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On May 2, 2019, the Consumer Financial Protection Bureau (“CFPB”) released a notice of proposed rulemaking (the “NPRM”) proposing to raise coverage thresholds for collecting and reporting data under the Home Mortgage Disclosure Act (“HMDA”).  In addition, the Bureau released an advanced notice of proposed rulemaking (the “ANPR”) requesting comment on the costs and benefits…

On December 21, 2018, the Consumer Financial Protection Bureau (the “Bureau”) announced its issuance of final policy guidance describing its intentions for modification and disclosure to the public of certain loan-level data that financial institutions report under the Home Mortgage Disclosure Act (“HMDA”) and Regulation C.  The guidance applies to HMDA data compiled by financial institutions in or after 2018 and made available to the public beginning in 2019.  The final policy guidance identifies the HMDA data and text fields the Bureau intends to exclude from public disclosure and the HMDA data fields the Bureau intends to disclose in a modified, less precise manner to protect the privacy of mortgage applicants and borrowers.

The final policy guidance indicates that, in May 2019, the Bureau intends to commence a separate notice-and-comment legislative rulemaking under the Administrative Procedure Act to incorporate the modifications and disclosure of HMDA data into the text of Regulation C.…

Continue Reading CFPB Announces Final Policy Guidance on Modification and Disclosure of HMDA Data

On September 20, 2017, the Consumer Financial Protection Agency (“CFPB”) announced final amendments to Regulation B, which implements the Equal Credit Opportunity Act (“ECOA”), to provide flexibility and clarity to mortgage lenders regarding the collection and retention of information about the ethnicity, sex, and race of certain mortgage applicants.  The CFPB also issued proposed policy guidance, with a request for public comment, regarding the loan-level Home Mortgage Disclosure Act (“HMDA”) data reported by financial institutions that the CFPB plans to disclose to the public beginning in 2019.

Regulation B Amendments

ECOA prohibits a creditor from discriminating against an applicant with respect to any aspect of a credit transaction on a prohibited basis, which includes, among other things, race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract).  To implement ECOA’s antidiscrimination principles, Regulation B generally prohibits a creditor from inquiring about the race, color, religion, national origin, or sex of an applicant or any other person (“applicant demographic information”) in connection with a credit transaction.

The amendments announced by the CFPB are designed to align Regulation B’s rules regarding the collection and reporting of applicant demographic information by mortgage lenders with the CFPB’s 2015 revisions to Regulation C, which implements HMDA and governs the collection, reporting, and disclosure of mortgage lending information, including HMDA’s separate requirement to collect and report applicant demographic information.  The revisions to Regulation C go into effect on January 1, 2018.

The amendments make three substantive changes to Regulation B:

  • Permitting additional flexibility in the collection of demographic information: Regulation B provides exceptions to the prohibition of creditor inquiries into applicant demographic information.  One such exception is that creditors that receive an application for certain dwelling-secured loans are required to collect and retain protected information, including race and ethnicity information.  This information is collected in terms of specified racial and ethnic categories that are broad and aggregated (e.g., Asian, Hispanic).   However, this aggregated racial and ethnic categorization is somewhat inconsistent with the revisions to Regulation C, pursuant to which creditors must permit applicants to self-identify their race and ethnicity using certain disaggregated racial and ethnic subcategories (e.g., Mexican, Puerto Rican, or Cuban under the aggregate category of Hispanic).  To remedy this inconsistency, the Regulation B amendments allow creditors to collect the applicant’s information using either the aggregate ethnicity and race categories or the disaggregated ethnicity and race categories and subcategories required by revised Regulation C.  In addition, to standardize the treatment of co-applicants under Regulation B and Regulation C, the amendments clarify that a creditor is permitted, but not required, to collect applicant demographic information from a second or additional co-applicant.

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Continue Reading The CFPB Finalizes Amendments to ECOA Regulations and Seeks Public Comment on HMDA Policy Guidance

On August 24, 2017, the Consumer Financial Protection Bureau (“CFPB”) issued a final rule amending Regulation C, the implementing regulation for the Home Mortgage Disclosure Act (“HMDA”). In October 2015, the CFPB promulgated substantial revisions to Regulation C (the “HMDA Rule”) to implement statutory amendments to HMDA in section 1094 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The 2015 amendments modified the types of institutions and transactions subject to Regulation C, the types of data institutions are required to collect and report, and the processes for reporting and disclosing the required data. Most of the new or revised regulatory provisions are scheduled to take effect in January 2018.

One such provision would have required certain lenders, including community banks and credit unions, to report home equity lines of credit (“HELOCs”) if the lender originated at least 100 HELOCs in each of the two preceding calendar years. The CFPB’s recent change to the HMDA Rule temporarily increases the threshold for this reporting requirement to 500 HELOCs in each of the two preceding calendar years (through 2018 and 2019).

When it proposed this temporary increase in the HELOC reporting threshold, the CFPB explained that it was responding to “increasing concerns from community banks and credit unions” regarding “the challenges and costs of reporting open-end lending.” The CFPB also noted that its “analysis of more recent data suggests changes in open-end origination trends that may result in more institutions reporting open-end lines of credit than was initially estimated.” The CFPB has indicated that the temporary amendment to the reporting threshold will give the CFPB time to consider whether a permanent change is warranted.
Continue Reading CFPB Issues Temporary Amendment to HMDA Rule Reporting Threshold

On July 14, 2017, the Consumer Financial Protection Bureau (“CFPB”) issued a proposal to ease, at least temporarily, the reporting requirements for community banks and credit unions under the Home Mortgage Disclosure Act (“HMDA”). The proposed rule would raise the threshold at which financial institutions have to report on home equity lines of credit for…

On April 13, 2017, the Consumer Financial Protection Bureau (“CFPB”) issued a Notice of Proposed Rule Making (the “NPRM” or “proposal”) to amend the Regulation C final rule issued by the CFPB in October 2015 (“Final Rule”).  Regulation C implements the Home Mortgage Disclosure Act (“HMDA”), 12 U.S.C. § 2801 et seq.  The Final Rule modified the types of institutions and transactions subject to Regulation C, the types of data that institutions are required to collect, and the processes for reporting and disclosing the required data.  The Final Rule included, but was not limited to, amendments required by the Dodd Frank Wall Street Reform and Consumer Protection Act.  Most of the requirements of the Final Rule become effective in January 2018.
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Continue Reading CFPB Proposes Revisions to Final Rules under Home Mortgage Disclosure Act (Regulation C)