Just saw that the CFPB decided to publish the finalized HMDA rules on its implementation website. The executive summary clarifies that they are REVERSING COURSE on the definition of multifamily dwelling. It makes a little more sense, but here we are 4 months away from D-day, and they expect us to switch on a dime.

Please respond with your thoughts on this final rule. I'm eager to hear some gurus' opinions on it.

https://www.consumerfinance.gov/policy-c...implementation/

I am concerned that everything will not be ready for January. They say the HMDA Platform will be available for BETA testing in the fall of 2017. Here we are 4 months from the implementation date, with still a lot of unresolved issues. My LOS has not given me any timeline of their progress. Now is a good time to retire.

I was really kind of counting on hitting last night's lottery jackpot. Since that didn't happen, I guess I'll spend a few hours rewriting sections of training material. Again.

sigh....

Very happy with the LOC temporary reporting exemption!!!!!

I really wish they would write these in a way that you can actually READ them. Just tell me what I need to do.

^^^^AGREE 100%

I actually am retiring month end and to be very honest - changes to Reg C had a big impact on my early retirement! Sorry to bail, but folks this is too crazy!

Congratulations JSD.

Congratulations! Say a few prayers for us still left in the trenches.

Since I was one of those who wrote to them and asked them to reconsider their new definition of multifamily, I am very happy to see they actually did reverse course on that.

I have been grabbing pieces of time to try getting BOL's Regulation C pages updated with the new changes, so I started with the amendments at the end of the document. When I got to the changes to Appendix C, I tried to figure out what was changed, rather than replace everything already on our page. I couldn't figure it out, until I looked back in the section-by-section analysis in the prefatory text and discovered that in two places in the appendix ".97" was changed to "97". Yet the Bureau had restated nearly the whole appendix, when they could have simply said " '.97' is replaced by '97' in the two places it occurs." Aggravating waste of time.

Ugh. I'm sure you were ready for a couple of adult beverages after that torture.

I started reading the amendments Sunday afternoon and wrote a summary for our September newsletter. Here's what I wrote. I hope it is helpful.


HMDA Final Rules.
The CFPB released a final rule on August 24th that provided clarification to several “fuzzy” issues and gave relief to many financial institutions by increasing the threshold of open-end lines of credit from 100 to 500 per year. This will exempt many financial institutions from having to report lines of credit beginning in 2018. The final rule is a mere 225 pages long, but the CFPB also issued a 5-page Executive Summary.

Here’s a summary of the final rule:

1. The threshold for reporting open-end lines of credit is increased from 100- 500 in each of the last years. In other words, if your institution did not originate 500 or more applicable lines of credit (“lines”) in 2017 AND 2016, you are exempt from reporting lines in 2018. This is a temporary increase. The CFPB may change the 500 threshold back to 100 in 2020. Unfortunately, the threshold for closed-end loans (“loans”) remains at 25 in each of the prior two years.

2. The definition of “Temporary Financing” was clarified to exempt:
a. Loans/lines made to construct a dwelling for sale (builder loans/lines); and
b. Loans/lines intended to be replaced by a new loan/line to the same borrower by a different institution. In other words, the first phase of two phase financing even when the permanent phase is with a different lender.

3. The definition of “multifamily dwelling” has been modified:
a. A loan/line secured by 5+ dwellings in more than one location and which are not part of a multifamily dwellings, is not considered to be secured by a multifamily dwelling.
b. A loan/line secured by 5+ separate dwellings located within a multifamily dwelling but not secured by the entire multifamily dwelling (i.e. an apartment building) is also not considered to be secured by a multifamily dwelling.
There are several examples to clarify what is and is not a multifamily dwelling in the final rule.

4. Home improvement loans/lines on mixed-use properties has been clarified. Credit extended to improve commercial space within a multifamily dwelling is not a “home improvement” loan. However, improvements to a commercial space within a 1-4 family dwelling IS a “home improvement loan. We will write a separate summary on this topic and include several examples to provide further understanding.

5. The CFPB clarified several issues on collecting and reporting Demographic Information:

a. Applicants can choose subcategories of race and ethnicity without choosing aggregate categories. For example, if an applicant selects only the “Mexican” box, you report “Mexican” without reporting “Hispanic or Latino”.

b. If an applicant chooses to write in information in the free-form fields of the race or ethnicity subcategories, you may, but are not required to, report “Other” for the race (American Indian/Alaska Native, Asian, Pacific Islander) or for the ethnicity (Hispanic Other).

c. If an applicant chooses “Hispanic”, “Not Hispanic” and selects all four Hispanic subcategories (total of six), you should report the main categories (“Hispanic” and “Not Hispanic”) and then choose any three of the subcategories – at your choosing – for a total of five ethnicity responses.

6. The CFPB plans to release a geocoding tool to assist in identifying census tracts. If the CFPB tool is used and an incorrect census tract is obtained, it would not be a violation as long as you entered an accurate property address.

There was no mention of a delay in the final rule, so be prepared to begin applying these new rules to any loans/lines with an action date in 2018. As always, we are here to help you with this process. We have several webinars and live training events scheduled in the next few months. You can find out more information at our website. We’re also conducting numerous customized training sessions for financial institutions. If you’d like more information on customized training, contact us as soon as possible. Be sure to stay tuned to our blogs and newsletter for other clarifications to this complex regulation.

Thanks David!

I recognized your handiwork, Steve, on the double tracking for multifamily.

I am personally quite happy that they dropped that idea about multiple 1 to 4 family properties being treated as multifamily. When they first responded to a question I posed in that manner, I replied that I was shocked!

I prepared a detailed chart of the race/ethnicity changes that goes through each point. If you can't access the download from my blog (it is in the Amazon S3 cloud) let me know and I can email (if you give me your email address.)

Blog post with chart

The final rule was published in the Federal Register today: Click here .

Thanks for the summary David!