Credit Unions Applaud Temporary HMDA Threshold Delay
While credit unions welcome the extension, some officials ask that the CFPB make the threshold permanent.
The CFPB has announced it will extend for two years the current Home Mortgage Disclosure Act (HMDA) threshold for financial institutions that originate fewer than 500 open-end lines of credit.
For data collection years 2020 and 2021, financial institutions that originated fewer than 500 open-end lines of credit in either of the preceding two years will not be required to collect data for open-end lines of credit.
While credit unions welcomed the extension, Alex Monterrubio, CUNA’s senior director of advocacy and counsel, said that the CFPB should make the threshold permanent, a move that would reduce the regulatory burden that credit unions face.
In commenting on the proposal earlier this year, other credit union officials agreed.
“HMDA reporting for credit unions has a disproportionate cost impact because these institutions often lack the scale, sophistication, and bargaining power to easily implement fully-automated reporting systems,” Andrew Morris, NAFCU’s senior counsel for research and policy wrote in a letter to the agency.
And they warned that lowering the threshold would harm credit unions.
“The benefit of collecting data from lenders that originate 200 to 500 open-end lines of credit would not even begin to warrant the additional burden this proposal would impose on them,” Paul Guttormsson, vice president of legal and compliance with the Wisconsin Credit Union League wrote in a letter to the CFPB.
However, a New York State official disagreed.
“The CFPB’s sole focus on the burden on lenders ignores the fact that these lenders have been collecting and reporting HMDA data for over 40 years,” said Jane Azia, bureau chief in the New York Attorney General’s Consumer Frauds and Protection Bureau said.
And a housing rights advocate said that the HMDA data is crucial.
“HMDA data are a fundamental tool for identifying potentially discriminatory behavior by individual lenders as well as the failure of the industry overall to serve low- and moderate-income communities and communities of color,” wrote Debby Goldberg, vice president of housing policy with the National Fair Housing Alliance (NFHA).