Does Your Bank or Credit Union Qualify for Reduced HMDA Regulations?

HMDA has plagued banks and credit unions for years, and unfortunately, it just got 10 times harder. In January of this year, the CFPB expanded HMDA regulations in a huge way. To meet the requirements in the past, you could fit all the lines and columns of a loan onto a single sheet of paper. Now? I am not sure you could fit it onto four legal-sized sheets. If you were to put all the fields into an Excel spreadsheet and start on column A, I believe you get all the way to column DE  on a single loan before you get every field covered.

There is a lot of change and many new rules to remember, which obviously has significant consequences if you do not comply or get something wrong. If you have been stressing about this (or maybe you would go so far as to say “freaking out”) know that you are not alone.

The good news is, there was a law passed in May of this year which allows a significant group to comply with HMDA without needing to include all those expanded requirements.

If you do more than 25 originated loans but fewer than 500 originated HMDA reportable loan entries in a year, you do not need to do the expanded HMDA entries I just mentioned.

What does that mean?

The new 2018 partial exemptions affect the collection, recording and reporting of 2018 HMDA Data to approximately 3,300 institutions nationwide. Any HMDA reportable financial institution can use the exemption back to 1/1/2018 if they choose. Also, if you originate 100 open-end lines (HELOCs) but fewer than 500 lines two years in a row, then a financial institution would qualify for the HMDA partial exemption.

What will it look like?

Over half of the almost 5,852 financial institutions that reported HMDA data for 2017 will be eligible for the new partial exemption. However, there will still be new fields that are not exempt from reporting (such as age, number of units, construction method, universal and non-universal loan identifier, legal entity identifier, state abbreviation in property address and disaggregated demographic data).

If you are in this category (originate 25 or more loans but fewer than 500 loans for 2 years in a row) the good news is, regulatory relief is here. It may not be the best solution to HMDA, however it’s better than reporting over 100 data points.

Our team is constantly checking in and getting information as it comes out, and we will be informing our clients who qualify as soon as we have more information.

Want to be on the notification list? Send me an email and I will be happy to keep you informed.

James Tucker
James is a well-respected compliance expert who has been working in the financial industry for 25 years. His focus is on accelerating compliance programs with particular emphasis on loan compliance and TILA-RESPA Integrated Disclosure (TRID) requirements as well as other loan laws and regulations. A previous Assistant Vice President for a regional bank, he also served as a branch manager involved in consumer and business development, loan growth, bank investments and ensuring compliance with all banking laws and regulations. Loan compliance has always been an area of interest for James, and he enjoys helping clients understand and abide by the laws and regulations.

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