NCUA Alerts CUs to Concerning Changes in HMDA Reporting
Court ruling reduces the reporting threshold for closed-end mortgage loans from 100 to 25.
A regulatory alert issued by the NCUA late last week notified credit unions that the Home Mortgage Disclosure Act (HDMA) threshold for reporting closed-end mortgage loans is now 25 loans in each of the two preceding calendar years. This represented a reduction from the 100 loan threshold that was set by the 2020 HMDA Final Rule.
The alert, signed by NCUA Board Chairman Todd Harper, stated, “The NCUA recognizes that credit unions affected by this change may need time to implement or adjust policies, procedures, systems and operations to achieve compliance with these reporting requirements.”
The alert also stated that “the NCUA intends to take a flexible supervisory and enforcement approach” to these reporting changes.
“The NCUA will not initiate enforcement actions or cite HMDA violations for failures to report closed-end mortgage loan data collected in 2022, 2021 or 2020 for credit unions that meet Regulation C’s other coverage requirements and originated at least 25 closed-end mortgage loans in each of the two preceding calendar years but fewer than 100 closed-end mortgage loans in either or both of the two preceding calendar years,” according to the regulatory alert.
In a December 2022 joint letter to the Federal Financial Institution Examination Council (FFIEC), officials with NAFCU, CUNA and the American Bankers Association urged “the Federal Register, explicitly stating that with respect to lenders affected by the court’s ruling, calendar year 2023 will be a supervisory transition period during which the agencies will expect ‘good faith’ efforts to comply with the pre-2020 HMDA rule, and that the agencies will not cite HMDA violations or initiate enforcement actions against lenders that act in good faith to develop and implement reporting programs.”
The letter continued, “This approach would give lenders needed assurances regarding legal and examination risk and allow adequate opportunity for lenders to install or refine HMDA systems and achieve compliance. Without a definitive statement from all examining authorities, legal doubt will linger across all affected institutions.”
This approach, as laid out by the NCUA’s regulatory alert, was similar to the one published by the CFPB in a December post on its website.