The Federal Deposit Insurance Corporation (FDIC) is issuing this Financial Institution Letter to inform supervised institutions of recent changes regarding the Home Mortgage Disclosure Act (HMDA) reporting threshold for closed-end mortgage loans and the FDIC’s supervisory approach for enforcing related requirements. For FDIC-supervised institutions that meet Regulation C’s coverage requirements, the threshold for reporting data on closed-end mortgage loans is now 25 loans in each of the two preceding calendar years. In addition, for closed-end mortgage data collected in the years 2022, 2021, or 2020, the FDIC does not intend to initiate enforcement actions or cite HMDA violations for certain failures to report such loan data, as described in detail below.
Statement of Applicability: The contents of, and material referenced in, this FIL apply to all FDIC-supervised financial institutions.
Highlights:
On September 23, 2022, the United States District Court for the District of Columbia (Court) issued an order vacating the CFPB 2020 HMDA Final Rule regarding the loan volume reporting threshold requirements for closed-end mortgage loans.
- As a follow-up to the Court’s decision, the CFPB issued a statement on December 6, 2022, indicating that the Court’s decision means that the threshold for reporting closed-end mortgage loan data pursuant to HMDA is now 25 loans in each of the two preceding calendar years, which was the threshold established by the CFPB’s 2015 HMDA Final Rule, rather than the 100-loan threshold set by the CFPB’s subsequent 2020 HMDA Final Rule. The CFPB also announced that for those financial institutions subject to its jurisdiction, it does not intend to initiate enforcement actions or cite HMDA violations for failures to report closed-end mortgage loan data collected in 2022, 2021, or 2020, if the institutions (1) meet Regulation C’s other coverage requirements and (2) 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. The CFPB’s announcement can be found here.
- Like the CFPB, the FDIC recognizes that financial institutions affected by this change may need time to implement or adjust policies, procedures, systems, and operations to come into compliance with reporting obligations. Accordingly, for closed-end mortgage data, the FDIC plans to implement a supervisory approach for FDIC-supervised institutions consistent with the CFPB’s approach. For FDIC-supervised institutions that (1) are subject to Regulation C’s other coverage requirements, and (2) 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, the FDIC does not intend to initiate enforcement actions or cite HMDA violations for failures to report closed-end mortgage loan data for 2022, 2021, or 2020.
- While any FDIC-supervised institution may elect to report data voluntarily for those years, the FDIC does not expect those institutions to collect and report data retroactively for closed-end mortgage loans covered by the Court’s order vacating the CFPB 2020 HMDA Final Rule. Institutions affected by the Court’s order, and that meet the reporting thresholds of 25 closed-end mortgage loans in each of the two preceding calendar years as of 2023, should start collecting data in 2023 and reporting data in 2024.