The supervisory approach for the new, lower reporting threshold of 25 closed-end mortgage loans was outlined Friday by two regulators – one for banks, one for credit unions – who both indicated limited action, if any, on recent past reporting under a higher threshold.
In separate letters, the Federal Deposit Insurance Corp. (FDIC) and the National Credit Union Administration (NCUA) outlined for their respective supervised institutions their approaches for enforcing requirements of the new, lower threshold under the Home Mortgage Disclosure Act (HMDA). The Office of the Comptroller of the Currency (OCC) issued guidance for national banks and federal savings associations on the HMDA threshold earlier in the week (Feb. 1).
The new threshold for reporting the mortgage data is due to a recent court decision. Formerly, the threshold was 100 closed-end mortgage loans, as set by the 2020 HMDA final rule. The decision vacated the 2020 rule and reverted the threshold to that established by the 2015 HMDA Final Rule. That rule required banks originating at least 25 closed-end mortgage loans in each of the two preceding calendar years to be subject to HMDA data collection and reporting requirements.
The FDIC advised its insured institutions that, for closed-end mortgage data collected in the years 2022, 2021, or 2020, it does not intend to initiate enforcement actions or cite HMDA violations for certain failures to report such loan data.
The NCUA told credit unions that it recognizes that credit unions that “are affected by this change may need time to implement or adjust policies, procedures, systems, and operations to achieve compliance with these reporting requirements. Accordingly, the NCUA intends to take a flexible supervisory and enforcement approach similar to the approach being taken by the CFPB,” as announced late last year.
That approach, the CFPB said in December, will not be to carry out enforcement actions related specifically for data collected in 2022, 2021, or 2020.
“The CFPB recognizes that financial institutions affected by this change may need time to implement or adjust policies, procedures, systems, and operations to come into compliance with their reporting obligations,” the bureau said in a December blog post. “In these limited circumstances, in allocating the CFPB’s enforcement and supervisory resources, the CFPB does not view action regarding these institutions’ HMDA data as a priority.”
Regulatory Alert (23-RA-01): Change to HMDA’s Closed-End Loan Reporting Threshold