HMDA Reporting – Getting It Right

A Guide to HMDA Reporting: Getting It Right! will assist you in complying with the Home Mortgage Disclosure Act (HMDA) as implemented by the Consumer Financial Protection Bureau’s Regulation C, 12 CFR Part 1003 (Regulation C). The purpose of this Guide is to provide an easy-to-use summary of certain key requirements. This Guide does not provide detailed information about the HMDA submission process, or file, data, and edit specifications. Information about those topics may be found on the FFIEC’s Resources for HMDA Filers website, available at www.consumerfinance.gov/data-research/hmda/for-filers and www.ffiec.gov/hmda/. The Foreword and Summary of Requirements sections of the Guide were developed by the Federal Financial Institutions Examination Council (FFIEC) — the Board of Governors of the Federal Reserve System (Board), the CFPB the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the State Liaison Committee (SLC) — and the U.S. Department of Housing and Urban Development (HUD). The appendices include, in addition to Regulation C and its Official Interpretations, certain HMDA compliance materials developed and issued exclusively by the CFPB and not by the FFIEC or its other member agencies. Financial institutions may wish to consult and rely upon additional compliance resources that their Federal supervisory agencies may offer. Contact information for each agency is available in Appendix H. This edition of the Guide incorporates the amendments made to HMDA in the DoddFrank Act. 1 The Dodd-Frank Act amended HMDA, transferring rulewriting authority to the Bureau and expanding the scope of information that must be collected, reported, and disclosed under HMDA, among other changes. In October 2015, the Bureau issued the 2015 HMDA Final Rule implementing the Dodd-Frank Act amendments to

Regulation C. 2 On August 24, 2017, the Bureau issued a final rule further amending Regulation C to make technical corrections and to clarify and amend certain requirements adopted by the 2015 HMDA Final Rule.3 The 2015 HMDA 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.4 The Summary of Requirements reviews HMDA’s purposes and data collection, reporting, and disclosure requirements. It provides a high level summary of:  The institutions covered by Regulation C.  The transactions covered by Regulation C.  The information that covered institutions are required to collect, record, and report.  The requirements for reporting and disclosing data. This Guide is not a substitute for HMDA or Regulation C. Regulation C and its official interpretations (also known as the commentary) are the definitive sources of information regarding their requirements. Regulation C is available in Appendix F and G of this Guide and at www.consumerfinance.gov/regulatory-implementation/hmda/.

Additionally, this Guide is not a substitute for the requirements for filing the reportable data. The Filing Instructions Guide is the definitive source for information regarding the filing requirements and is available at www.consumerfinance.gov/dataresearch/hmda/for-filers.

Feedback The FFIEC welcomes suggestions for changes or additions that might make this Guide more helpful.

Write to: FFIEC, 3501 Fairfax Drive Room B-7081a Arlington, VA 22226

Send an e-mail to: GettingItRightGuide@cfpb.gov

If, after reviewing the resources in this Guide, you have a question regarding a specific provision of the regulation, or have questions about how to file HMDA data, please email HMDAHELP@cfpb.gov with your specific question, identifying the filing year you are referencing, and, when applicable, the section(s) of the regulation related to your question. You can also submit the inquiry online using the form available at hmdahelp.consumerfinance.gov. The information you provide will permit the Consumer Financial Protection Bureau to process your request or inquiry. You may also contact your appropriate Federal HMDA reporting agency (see Appendix H to this Guide.)

Generally, this Guide will point you to the relevant resources that discuss:

The institutions covered by Regulation C.

The transactions covered by Regulation C.

The information that covered institutions are required to collect, record, and report.

The requirements for reporting and disclosing data. The material can be found after the introduction in the referenced appendix section.

Institutional Coverage: Who Must Report? INSTITUTIONAL COVERAGE GENERALLY An institution is required to comply with Regulation C only if it is a “financial institution” as that term is defined in Regulation C. The definition of financial institution includes both depository financial institutions and nondepository financial institutions, as those terms are separately defined in Regulation C. 12 CFR 1003.2(g). An institution uses these two definitions, which are outlined below, as coverage tests to determine whether it is a financial institution that is required to comply with Regulation C. For the purposes of this Guide, the term “financial institution” refers to an institution that is either a depository financial institution or a nondepository financial institution that is subject to Regulation C.

