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today, the CFPB finalized its Home Mortgage Disclosure Act (HMDA) rule. Since
the rule was first proposed in July of 2014, we have strongly advocated for
credit unions to be exempt from the numerous requirements under HMDA. Unfortunately
the rule as finalized would add yet another layer of expense and burden to the
have personally met with and written the Bureau a number of times over the past year,
urging it to use its authority to exempt credit unions from HMDA provisions. Specifically,
we asked the agency to:
Unfortunately, CFPB decided to include HELOCs as
part of the required information, which will present a significant challenge to
credit unions which originate HELOCs on their consumer lending platforms. The
final rule also did not raise the loan volume threshold as we requested,
establishing it instead at 25 closed end mortgage loans or 100 open-end
LOCs. The 25 closed-end loan-volume threshold will go into effect on January 1,
2017, one year earlier than the
effective date for most of the remaining rule.
Chief Advocacy Officer Ryan Donovan had this to say about the final rule: “It
is disappointing that at a time when the CFPB should be working to increase the
availability of credit to middle class America, they choose to impose more and
more regulatory burden on credit unions, particularly since credit unions were
not engaged in those practices that lead to the imposition of HMDA and CRA on
CFPB needs to do a much better job articulating what it will do with this vast
data grab which goes way beyond the Dodd-Frank Act requirements," he
added. The rule itself is 797 pages long, and by the CFPB’s own estimates, the
changes represent an additional compliance burden of 4.7 million hours per year
for all entities required to report under HMDA.
Thankfully, the Bureau did pare back on some of the
proposed data points, such as “risk-adjusted, pre-discounted interest rate."
The CFPB also backed away from the proposal to require reporting of all
dwelling-secured transactions made for commercial purposes, and moved back the
first reporting date under the new rule to 2019 (for 2018 originations). Despite
these tweaks, the final HMDA rule will be extremely burdensome to credit unions
who are already struggling with the added burdens from previous mortgage
rulemakings. We will continue to express our concerns about this rule to the CFPB, and point out areas where
it impacts the ability of credit unions to serve members. You can read the text of the final rule here. The CFPB's Implementation page for this rule is here.
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Credit Union National Association is the most influential financial services trade association and the only national association that advocates on behalf of all of America's credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.
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