The Home Mortgage Disclosure Act (HMDA) requires lending institutions to collect and report vast amounts of data, but a partial exemption reduces that lengthy list for some. The Consumer Financial Protection Bureau (CFPB) outlined eligibility requirements for lenders to help determine whether the exemption applies. If you fail to fill out the proper fields, you can expect compliance issues. Conversely, if you fill out unnecessary fields, you waste valuable time that’d be better spent on higher-level tasks. Review the list of HMDA data fields covered by the partial exemption to help ensure your institution’s reports are accurate.
HMDA Partial Exemption Eligibility
If you originated fewer than 500 eligible closed- or open-end loans in the previous two years, you’re not required to collect or report data fields under the partial exemption. In 2018, the Bureau of Consumer Financial Protection issued a clarification and procedural rule to implement the requirements of section 104(a) of the Economic Regulatory Relief, and Consumer Protection Act that impacted HMDA. The ruling clarified several items, including:
- Which data points in Regulation C are covered by partial exemptions
- That HMDA reportable loans and lines of credit count toward the partial exemption threshold
- Designating a non-universal loan identifier for partially exempt transactions at institutions that choose not to report a universal loan identifier
- Confirmation that insured depository institutions and insured credit unions eligible for the partial exemption are able to report exempt data fields if they report all data fields within any exempt data point for which they report data
- Clarity on the exception to partial exemptions for a negative Community Reinvestment Act examination history
What is an HMDA Reportable Application?
An application isn’t HMDA reportable unless there’s a dwelling. The two main types are business and commercial purpose applications. Loans or applications secured by unimproved land are excluded, unless the loan proceeds will be used on purchasing or construction a dwelling that’s to be placed on the land within two years of closing. Temporary financing, which typically includes construction-only loans, is also excluded. Loans primarily for agricultural purposes also aren’t HMDA reportable.
HMDA Partial Exemption Data Fields
The following HMDA data fields are covered by the partial exemption:
- Universal Loan Identifier
- Rate Spread
- Credit Score and Credit Scoring Model
- Total Origination Charges
- Total Discount Points
- Lender Credits
- Interest Rate
- Prepayment Penalty Term
- Debt-to-Income Ratio
- Combined LTV Ratio
- Loan Term
- Introductory Rate Period
- Non-Amortizing Features
- Property Value
- Total Units
- Multifamily Affordable Units
- MLO NMLSR Identifier
- AUS and AUS Results
- Transaction Indicators:
- Reverse Mortgage
- Open-End Line of Credit
- Business or Commercial Purpose
Anders Banking and Financial Institutions advisors closely monitor the regulations most impacting the banking industry to ensure clients remain in compliance while efficiently meeting requirements. To learn more about our services, and the associated costs, request a meeting with an advisor below.
