On December 21, 2022, the Consumer Financial Protection Bureau (“CFPB”) published technical amendments to Regulation C in the Federal Register. The amendments to Regulation C §§ 1003.2 and 1003.3, along with related comments in Supplement I to Part 1003 of Regulation C, provide that the reporting threshold for closed-end mortgage loans has been decreased from 100 loans to 25 loans in each of the prior two calendar years. The new threshold for closed-end mortgage loans is effective December 21, 2022.
In April 2020, the CFPB issued a final Home Mortgage Disclosure Act (“HMDA”) rule which amended Regulation C to raise the loan-volume coverage thresholds for closed-end mortgage loans and open-end lines of credit. The permanent threshold for collecting and reporting data about closed-end mortgage loans was increased from 25 to 100 loans in each of the prior two years, effective July 1, 2020. By raising the closed end loan threshold from 25 to 100 loans as of July 1, 2020, some institutions that previously would have been required to report data were no longer a reporting institution under HMDA. An institution that was subject to reporting as of January 1, 2020 because it originated at least 25 closed-end mortgage loans in 2018 and 2019 was no longer subject to reporting as of July 1, 2020, if it originated fewer than 100 closed-end loans during either of those years. The permanent threshold for collecting and reporting data about open-end lines of credit was increased from 100 to 200 in each of the prior two years, effective January 1, 2022.
However, on September 23, 2022, the United States District Court for the District of Columbia vacated the 2020 HMDA rule in regards to the reporting threshold of closed-end mortgage loans. The Court concluded that the increased reporting threshold was “arbitrary and capricious.” As a result of the court order, the CFPB has made a technical amendment to Regulation C, reverting the threshold for closed-end mortgage loans back to 25 loans in each of the two prior calendar years. This follows the threshold first established by the 2015 HMDA rule. The Court did not address the reporting threshold for open-end lines of credit
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