Under the Economic Growth, Regulatory Relief and Consumer Protection Act (EGRRPA), many banks were exempt from reporting all fields on the HMDA LAR as they had originated fewer than 500 closed-end HMDA Reportable loans or fewer than 500 open-end HMDA Reportable loans during the prior calendar year.
With the dramatic upturn in production during the unprecedented year of 2020, many banks have exceeded the threshold of 500 originated loans.
TCA has received the following question: When is the bank required to begin reporting all fields?
As long as the bank has at least a “satisfactory” CRA Rating:
Regulation C – 1003.3 (d)(2) states: Except as provided in paragraph (d)(6) of this section, an insured depository institution or insured credit union that, in each of the two preceding calendar years, originated fewer than 500 closed-end mortgage loans that are not excluded from this part pursuant to paragraphs (c)(1) through (10) or paragraph (c)(13) of this section is not required to collect, record, or report optional data as defined in paragraph (d)(1)(iii) of this section for applications for closed-end mortgage loans that it receives, closed-end mortgage loans that it originates, and closed-end mortgage loans that it purchases.
Regulation C – 1003.3 (d)(3) states: Except as provided in paragraph (d)(6) of this section, an insured depository institution or insured credit union that, in each of the two preceding calendar years, originated fewer than 500 open-end lines of credit that are not excluded from this part pursuant to paragraphs (c)(1) through (10) of this section is not required to collect, record, or report optional data as defined in paragraph (d)(1)(iii) of this section for applications for open-end lines of credit that it receives, open-end lines of credit that it originates, and open-end lines of credit that it purchases.
This means that if you reported more than 500 originated loans for 2020, you will be required to report all fields beginning with 2021 originations (to be filed by 3/1/2022).
Based on review of commentary, several compliance professionals and Regulators have interpreted this differently. In fact, we have posed this exact question to the CFPB and received two different answers as to when the bank is required to begin reporting all fields. One representative stated that you begin reporting with 2021 data, and another stated you begin reporting with 2022 data.
TCA has also received a response from the OCC Central Division. They too have received this question and have re-evaluated the regulation with legal counsel and the CFPB. The OCC’s determination is that, if a bank exceeded the threshold of 500 originated loans in 2020, then the bank begins reporting all fields for 2021 data.
The CFPB issued FAQs on this topic on April 15, 2021 that clarifies the partial exemption due to the number of questions that they have received concerning this matter. Below is a link to the FAQs.
If you have originated more than 500 HMDA reportable closed-end mortgage loans or more than 500 HMDA reportable open-end lines of credit during 2020, it is time to pull out the HMDA procedures developed prior to the EGRRCPA and prepare to report all data fields.
We realize that this is a huge undertaking, if you have questions or need assistance please reach out to TCA. We are here to help!
