting closed-end data HMDA data starting on July 1, 2020.  However, the Equal Credit Opportunity Act and Regulation B separately requires a lender to collect information about a loan applicant’s ethnicity, race, sex, marital status, and age where the loan is primarily for the purchase or refinancing of a dwelling that is or will be the applicant’s principal residence and will secure the loan.

• Does not need to report in 2021 any HMDA data collected in 2020 on closed-end mortgage loans (including data collected in 2020 before July 1, 2020). However, a Newly Excluded Lender may report voluntarily HMDA data on closed-end mortgage loans in 2021 as long as the lender reports data for the full calendar year 2020.

Open-End Line of Credit Threshold

As mentioned above, the new 2020 rule increases the permanent HMDA data threshold for open-end lines of credit from 100 to 200. However, this change will not take effect until January 1, 2022, when the current temporary threshold of 500 open-end lines of credit expires. 

Beginning in 2022, lenders that originated at least 200 open-end lines of credit in each of 2020 and 2021 must collect and record data on their open-end lines of credit and report that data by March 1 of 2023.