MReport September 2018

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TH E M R EP O RT | 79 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST GOVERNMENT BCFP Issues Guidelines Under HMDA Rules Small banks and credit unions will receive partial exceptions. T he Bureau of Consumer Financial Protection (BCFP) has issued guidelines on partial exceptions for small banks and credit unions under the Home Mortgage Disclosure Act (HMDA) rules of the amended Dodd-Frank Act, also known as the Economic Growth, Regu - latory Relief, and Consumer Protection Act. According to the BCFP guid- ance, small banks and credit unions get a partial exemption from HMDA reporting proce- dures if the institution origi- nated fewer than 500 closed-end mortgage loans in each of the two preceding calendar years. These institutions are also eligible for a partial exemption if they origi - nated fewer than 500 open-end lines of credit in each of the two preceding calendar years. Citing the amendments in the act, the BCFP stated that for closed-end mortgage loans or open-end lines of credit subject to the partial exemptions, the "requirements of [HMDA sec - tion 304(b)(5) and (6)] shall not apply. Accordingly, for these transactions, those institutions are exempt from the collection, recording, and reporting require - ments for some, but not all, of the data points specified in current Regulation C." The guidance also stressed the fact that the amendments to the act would not affect the format of the Loan Application Registers (LARs) "for all institutions filing HMDA data collected in 2018." Additionally, BCFP stated that while LARs would be format - ted according to the previously related 2018 filings instructions guide for HMDA data collected in 2018 issued by the bureau, institutions that were partially exempted would enter an exemp - tion code for the field specified in a revised 2018 filing instructions guide the bureau would be releas- ing this year. In terms of compliance, the bureau said it did not intend to require data resubmission for HMDA data collected in 2018 and reported in 2019, unless "data er - rors are material." Collection and submission of the 2018 HMDA data will provide financial institu- tions an opportunity to identify any gaps in their implementa- tion of amended Regulation C and make improvements in their HMDA compliance management systems for future years," BCFP said in its guidance. "Any exami - nations of 2018 HMDA data will be diagnostic to help institutions identify compliance weaknesses, and the Bureau will credit good- faith compliance efforts." Recently the Federal Reserve, FDIC, and OCC also re - leased guidance for banks on the amended rules of the act, which included advisories on Bank Stress Tests, Resolution Plans, the Volcker Rule, High Volatility Commercial Real Estate Exposures, and examination cycles of banks. According to the BCFP guidance, small banks and credit unions get a partial exemption from HMDA reporting procedures if the institution originated fewer than 500 closed- end mortgage loans in each of the two preceding calendar years.

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