So if you're newly exempt -- what's your plan?

My understanding is you can continue collecting as if you were a HMDA bank due to §1002.5(a)(4)... right? So if you think you might eventually exceed the threshold this seems like the smartest option.

If you go with that -- you don't have to worry about collecting information for loans that are not subject to Reg. B GMI but are subject to Reg. C, right?

If you are newly exempt, you have three options to proceed: 1.) Voluntarily report, 2.) continue to (temporarily) collect DI under Reg C (due to 1002.5(a)(4)), or 3.) transition to Reg B collection.

If you go with the option to keep collecting DI information (temporarily), yes, you won't have to worry about collecting information for loans that are not subject to Reg B GMI collection as you will still be collecting in accordance with Reg C.

From the commentary:
“Paragraph 5(a)(4). 1. Other permissible collection of information. Information regarding ethnicity, race, and sex that is not required to be collected pursuant to Regulation C, 12 CFR part 1003, may nevertheless be collected under the circumstances set forth in § 1002.5(a)(4) without violating § 1002.5(b). The information must be retained pursuant to the requirements of § 1002.12.”

We are also newly exempt and will only be collecting under Reg B. We're splitting hairs about those applications submitted prior to July 1st but closing after the effective date. To collect or not to collect? Complete HMDA packages or not?

What do you mean by "complete HMDA packages"?

If the applications were submitted before July 1, they should include the "complete HMDA package" with the expanded demographic information portion of the application, because you were still a HMDA reporter until midnight of June 30.

So if we chose to go with option 2, temporarily continue to collect as per HMDA rules, will we need to do so consistently for the full 2020 calendar year, or are we allowed to switch to option 3 at some time during the remainder of this year?

You were subject to HMDA prior to 7/1/2020. Therefore, you must collect demographic info. If you took action on the application (denied, for example) prior to 7/1, I recommend you record that info on your LAR (although technically not required after 4/1/20), but you don't have to report it in 2021. If you took action on it on 7/1 or after, you are no longer subject to HMDA, so you don't record it on your LAR and you don't report it in 2021.

If you go with Option #2, my answer doesn't change. You can continue to collect DI but you still don't need to record or report it.

Unfortunately, the rule doesn't give us any guidance about timing. Therefore, I see nothing that prohibits a mid-year change. However, I would think it would be "cleaner" to make the change at year end, but I don't see anything that prohibits you from transitioning to collection under Reg B mid-year.

1002.5(a)(4)(iii) of Regulation B which says this (emphasis added):
“(iii) A creditor that submitted HMDA data for any of the preceding five calendar years but is not currently a financial institution under 12 CFR 1003.2(g) may collect information regarding the ethnicity, race, and sex of an applicant for a loan that would otherwise be a covered loan under 12 CFR 1003.2(e) if not excluded by 12 CFR 1003.3(c)(11) or (12);”