Home Mortgage Disclosure Act Rule

The CFPB Home Mortgage Disclosure Act Rule

What is the HMDA Rule?

The Home Mortgage Disclosure Act (HMDA), which Congress enacted in 1975, requires certain financial institutions to collect, record, report, and disclose information about their mortgage lending activity.  The HMDA Rule implements the HMDA and sets out specific requirements for the collection, recording, reporting, and disclosure of mortgage lending information.

Who is Covered?

A financial institution is not subject to Regulation C unless it originated at least 25 covered closed-end mortgage loans in each of the two preceding calendar years or at least 500 covered open-end lines of credit in each of the two preceding calendar years, and it meets other applicable coverage requirements. For depository financial institution coverage, the HMDA Rule maintains Regulation C’s asset-size threshold, location test, federally related test, and loan activity test. For nondepository financial institutions, the HMDA Rule retains the location test. A nondepository financial institution is subject to Regulation C, effective January 1, 2018, if it originated at least 25 covered closed-end mortgage loans or at least 500 covered open-end lines of credit in each of the two preceding calendar and meets the location test.

Effective January 1, 2020, the HMDA Rule reduces the loan-volume threshold for covered open- end lines of credit to 100 covered open-end lines of credit in each of the two preceding calendar years. The other institutional coverage criteria do not change in 2020. Thus, effective January 1, 2020, a depository financial institution or nondepository financial institution is subject to Regulation C if it originated at least 25 covered closed-end mortgage loans in each of the preceding two calendar years or at least 100 covered open-end lines of credit in each of the two preceding calendar years and meets the other applicable coverage criteria.

For more information regarding which financial institutions are subject to the HMDA Rule, see the HMDA Institutional Coverage Charts.

Which loans are covered?

Regulation C generally applies to consumer-purpose, closed-end loans and open-end lines of credit that are secured by a dwelling.  A home improvement loan is not subject to Regulation C unless it is secured by a dwelling.

Beginning on January 1, 2018, Regulation C applies to business-purpose, closed-end loans and open-end lines of credit that are dwelling-secured and are home purchase loans, home improvement loans, or refinancings.  For business-purpose transactions, the HMDA Rule creates a dwelling-secured standard and maintains current Regulation C’s purpose test.

Effective January 1, 2020, open-end lines of credit are excluded transactions for a financial institution that does not originate at least 100 of them in each of the two preceding calendar years.
The HMDA Rule expands the types of preapproval requests that are reported, but also excludes requests regarding some type of loans from the scope of reportable preapproval requests. Under the HMDA Rule, reporting of preapproval requests that are approved but not accepted is required instead of optional. However, under the HMDA Rule, preapproval requests regarding home purchase loans to be secured by multifamily dwellings, preapproval requests for open-end lines of credit, and preapproval requests for reverse mortgages are not reportable.

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