It’s time for a trip into the Way-Back Machine, all the way back to April 16, 2020, when the Consumer Financial Protection Bureau (CFPB) issued a final rule amending Regulation C. This amendment permanently raised the closed-end coverage threshold from 25 to 100 closed-end mortgage loans in each of the two preceding calendar years. The effective date of this amendment was July 1, 2020.
But let’s remember there was also a change to open-end lines of credit. The final rule amended the threshold from 500 open-end lines of credit to 200 open-end lines of credit in each of the two preceding years effective January 1, 2022.
Under Regulation C, open-end credit is defined as “an extension of credit that is secured by a dwelling; and is an open-end credit plan as defined under §1026.2(a)(20), but without regard to whether the credit is a consumer credit…”
That being said, I have a question for you; Do you know how many open-end lines of credit secured by a dwelling your institution has originated during 2020 and 2021? If you don’t know, I recommend you do some investigating now to find out where you stand for the past two years and remember to include open-end credit requests secured by a dwelling from your commercial loan department in your count.
If your investigation reveals you’ve originated at least 200 dwelling-secured open end lines of credit in 2020 and 2021, the lowering of this threshold will tip you into the requirement to report open-end lines of credit on your LAR for 2022.
So, what do you need to report? The chart attached provides you the information you need to get your open-end reporting right.
If you are not sure if you have to report or if you need input on enhancing your HMDA Procedures to include open-end credit, TCA is here to help you find A Better Way, to manage your HMDA Risk.
HMDA Field Requirements for Open-End Lines of Credit
| HMDA Field | Value Choices | Key Field | Comments/Instructions |
| ULI/NULI NULI | ULI or NULI | Y | |
| Application Date | Use Standard Reporting Rules | Y | |
| Loan Type | Use Standard Reporting Rules | Y | |
| Loan Purpose | Use Standard Reporting Rules | Y | 32 – Cash-Out Refinancing not applicable unless Institution has an open-end product that meets this definition. 4 – Other Purpose not applicable on commercial/business purpose LOC. |
| Preapproval | 2 | N | |
| Construction Method | Use Standard Reporting Rules | N | |
| Occupancy Type | Use Standard Reporting Rules | Y | |
| Loan Amount | Amount of credit available to borrower under the terms of the Plan. | Y | The total amount available for draw noted on the Credit Agreement. |
| Action Taken | Use Standard Reporting Rules | Y | |
| Action Taken Date | Use Standard Reporting Rules | Y | |
| Street Address | Use Standard Reporting Rules | N | Institution may qualify for field reporting exemption. |
| City | Use Standard Reporting Rules | N | Institution may qualify for field reporting exemption. |
| State | Use Standard Reporting Rules | N | |
| Zip | Use Standard Reporting Rules | N | Institution may qualify for field reporting exemption. |
| Five-Digit County Code | Use Standard Reporting Rules | N | Code is determined by combining the numeric State and County Code. Example: State = 17; County = 031; Reported County Code = 17031 |
| 11-Digit Census Tract | Use Standard Reporting Rules | Y | Code is determined by combining the numeric State, County and Census Tract Codes. Example: State = 17; County 031; Census Tract = 3405.00 Reported Census Tract = 17031340500 |
| Ethnicity Applicant/ Co-Applicant | Use Standard Reporting Rules | Y | |
| Race Applicant/ Co-Applicant | Use Standard Reporting Rules | Y | |
| Sex Applicant/ Co-Applicant | Use Standard Reporting Rules | Y | |
| Age Applicant/ Co-Applicant | Use Standard Reporting Rules | Y | |
| Income | Use Standard Reporting Rules | Y | |
| Type of Purchaser | Use Standard Reporting Rules | N | |
| Rate Spread | Use Standard Reporting Rules – See Detailed Explanation under Comments. | N | Unless your institution is exempt from reporting the Rate Spread, this field is required for open-end credit subject to Regulation Z. If the open-end credit is not subject to Regulation Z, this field is reported as not applicable – NA. To determine the Rate Spread for open-end credit we use the FFIEC’s Rate Spread Calculator and enter information that matches the “most closely comparable” closed-end transaction. So, what does that mean? – Rate Set Date – This will most likely be the date of application or the date the loan is approved. Follow your institution’s rules for determining and setting the interest rate for open-end credit. – APR% – Enter the periodic rate in effect at the time of loan consummation on the Final Credit Agreement. If the open-end credit is based on a variable rate, enter initial rate at the time of consummation. – Term – Enter the time to maturity as defined in the Final Credit Agreement for Fixed Rate loans. If the open-end credit does not have a definite plan length, you can use a 30 year fixed-rate loan as the most closely comparable closed-end transaction. If the open-end credit has a variable rate or a variable rate and fixed rate feature, enter the time period for the variable rate. |
