CFPB gives small banks, CUs a break on HMDA reporting

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CFPB gives small banks, CUs a break on HMDA reporting

The Consumer Financial Protection Bureau has chose to give small financial institutions a tiny bit of regulatory relief, by temporarily easing their reporting requirements under the Home Mortgage Disclosure Act.

According to the CFPB, the temporary increase in the threshold will provide time for it to consider whether to permanently adjust the threshold for data collected beginning January 1, 2020. The report noted that a reverse mortgage reduces the equity homeowners have in their house, which could create a negative impact if the loan balance grows faster than the property's appreciation rate. home values will appreciate. The industry group urged the CFPB to raise the threshold to 2,000 loans and to make the increase permanent.

"We remain concerned about the staggering number of data requirements under the final rule and the number of community banks that will still be affected by the threshold cap", ICBA President Camden Fine said in a statement.

In the initial letter, Irwin cited the burden of collecting HMDA-required information from borrowers, concerns over data security, and the potential cost of HMDA compliance software specifically designed for HECMs.

The brief used an average, hypothetical homeowner to determine the reverse mortgage cost compared to the full benefits of Social Security if the consumer lives to the average lifetime expectancy, which is now 85 years old.

The CFPB initially proposed the reporting rule for home equity lines of credit back in 2015, claiming that the products helped contribute to the "overleverage" that eventually led to the mortgage crisis in the mid-2000s.

The Bureau also warns that borrowers can be at risk of losing equity in their home as well, especially if they want to sell their home.

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