The Home Mortgage Disclosure Act (“HMDA”), implemented through Regulation C, is the next target for changes by the Consumer Financial Protection Bureau (“CFPB”). The CFPB’s proposed rule claims to simplify the reporting process for financial institutions while also updating the reporting requirements. HMDA, originally enacted in 1975, requires many financial institutions to report information about the home loans for which they receive applications or that they originate or purchase. The aggregate data is accessible to regulators and the public (since February) to identify information and trends in home lending.
The proposed changes to Reg C are in keeping with the CFPB’s implementation of Dodd-Frank by requiring lenders to report certain new categories of data about home loans, including the applicant’s debt-to-income ratio, the interest rate of the loan, and the total discount points charged for the loan. The proposed Reg C changes would also require that covered lenders report, with some exceptions, all loans related to dwellings, including reverse mortgages and open-end lines of credit.
Additionally, the CFPB asserts that proposed changes to Reg C will improve the reporting process for lenders. Of some note, the only threshold number in the rule is that institutions must report HMDA data if they originate more than 25 mortgages per year.
The text of the rule can be accessed here, and comments on the proposed rule are due October 22.
Please contact Spilman with questions or if your institution has an interest in commenting on the rule.