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Michigan Credit Union League

CFPB Temporarily Changes HELOC Reporting Threshold; Provides Relief for Credit Unions

Yesterday, the Consumer Financial Protection Bureau (CFPB) issued a rule amending the 2015 updates to the Home Mortgage Disclosure Act (HMDA) rule. The Bureau has temporarily changed reporting requirements for credit unions that issue home-equity lines of credit (HELOC), and clarified the information that financial institutions are required to collect and report about their mortgage lending.

"The Home Mortgage Disclosure Act is a vital source of information on the health and fairness of the mortgage market," said CFPB Director Richard Cordray. "Today’s amendments show that the Consumer Bureau is committed to ensuring that financial institutions are able to comply with the rule, and to promoting transparency across the largest consumer financial market in the world.”

The CFPB’s amendment, scheduled to take effect in January 2018, has increased financial institutions’ reporting threshold from 100 loans (made in each of the last two years) to 500 loans through calendar years 2018 and 2019. Per the CFPB, this decision will allow them to consider whether to make a permanent adjustment, beginning January 2020.

As we reported last month, the compliance burden placed on credit unions as a result of the reporting threshold was significant enough to persuade 23 percent of credit unions to curtail their HELOC offerings or stop providing them outright, per CUNA.

“Today’s changes are a direct result of the combined efforts of CUNA, the Leagues and credit unions’ strong advocacy. While this is a step in the right direction, CUNA will keep working toward a complete exemption from the HELOC reporting requirement," said CUNA President/CEO Jim Nussle upon the CFPB’s announcement. "An expanded exemption for credit unions makes more sense given there has been no evidence of wrongful conduct and credit union HELOC data would ultimately be inconclusive because of their field of membership requirements.”

This amendment is evidence that credit unions have reason for optimism, going forward, in the pursuit of exemption. As Cordray previously stated, this relief is a result of credit unions and credit union associations making their voice heard, advocating for regulatory relief in order for credit unions to best provide for their members and communities.

Find more details regarding the CFPB's amendment here.

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2017-08-25 00:00:00