MReport October 2018

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60 | TH E M R EP O RT 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 Offers Clarifications to HMDA Exemption Rules The bureau addresses the uncertainty created by the Economic Growth, Regulatory Relief, and Consumer Protection Act, which was designed to provide regulatory relief for smaller institutions. T he Bureau of Consumer Financial Protection (BCFP) released an "interpretive and proce - dural rule" designed to implement and clarify the requirements of Section 104(a) of the Economic Growth, Regulatory Relief, and Consumer Protection Act, or amendment of the Home Mort - gage Disclosure Act (HMDA,) at the end of August. In addition, the BCFP released an updated Filing Instructions Guide for 2018 HMDA data collected. The President signed the Economic Growth, Regulatory Relief, and Consumer Protection Act on May 24. The Act contains provisions aimed at decreasing the burden on smaller depository institutions when facing compli - ance with HMDA and its imple- menting regulation. According to the BCFP, several institutions have questions about the HMDA exemptions in the act, specifically, how they impact collecting and filing for 2018. The new rule aims to clarify these concerns. According to the bureau, the rule gives insured depository insti - tutions and insured credit unions covered by a partial the option to exempt data fields as long as they report all data fields within any exempt data point for which they report data. Additionally, the rule notes that loans and lines of credit that are otherwise HMDA reportable are the only category of loans and lines of credit which count toward the partial exemp - tion threshold. For institutions that choose not to report a universal loan identifier, the rule designates a nonuniversal loan identifier for a partially exempt transaction for their exempt transactions, while clarifying the exception to the partial exemptions for negative Community Reinvestment Act examination history. The rule also clarifies which of the data points in Regulation C are covered by the partial exemptions. The BCFP plans to begin a notice-and-comment rulemaking at a later date. This will imple - ment these interpretations and procedures into Regulation C and further implement the act. Making CRA Work for Communities The OCC is asking for comments regarding the CRA and its implementation with an eye toward modernizing the act to better meet its intended goals. I n a bid to modernize the regulatory framework of implementing the Com- munity Reinvestment Act (CRA), The Office of the Comp- troller of Currency (OCC) asked for comments from stakeholders. The CRA, which was en- acted in 1977 to encourage banks and other insured depository institutions to help meet the credit needs of their communities, including low- and moderate- income (LMI) neighborhoods, is being considered for reforms. In 2017 and 2018, the Department of Treasury gathered feedback and published recommendations for modernizing the regulatory framework of this act. The OCC said in a statement that it had issued the Advance Notice of Proposed Rulemaking (ANPR) to better achieve the statute's original purpose, increase lending and investment where it was needed most, and reduce the burden associated with reporting and assessing CRA performance. "As a long-time banker, I have seen first-hand the benefit of CRA investment and how it makes communities vibrant," said Comptroller of the Currency Joseph M. Otting. "I have also seen how limitations in the cur - rent CRA regulation can fail to provide consideration to a bank that wants to lend and invest in a community with a need for capital, including many low- and moderate-income areas." Noting that the operation of the current CRA regulation could re - sult in restricted resources, Otting said it was time for a national discussion on how "we can make the CRA work better." Through the ANPR, the OCC is asking stakeholders to comment on a number of questions regard - ing the improvements to the CRA regulation on various aspects such as increasing lending and services to people in areas that need it most, including LMI areas; clarify - ing and expanding the types of activities eligible for CRA consid- eration; revisiting how assessment areas are defined and used; mak- ing bank CRA performance more transparent; and reducing the cost and burden related to evaluating performance under the CRA. According to Otting, some of the areas stakeholders complained about included the difficulty of getting capital to critical areas, significant administrative burden, lack of CRA consideration for important development activities, and failure to adapt to advances in banking such as interstate branch - ing and digitization of services. "As a long-time banker, I have seen first-hand the benefit of CRA investment and how it makes communities vibrant." —Joseph M. Otting, Comptroller of the Currency

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