INSTITUTIONAL COVERAGE TESTS DEPOSITORY FINANCIAL INSTITUTIONS A bank, savings association, or credit union is a depository financial institution and subject to Regulation C if it meets ALL of the following: 1. Asset-Size Threshold. On the preceding December 31, the bank, savings association, or credit union had assets in excess of the asset-size threshold published annually in the Federal Register, included in the official interpretations, 12 CFR Part 1003, Comment 2(g)-2, and posted on the Bureau’s website. 12 CFR 1003.2(g)(1)(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. 2. Location Test. On the preceding December 31, the bank, savings association, or credit union had a home or branch office located in a metropolitan statistical area (MSA). 12 CFR 1003.2(g)(1)(ii). For purposes of this location test, a branch office for a bank, savings association, or credit union is an office: (a) of the bank, savings association, or credit union (b) that is considered a branch by the institution’s Federal or State supervisory agency. For purposes of Regulation C, an automated teller machine or other free-standing electronic terminal is not a branch office regardless of whether the supervisory agency would consider it a branch. 12 CFR 1003.2(c)(1). A branch office of a credit union is any office where member accounts are established or loans are made, whether or not an agency has approved the office as a branch. Comment 2(c)(1)-1. 3. Loan Activity Test. During the preceding calendar year, the bank, savings association, or credit union originated at least one home purchase loan or refinancing of a home purchase loan secured by a first lien on a one-to four-unit dwelling. 12 CFR 1003.2(g)(1)(iii). For more information on whether a loan is secured by a dwelling, is a home purchase loan, or is a refinancing, see 12 CFR 1003.2(f), (j), and (p) and associated commentary; and Sections 4.1.1.2 and 5.7 of the HMDA Small Entity Compliance Guide available in Appendix B of this Guide. 4. Federally Related Test. The bank, savings association, or credit union: a. Is federally insured; or b. Is federally regulated; or c. Originated at least one home purchase loan or refinancing of a home purchase loan that was secured by a first lien on a one- to-four-unit dwelling and also (i) was insured, guaranteed or supplemented by a Federal agency or (ii) was intended for sale to the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac). 12 CFR 1003.2(g)(1)(iv). 5. Loan-Volume Threshold. The bank, savings association, or credit union meets or exceeds either the closed-end mortgage loan or the open-end line of credit loanvolume threshold in each of the two preceding calendar years. Effective January 1, 2018 and through December 31, 2019, a bank, savings association, or credit union 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 the bank, savings association, or credit union determines whether it meets these 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)(1)(v). Closed-end mortgage loans, open-end lines of credit, and these excluded transactions are discussed below in TRANSACTIONAL COVERAGE: WHAT IS REPORTED?.

When determining if it meets the loan-volume thresholds, a bank, savings association, or credit union 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 closedend 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 below in TRANSACTIONS INVOLVING MULTIPLE ENTITIES. Regulation C also includes a separate test to ensure that financial institutions that meet only the closed-end mortgage loan threshold are not required to report their open-end lines of credit, and that financial institutions that meet only the open-end line of credit threshold are not required to report their closed-end mortgage loans. 12 CFR 1003.3(c)(11) and (12).6 For more information, see HMDA Small Entity Compliance Guide, Section 4.1.2 available in Appendix B of this Guide.

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). Covered loans and applications for covered loans are discussed below in TRANSACTIONAL COVERAGE: WHAT IS REPORTED?. 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 loanvolume 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 below in TRANSACTIONAL COVERAGE: WHAT IS REPORTED?. 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 openend 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 below in TRANSACTIONS INVOLVING MULTIPLE ENTITIES. 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.

Source: https://www.ffiec.gov/hmda/pdf/2018guide.pdf

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