HMDA Small Reporter Overview
HMDA Small Reporter Overview
With the new year comes HMDA reporting. Let’s take a look at the partial relief that EGRRCPA provided to some financial institutions.
On May 24, 2018, the President signed the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), which contained provisions to decrease the burden smaller depository institutions face in complying with HMDA.
On August 31, 2018, the CFPB issued an interpretive and procedural rule to implement and clarify the requirements.
Some of the highlights:
- The partial exemptions apply only to depository financial institutions that originated fewer than 500 closed-end loans or 500 open-end lines of credit in each of the prior two calendar years.
- The partial exemptions do not remove fields from the LAR of affected institutions. The exemptions add new codes that indicate the financial institution is exempt. The codes are either the word Exempt or the code 1111.
- Voluntary reporting is allowed for institutions that wish to continue with full reporting of the HMDA LAR.
- The exemption can be utilized for some fields, while reporting full data for other fields that are also covered by the exemption.
- Some fields are part of multi-field “data points” and the entire data point must be reported if the institution chooses to voluntarily report one of the fields.
The data points covered by partial exemptions are: the universal loan identifier (ULI), property address, rate spread, credit score, reasons for denial*, total loan costs or total points and fees, origination charges, discount points, lender credits, interest rate, prepayment penalty term, debt-to-income ratio, combined loan-to-value ratio, loan term, introductory rate period, non-amortizing features, property value, manufactured home secured property type, manufactured home land property interest, multifamily affordable units, application channel, mortgage loan originator identified, automated underwriting system, reverse mortgage flag, open-end line of credit flag, and business or commercial purpose flag.
*NOTE: Under the partial exemption rules, only FDIC and OCC banks are required to report reasons. FRB Banks can choose not to report reasons and use code 1111.
Refer to the Regulatory and Reporting Overview Reference Chart to determine which exempt code to use: “Exempt” or “1111”. For example, you would enter “Exempt” in the street address, city, and zip code if you are not reporting the property address. You would enter “1111” for credit score and the name and version of the credit scoring model if you are not reporting the credit score. Also, a non-universal loan identified can be used by small reporters if they choose not to use the ULI.
Links below include the interpretive procedural rule, the regulatory and reporting overview reference chart and the filing instructions guide (FIG).
https://s3.amazonaws.com/cfpb-hmda-public/prod/help/2018-hmda-fig-2018-hmda-rule.pdf
Should you need assistance navigating the HMDA changes, please reach out to an FOS team member. For additional information contact the author Shanin L. Bachstein at sbachstein@fosaudit.com.
HMDA Small Reporter Overview | Shanin L. Bachstein