Page 23 - December 31 2017 Reporter

HMDA and Company—

Highlights for the

Upcoming Year

by Sarah Sauceda,
Associate General Counsel
Sarah Sauceda for Compliance Alliance

This past year has shaped up to be quite a ride but One other slightly understated change has to
buckle up—2018 is fast approaching. do with preapprovals. Under the new rule, covered
Highlights for 2018 include: (1) Home Mortgage institutions will be required to collect, record, and report
Disclosure Act (HMDA) changes; (2) amendments to the information for approved but not accepted preapproval
Equal Credit Opportunity Act (ECOA); (3) an increased requests for home purchase loans. In contrast,
Truth-in-Lending (TIL) threshold; (4) Community preapproval requests for open-end lines of credit, home
Reinvestment Act (CRA) amendments; and (5) “sunset” purchase loans to be secured by multifamily dwellings,
provisions. and reverse mortgages will not be covered under
HMDA.
The time has come for the long-awaited changes
affecting HMDA to hit the banking world with a bang. Lastly and as most of you know, reportable data
HMDA – version 2018 – includes changes relating under HMDA has received a bit of a makeover. HMDA
to institutional and transactional coverage and data 2018 adds a few extra data points. These new data
collection, recording, reporting, and disclosure. points include: (a) applicant/borrower age, (b) credit
score, (c) automated underwriting system information,
As for institutional coverage, HMDA 2018 adopts a
(d) unique loan identifier, (e) property value, (f)
uniform loan-volume threshold for all institutions. This
application channel, (g) borrower-paid origination
means that starting January 1, 2018, an institution will
charges, (h) points and fees, (i) lender credits, (j)
be subject to HMDA if it originated 25 or more covered
discount points, (k) loan term, (l) prepayment penalty,
closed-end mortgage loans in each of the preceding
(m) non-amortizing loan features, (n) interest rate, and
calendar years, or if it originated 100 or more covered
(o) loan originator identifier as well as other data points.
open-end lines of credit in each of the past two years.
Of course, the institutions making these loans also need Again, the effective date for these changes is
to meet other applicable coverage requirements to be January 1, 2018. Be sure to remember that, although
subject to HMDA. the HMDA 2018 is upon us, you will still need to submit
data collected in 2017 under the current rule with the
As for the amendments to transactional coverage,
slight change of submitting the 2017 data to the CFPB
HMDA 2018 modifies the types of transactions that are
instead of the Federal Reserve Board.
covered. Basically, the new version of HMDA adopts
a dwelling-secured standard. As of January 1, 2018, The updates to HMDA can be found here: https://
covered loans will include both closed-end mortgage s3.amazonaws.com/files.consumerfinance.gov/f/
loans and open-end lines of credit secured by a documents/201708_cfpb_final-rule_home-mortgage-
dwelling. Another major change to this portion of HMDA disclosure_regulation-c.pdf
concerns business-purpose loans. Starting January 1, Because the regulators know that changing one
2018, dwelling-secured, business-purpose loans and major regulation isn’t enough fun, they have also
lines of credit will constitute covered loans if they are changed ECOA. ECOA’s current ethnicity and race
home purchase loans, home improvement loans, or information collection are updated in the 2018 version
refinancings. of the regulation. Additionally, the amendments add

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December 2017 IllInoIs RepoRteR