PIN IT

6/29/2017

HMDA

Concern for the decline of urban neighborhoods was a significant factor that led to HMDA’s enactment.  The law and its requirements continue to focus on lenders that are located in metropolitan statistical areas (MSAs).  An MSA is an urbanized area with a population of at least 50,000, which includes an urban center and surrounding areas that are economically and socially tied to it.  The Office of Management and Budget uses census data to identify MSAs.
ThinkstockPhotos-78806645.jpg

HMDA
Banks and small lenders now monitored by the CFBP
The first step in determining whether a financial institution must comply with HMDA is to establish whether it has a home or branch office in an MSA. Institutions that only operate outside of an MSA are not subject to the law’s data collection and reporting requirements. For example, a financial institution that exclusively serves rural areas is not subject to HMDA.
Financial institutions that are located in an MSA are subject to HMDA requirements if they meet established thresholds. Historically, depository and non-depository institutions have been subject to very different loan-volume and asset-size thresholds, but beginning on January 1, 2018, there will be a uniform loan-volume threshold for both types of institutions.
The new loan-volume threshold for depository and non-depository institutions is:
  • The origination of at least 25 closed-end mortgage loans in each of the two preceding calendar years, or
  • The origination of at least 100 open-end lines of credit in each of the two preceding calendar years
(12 C.F.R. §§1003.2(g)(1)(v), (g)(2)(ii))

If a non-depository institution meets the loan-volume threshold and had a home or branch office in an MSA on the preceding December 31, it is subject to the data collection and reporting requirements of HMDA. As previously mentioned, in 2018, there will no longer be an asset-size threshold for non-depository institutions (12 C.F.R. §1003.2(g)(2)).

If a depository institution meets the loan volume threshold and home or branch office in an MSA on the preceding December 31, it is subject to HMDA if it also:
  • Meets an annually-adjusted asset-size threshold (this threshold will allow small banks and credit unions to escape the burden of HMDA data collection and reporting requirements)
  • Originated at least one home purchase loan or refinance of a home purchase loan in the preceding calendar year, and
  • Meets one or more:
    • It is a federally insured or regulated institution (e.g. it is an FDIC bank or a Federal Reserve bank)
    • It makes federally insured or guaranteed loans (e.g. FHA loans or VA loans), or
    • It makes loans intended for sale to Fannie Mae or Freddie Mac

(12 C.F.R. §1003.2(g)(1))

No comments:

Post a Comment