CUNA Regulatory Comment Call
March 23, 2004
HMDA Public Disclosure Revisions
(NOT A MAJOR RULE)EXECUTIVE SUMMARY
- The Federal Reserve Board (Fed) is requesting comments on proposed revisions to the Home Mortgage Disclosure Act (HMDA) public disclosure statements to reflect recent changes to HMDA and Regulation C, which require the reporting of additional information and the use of standards for collection of data on race and ethnicity that are used by the Office of Management and Budget (OMB).
- These changes will revise a number of disclosure tables, delete certain tables, and add new tables. The revisions to the existing tables primarily reflect the changes to the race and ethnicity categories that are used by OMB and the itemization of data on manufactured housing loans.
- The proposed new tables will reflect the new data as to whether the annual percentage rate (APR) of the loans exceeds certain thresholds, whether the loans are subject to the Home Ownership and Equity Protection Act (HOEPA), as well as information regarding lien status, preapproval requests, and manufactured housing.
- Comments on these proposed revisions are due by May 10, 2004. Please submit your comments to CUNA by April 30, 2004.
Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Associate General Counsel Mary Dunn at mdunn@cuna.com and to Assistant General Counsel Jeff Bloch at jbloch@cuna.com; or mail them to Mary and Jeff in c/o CUNA’s Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, Suite 600, Washington, DC 20004-2601. If commenting directly to the Fed, you must refer to Docket No. R-1186. Due to current mail disruption at the Federal Reserve Board, please consider submitting comments by e-mail to regs.comments@federalreserve.gov. You may also contact us at 800-356-9655, ext. 6032, if you would like a copy of the proposed revisions, or you may access them on the Internet at the following address: http://www.federalreserve.gov/boarddocs/press/bcreg/2004/20040318/attachment2.pdf.
BACKGROUND
HMDA requires financial institutions and certain other nondepository institutions to collect, report, and disclose data about originations and purchases of home mortgage and home improvement loans. Data about applications that do not result in originations must also be reported. The Fed’s Regulation C implements HMDA.
Lenders subject to HMDA are required to report data on the HMDA Loan/Application Register (HMDA-LAR). The Federal Financial Institutions Examination Council processes the data to produce public disclosure statements, which are sent back to the lenders to be made available to the public by request. These public disclosure statements are also sent to public depositories, such as public libraries in each metropolitan statistical area (MSA), along with aggregate disclosures covering all lenders within the MSA. The Fed, along with NCUA and the other federal financial institution regulators, are required to develop the format for these public disclosures.
Recent amendments to Regulation C now require lenders to report the following:
- The rate spread between the APR on the loan and the yield on Treasury securities of comparable maturity when the spread exceeds three percentage points on first lien mortgages and five percentage points for subordinate lien mortgages.
- Whether the loan is subject to the Home Ownership and Equity Protection Act (HOEPA).
- Whether the loan involves manufactured housing.
- The type of lien on the property.
- Certain information about requests for preapproval.
The recent amendments also conform to the standards for collection of data on race and ethnicity that are used by OMB. The first year for which this new data is to be reported will be 2004, and the data will be reflected in the public disclosures that will be released in 2005. Click here and click here for more information about these recent HMDA changes.
DESCRIPTION OF THE PROPOSAL
To reflect the recent changes, the Fed has now proposed revisions to the public disclosure statements. The changes will revise a number of disclosure tables, delete certain tables, and add new tables. The revisions to the existing tables primarily reflect the changes to the race and ethnicity categories that are used by OMB and the itemization of data on manufactured housing loans. The deleted tables will be those that show action taken on applications for various types of loans, itemized by income and gender. These tables are being deleted because the information is included in other tables.
The proposed new tables will reflect the new data on the rate spread, HOEPA status, lien status, preapproval requests, and manufactured housing. These new tables will focus on conventional loans, as opposed to government-backed loans, which have not been subject to loan pricing problems. Click below for a copy of the revised public disclosure tables:
With regard to the rate spread data, lenders will have to provide the information by categories. Specifically, lenders will have to reflect the loans that are between 3% and 3.99% above the yield on comparable Treasury securities, those that are between 4% and 4.99% above the yield, and under similar categories up to 8 percentage points above the Treasury yield (although such detailed categories will not be required for manufactured housing loans). For these loans, lenders will also have to report the mean and median percentage points above the Treasury yield, as well as the number of first mortgage loans below the 3-percentage-point threshold.
The proposed new tables will be produced in two versions for each institution. One will reflect activity for each MSA in which the institution reports data, and the other will show the institution’s total activity nationwide. One difference between these two versions will be that only the nationwide version will show preapproval requests denied and preapproval requests approved but not accepted. Such information cannot be reflected in the MSA version since the property location is not determined unless the loan application extends beyond the preapproval stage.
The disclosure tables will also be revised to reflect racial and ethnic categories used by OMB. This change will give borrowers more options for describing themselves on applications, specifically the option of using more than one category.
QUESTIONS TO CONSIDER REGARDING THE FED’s
REGULATION C PROPOSAL
(The Fed has specifically requested comment on most of the
issues raised in these questions.)
- Should any of the disclosure tables be deleted? Should any of the proposed revisions
described above not be made? Should any of these revisions be made in another way (for example,
to display more, less, or different details)?
- Should additional revisions be made to the disclosure tables? With regard to the new
disclosure tables, are any part of them unnecessary? Should they be modified? Are any
additional tables needed?
- Do you agree with the proposal that the disclosure tables will reflect the number of first
mortgage loans in which the APR does not exceed three percentage points above the comparable
Treasury security? Do you agree that the disclosure tables should reflect the number of loans
within various ranges above the yield on the comparable Treasury security, such as 3% to 3.99%,
4% to 4.99%, and under similar categories up to 8 percentage points above the comparable
Treasury yield?
- Other comments?
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Eric Richard • General Counsel • (202) 508-6742 • erichard@cuna.com Mary Mitchell Dunn • SVP & Associate General Counsel • (202) 508-6736 • mdunn@cuna.com Jeffrey Bloch • Assistant General Counsel • (202) 508-6732 • jbloch@cuna.com Catherine Orr • Senior Regulatory Counsel • (202) 508-6743 • corr@cuna.com |
