Compliance Q&A


Are My Mortgage Lending Activities Required to Comply with HMDA Reporting Requirements for 2018 ?

For NonDepository Financial Institutions, under Regulation C, a for-profit mortgage-lending institution other than a bank, savings association, or credit union is a nondepository financial institution and subject to Regulation C if it meets BOTH of the following:

1. Location Test. The institution had a home or branch office in a metropolitan statistical area (MSA) on the preceding December 31. 12 CFR 1003.2(g)(2)(i). The phrase “preceding December 31†refers to the December 31 immediately preceding the current calendar year. For example, in 2018, the preceding December 31 is December 31, 2017. Comment 2(g)-1
For purposes of this location test, a branch office of a nondepository financial institution is any one of the institution’s offices at which the institution takes from the public applications for covered loans. A nondepository financial institution is also deemed to have a branch office in an MSA if, in the preceding calendar year, it received applications for, originated, or purchased five or more covered loans related to property located in that MSA, even if it does not have an office in that MSA. 12 CFR 1003.2(c)(2).

2. Loan-Volume Threshold. The institution meets or exceeds either the closed-end mortgage loan-volume threshold or the open-end line of credit loan-volume threshold in each of the two preceding calendar years. Effective January 1, 2018 through December 31, 2019, an institution that originated at least 25 closed-end mortgage loans in each of the two preceding calendar years, or originated at least 500 open-end lines of credit in each of the two preceding calendar years meets or exceeds the loan volume threshold.

When an institution determines whether it meets the loan-volume thresholds, it does not count transactions excluded by 12 CFR 1003.3(c)(1) through (10) and (13). 12 CFR 1003.2(g)(2)(ii). Closed-end mortgage loans, open-end lines of credit, and these excluded transactions are discussed further in the 2018 HMDA Getting It Right Guide.

When determining if it meets the loan-volume thresholds, an institution only counts closed-end mortgage loans and open-end lines of credit that it originated. Only one institution is deemed to have originated a specific closed-end mortgage loan or open end line of credit under Regulation C, even if two or more institutions are involved in the origination process. Only the institution that is deemed to have originated the transaction under Regulation C counts it for purposes of the loan volume threshold. Comment 2(g)-5; see also Comments 4(a)-2 through -4. These requirements are  discussed further in the 2018 HMDA Getting It Right Guide.

Regulation C also includes a separate test to ensure that financial institutions that meet only the 25 closed-end mortgage loan threshold are not required to report their open-end lines of credit, and that financial institutions that meet only the 500 open-end line of credit threshold are not required to report their closed-end mortgage loans. 12 CFR 1003.3(c)(11) and (12).7 For more information, see the HMDA Small Entity Compliance Guide, Section 4.1.2 available in Appendix B of this Guide.

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