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#2274825 - 08/26/22 09:06 PM Crossing HMDA Exemption thresholds - report change
Help! Compliance Offline
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Joined: Oct 2012
Posts: 94
San Antonio, TX
Our bank may be crossing both the 500 originations and 200 HELOCs thresholds this year. If we cross both thresholds again next year, will we lose our partial exemption to become full reporters and add all HELOC applications the 3rd year…or are both of these applicable and effective that 2nd year, meaning despite not knowing if we will cross those thresholds for the 2nd time, we have to be ready to report all the data the 2nd year? I have always thought for both of these exemptions, adding them or reporting them in full began the 3rd year, but others mentioned we may need to have that data ready to report for that 2nd year we may cross both or either thresholds for the 2nd time. Which is it?

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#2274831 - 08/26/22 09:35 PM Re: Crossing HMDA Exemption thresholds - report change Help! Compliance
Help! Compliance Offline
Member
Joined: Oct 2012
Posts: 94
San Antonio, TX
Never mind. It was confirmed that my original interpretation was correct. Such report changes would be effective the 3rd year.

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#2275372 - 09/10/22 02:22 PM Re: Crossing HMDA Exemption thresholds - report change Help! Compliance
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
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500 originations is the threshold for the partial exemption. If you cross that in one year, you lose the partial exemption immediately for the following January 1. Also, the partial exemption threshold for open-end is also 500.

Mandatory reporting thresholds are 100 in each of the 2 preceding calendar years for closed-end, and 200 in each of the 2 preceding calendar years for open-end. Don't confuse those with the partial exemption thresholds of 500.

The partial exemption thresholds operate in an opposite manner from the mandatory reporter thresholds, where an institution must hit the threshold 2 years running to become a mandatory reporter.) For partial exemption, you must be BELOW the threshold for 2 years running to qualify.

So, to use the partial exemption, using closed-end as the example, your institution would have to be below 500 in each of the two preceding calendar years. This means if you cross the threshold in one of those 2 preceding years the partial exemption is lost. Open-end operates in the same way.

Refer to 1003.3(d) for rules on the partial exemption.

The partial exemption states, for closed-end:

(2) Except as provided in paragraph (d)(6) of this section, an insured depository institution or insured credit union that, in each of the two preceding calendar years, originated fewer than 500 closed-end mortgage loans that are not excluded from this part pursuant to paragraphs (c)(1) through (10) or paragraph (c)(13) of this section is not required to collect, record, or report optional data as defined in paragraph (d)(1)(iii) of this section for applications for closed-end mortgage loans that it receives, closed-end mortgage loans that it originates, and closed-end mortgage loans that it purchases.

And for open-end:

(3) Except as provided in paragraph (d)(6) of this section, an insured depository institution or insured credit union that, in each of the two preceding calendar years, originated fewer than 500 open-end lines of credit that are not excluded from this part pursuant to paragraphs (c)(1) through (10) of this section is not required to collect, record, or report optional data as defined in paragraph (d)(1)(iii) of this section for applications for open-end lines of credit that it receives, open-end lines of credit that it originates, and open-end lines of credit that it purchases.
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#2275373 - 09/11/22 05:09 PM Re: Crossing HMDA Exemption thresholds - report change Help! Compliance
Andy_Z Offline
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Andy_Z
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Wish we had "Like" buttons, especially for expert assistance like this.
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#2275390 - 09/12/22 01:56 PM Re: Crossing HMDA Exemption thresholds - report change Help! Compliance
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,958
Bloomington, IN
I agree Andy. This is the best explanation I recall seeing for how the thresholds work.

So, to use the partial exemption, using closed-end as the example, your institution would have to be below 500 in each of the two preceding calendar years. This means if you cross the threshold in one of those 2 preceding years the partial exemption is lost.

Just one point of clarification for those that may be wondering. It is my understanding the partial exemption is not "permanently" lost. In other words if you go 2 consecutive years below the threshold after losing the partial exemption you regain it.
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#2276523 - 10/07/22 11:46 PM Re: Crossing HMDA Exemption thresholds - report change Help! Compliance
Rocky P Online
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Joined: Jun 2003
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Florida
Kaybee - missed you!
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