As part of its revisions to HMDA the Consumer Financial Protection Bureau (CFPB) is considering whether there is an opportunity to level the playing field between bank and nonbank lenders. Today, banks that meet certain conditions must submit annual reports even if they make only a single loan. However, nonbank mortgage lenders generally are required to report only if they make 100 loans and meet other conditions.
The CFPB is considering a rule intended to create a more consistent threshold by requiring all banks and nonbanks that meet certain conditions to report if they make 25 or more loans in a year, but exempting those that fall beneath that proposed threshold. The current asset exemption and the exemption for those that do not have an office in a Metropolitan Statistical Area (MSA) condition may be deleted.
The CFPB has compiled statistics on the number of lenders that are currently covered that would be exempt under the new guidelines, and, of course the number of lenders that are currently exempt that would be covered in the future. The number of banks affected, positively or negatively, is not huge; but to those negatively impacted the change is significant.
Going from covered to exempt is nice, but I have lived through going from exempt to covered with several banks over the years; it is a painful, time-consuming process.
The next article explores which types of loans and applications may be reportable in the future.