| HOEPA Status | Use Standard Reporting Rules | N | |
| Lien Status | Use Standard Reporting Rules | Y | |
| Credit Score Applicant/ Co-Applicant | Use Standard Reporting Rules | Y | Institution may qualify for field reporting exemption. |
| Credit Score Model Applicant/ Co-Applicant | Use Standard Reporting Rules | Y | Institution may qualify for field reporting exemption. |
| Reason for Denial | Use Standard Reporting Rules | N | Institution may qualify for field reporting exemption. |
| Total Loan Costs | NA | N | |
| Total Points and Fees | NA | N | |
| Origination Charges | NA | Y | |
| Discount Points | NA | Y | |
| Lender Credits | NA | Y | |
| Interest Rate | Use Standard Reporting Rules | Y | Institution may qualify for field reporting exemption. |
| Pre-Payment Penalty Term | Use Standard Reporting Rules | N | Institution may qualify for field reporting exemption. Remember under Regulation Z – For an open-end credit plan, prepayment penalty means a charge imposed by the creditor if the consumer terminates the open-end credit plan prior to the end of its term, other than a waived, bona fide third-party charge that the creditor imposes if the consumer terminates the open-end credit plan sooner than 36 months after account opening. |
| DTI Ratio | Use Standard Reporting Rules | Y | Institution may qualify for field reporting exemption. |
| Combined LTV | Use Standard Reporting Rules | Y | Institution may qualify for field reporting exemption. |
| Loan Term | Use Standard Reporting Rules | Y | Institution may qualify for field reporting exemption. |
| Introductory Rate Period | Use Standard Reporting Rules | N | Institution may qualify for field reporting exemption. For open-end credit tied to an index that can change at any time, i.e., less than monthly, enter a 1. For all other variable rate products, enter the number of months the interest rate will be in effect. |
| Non-Amortizing Feature Balloon Payment | Use Standard Reporting Rules | N | Institution may qualify for field reporting exemption. |
| Non-Amortizing Feature Interest Only Payments | Use Standard Reporting Rules | N | Institution may qualify for field reporting exemption. |
| Non-Amortizing Features Negative Amortization | Use Standard Reporting Rules | N | Institution may qualify for field reporting exemption. |
| Non-Amortizing Features Other | Use Standard Reporting Rules | N | Institution may qualify for field reporting exemption. |
| Property Value | Use Standard Reporting Rules | Y | Institution may qualify for field reporting exemption. |
| Manufactured Home – Secured Property Type | Use Standard Reporting Rules | Y | Institution may qualify for field reporting exemption. |
| Manufactured Home – Land Property Interest | Use Standard Reporting Rules | N | Institution may qualify for field reporting exemption. |
| Total Units | Use Standard Reporting Rules | Y | |
| Multifamily Affordable Units | Use Standard Reporting Rules | N | Institution may qualify for field reporting exemption. |
| Submission of Application | Use Standard Reporting Rules | N | Institution may qualify for field reporting exemption. |
| Initially Payable to Institution | Use Standard Reporting Rules | N | Institution may qualify for field reporting exemption. |
| MLO NMLS Number | Use Standard Reporting Rules | N | Institution may qualify for field reporting exemption. |
| AUS | Use Standard Reporting Rules | N | Institution may qualify for field reporting exemption. |
| AUS Result | Use Standard Reporting Rules | Y | Institution may qualify for field reporting exemption. |
| Reverse Mortgage | Use Standard Reporting Rules | Y | Institution may qualify for field reporting exemption. |
| Open-end LOC | 1 | Y | Institution may qualify for field reporting exemption. |
| Business or Commercial Purpose | Use Standard Reporting Rules | Y | Institution may qualify for field reporting exemption. |
TCA – A Better Way!
