The noble objectives of the Home Mortgage Disclosure Act (HMDA) and its mortgage reporting requirements should be balanced by an appropriately tailored regulation, CUNA wrote to the Consumer Financial Protection Bureau (CFPB) Tuesday. The CFPB proposed increasing the HMDA reporting thresholds for closed-end mortgages to 50 or 100 loans (up from the current 25) and extending the current temporary thresholds of 500 open-end lines of credit until Jan. 1, 2022.

While CUNA believes the proposal is “step in the right direction,” CUNA recommends the CFPB go further in its regulatory relief.

Based on CUNA’s analysis, the CFPB’s current proposal would provide HMDA relief to over 750 credit unions. The CUNA-recommended threshold of 500 closed-end mortgage loans would reduce the regulatory costs associated with HMDA compliance for over 1,500 credit unions.

CUNA’s letter urges the CFPB to consider several additional amendments to HMDA’s transactional coverage thresholds:

• Increase the closed-end mortgage loan threshold to 500 loans in each of the prior two years. Barring the adoption of a 500 closed-end mortgage loan threshold, the CFPB should finalize the proposed 100 loan threshold at a minimum to exempt credit unions with small mortgage lending portfolios from HMDA reporting; and
• Allow reporting of open-end lines of credit to once again be voluntary. Open-end line of credit reporting was voluntary prior to the 2015 HMDA Rule as these loans are often treated separate and distinct from dwelling-secured mortgages. Barring the return to voluntary reporting, the CFPB should make permanent the current 500-line threshold rather than reducing the threshold after a short extension, as proposed.

 “With respect to open-end lines of credit, if the Bureau decreased the reporting threshold from 500 to 200 lines after the year 2022, as stated in the proposal, then nearly 200 credit unions could lose their current reporting exemption and be required to report data on their open-end lines of credit,” the letter reads. “CUNA has serious concerns with the costs that could be incurred by affected credit unions and, instead, requests the Bureau to make HMDA reporting voluntary for these products – as it was prior to the 2015 HMDA Rule.”

CUNA also recommends the CFPB “provide a meaningful grace period while transitioning between reporting thresholds so impacted credit unions have an opportunity to adjust processes and systems without any risk of negative examination findings.”