$41 million is the new HMDA exemption threshold
On Feb. 15, the new exemption threshold went into effect for HMDA reporting. The Consumer Financial Protection Bureau (CFPB) tweaked Regulation C of HMDA, raising the asset-size exemption threshold for depository institutions to $41 million or less, as of Dec. 31, 2011. Previously, the threshold was $40 million.
So, this begs the question: Which depository institutions will need to report their 2012 HMDA data next year? The FFIEC provides this checklist of questions – and what your answers could mean:
1. Is the depository institution a bank, credit union, or savings association?
2. Did the assets of the institution total more than $41 million on Dec. 31, 2011?
3. Did the institution have a home or branch office in a metropolitan statistical area or metropolitan division (MSA/MD) on Dec. 31, 2011?
4. In the preceding calendar year, did the institution originate at least one home-purchase loan or refinance a home-purchase loan secured by a first lien on a one-to-four-family dwelling?
5. Is the institution federally insured or regulated? Was the mortgage loan insured, guaranteed, or supplemented by a federal agency? Or was the loan intended for sale to the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC)?
If you answered “yes” to questions one through four and “yes” to at least one of the questions in number five, then HMDA applies to your institution's loan originations, purchases and applications in the current calendar year. A negative response to any one of the first four questions – or to all the questions in number five – would exempt your institution from filing HMDA.
The adjustment to $41 million was based on the 3.43 percent average increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the twelve-month period ending in November 2011, according to the CFPB. The threshold has increased nearly every year since the late 1990s, when the exemption was only for depository institutions with assets of $10 million or less.
Something else to keep on your radar: With the Dodd-Frank Act, financial institutions will be required to collect and report what is being referred to as “HMDA PLUS” data. The details haven’t been ironed out yet, but it looks like it will include: credit score, debt ratio, fees, points, note rate, annual percentage rate and loan-to-value. We’ve heard that the effective date for these new collection requirements will probably be Jan. 1 2013.
If you need help navigating HMDA, fair lending, CRA and other compliance-related requirements for your financial institution, TRUPOINT Partners can help. Email us at firstname.lastname@example.org or call us at 704-401-1730 for more information.