2015 Rule – Effective January 1, 2018, what criteria should a bank, savings association, or credit union measure to determine whether it is subject to Regulation C?

Compliance > Regulation C - HMDA > CFPB
Q:  Effective January 1, 2018, what criteria should a bank, savings association, or credit union measure to determine whether it is subject to Regulation C?
 
A:    Under the 2015 HMDA Rule, effective January 1, 2018, a bank, savings association, or credit union is a Depository Financial Institution, a Financial Institution, and subject to Regulation C if it meets ALL5 of the following:
 
1.   Asset-Size Threshold. On the preceding December 31, the bank, savings association, or credit union had assets in excess of the asset-size threshold published annually in the Federal Register and posted on the Bureau’s website. The phrase “preceding December 31” refers to the December 31 immediately preceding the current calendar year. For example, in 2018, the preceding December 31 is December 31, 2017. 12 CFR 1003.2(g)(1)(i).
 
2.   Location Test. On the preceding December 31, the bank, savings association, or credit union had a home or Branch Office located in an MSA. 12 CFR 1003.2(g)(1)(ii).
 
For purposes of this location test, a Branch Office for a bank, savings association, or credit union is an office: (a) of the bank, savings association, or credit union (b) that is considered a branch by the institution’s Federal or State supervisory agency. For purposes of the 2015 HMDA Rule, an automated teller machine or other free-standing electronic terminal is not a Branch Office regardless of whether the supervisory agency would consider it a branch. 12 CFR 1003.2(c)(1). A Branch Office of a credit union is any office where member accounts are established or loans are made, whether or not an agency has approved the office as a branch. Comment 2(c)(1)-1.
 
3.   Loan Activity Test. During the preceding calendar year, the bank, savings association, or credit union originated at least one Home Purchase Loan or Refinancing of a Home Purchase Loan secured by a first lien on a one-to four-unit Dwelling. 12 CFR 1003.2(g)(1)(iii).
 
For more information on whether a loan is secured by a Dwelling, is a Home Purchase Loan, or is a Refinancing of a Home Purchase Loan, see Sections 4.1.1.2 and 5.7.
 
4.   Federally Related Test. The bank, savings association, or credit union:
a. Is federally insured; or
b. Is federally regulated; or
c. Originated at least one Home Purchase Loan or Refinancing of a Home Purchase Loan that was secured by a first lien on a one- to-four-unit Dwelling and also (i) was insured, guaranteed or supplemented by a Federal agency OR (ii) was intended for sale to Fannie Mae or Freddie Mac. 12 CFR 1003.2(g)(1)(iv).
 
5. Loan-Volume Threshold. The bank, savings association, or credit union originated at least 25 Closed-End Mortgage Loans in each of the two preceding calendar years, or originated at least 100 Open-End Lines of Credit in each of the two preceding calendar years. When the bank, savings association, or credit union determines whether it meets this loan-volume threshold, it does not count transactions excluded by 12 CFR 1003.3(c)(1) through (10). 12 CFR 1003.2(g)(1)(v). These Excluded Transactions are discussed below in Section 4.1.2 in paragraphs 1 through 10. For more information on Closed-End Mortgage Loans, Open-End Lines of Credit, and Excluded Transactions, see Section 4.1.
 
When determining if it meets the loan-volume threshold, a bank, savings association, or credit union only counts Closed-End Mortgage Loans and Open-End Lines of Credit that it originated. Only one institution is deemed to have originated a specific Closed-End Mortgage Loan or Open-End Line of Credit under the 2015 HMDA Rule, even if two or more institutions are involved in the origination process. Only the institution that is deemed to have originated the transaction under the 2015 HMDA Rule counts it for purposes of the origination threshold. Comments 2(g)-5; see also comments 4(a)-2 through -4. For more information on how to determine whether an institution is deemed to have originated a transaction under the 2015 HMDA Rule, see Section 4.2.3.
 
The 2015 HMDA Rule also includes a separate test to ensure that Financial Institutions that meet only the 25 Closed-End Mortgage Loan threshold are not required to report their Open-End Lines of Credit, and that Financial Institutions that meet only the 100 Open-End Line of Credit threshold are not required to report their Closed-End Mortgage Loans. 12 CFR 1003.3(c)(11) and (12). For more information, see Section 4.1.2.
 
 
5 When determining whether it meets these criteria on or after January 1, 2018, a bank, savings association, or credit union relies on the definitions in the 2015 HMDA Rule.  
 
 
ADDITIONAL INFORMATION:
This information was obtained from the CFPB’s Home Mortgage Disclosure (Regulation C) Small Entity Compliance Guide, which may be accessed here: http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/hmda-implementation/
 
 

Add Feedback