Lenders have only had to comply with the new Home Mortgage Disclosure Act rules for a little over two weeks, but the Trump administration has already signaled that it will not be assessing penalties on HMDA data collected in 2018 and reported in 2019.
And if Republicans in Congress have their way, even fewer lenders will have to comply with the new HMDA rules at all. The House of Representatives this week passed a bill that exempts some smaller lenders, community banks, and credit unions from the additional HMDA reporting requirements that went into effect at the beginning of this year.
On Thursday, the House passed the “Home Mortgage Disclosure Adjustment Act” on a partisan basis, with 234 of the House’s 237 Republican members voting in favor of the bill. One Republican, Rep. Walter Jones, R-North Carolina, voted nay, while two Republicans, Rep. Kristi Noem, R-South Dakota, and House Majority Whip Rep. Steve Scalise, R-Louisiana, abstained.
Scalise is recovering from being shot in June during a Congressional baseball team practices. Nine Democrats voted in favor of the bill, while the remaining 183 voted against it. One Democrat, Rep. Elijah Cummings, D-Maryland, abstained. Cummings was reportedly hospitalized earlier this month.
The bill passed by a margin of 243-184. Under the current rules, only lenders that originate 25 loans or less in two consecutive years are exempt from the new HMDA reporting rules. But the Home Mortgage Disclosure Adjustment Act would increase the exemption so lenders that originate fewer than 500 closed-end mortgage loans and fewer than 500 open-end lines of credit in each of the preceding two years would be exempt from the new reporting rules.
The Home Mortgage Disclosure Adjustment Act was written by Rep. Tom Emmer, R-Minnesota, who celebrated the bill’s passage in the House. “Since the inception of Dodd-Frank, our local small banks and credit unions have been forced to, quite literally, pay the price for a crisis they didn’t create,” Emmer said in a statement.
“I consistently hear from Minnesota’s small community banks and credit unions who are struggling to keep up with burdensome compliance costs. Some have significantly reduced the amount of mortgages or loans they originate, or even stopped offering mortgages altogether,” Emmer continued.
“Americans want the opportunity to achieve the American dream – to own a home, buy a car, or start a business,” he added. “I am proud the House passed the Home Mortgage Disclosure Adjustment Act to provide relief for these institutions to help make that happen.” Two of the nation’s top credit union trade groups also welcomed the bill on behalf of their members.
“NAFCU thanks Representative Emmer for introducing this bill, House Speaker Ryan for bringing it to a vote, and all members who voted today in support of reducing credit unions’ regulatory burden,” National Association of Federally-Insured Credit Unions President and CEO Dan Berger said.
“HMDA’s expanded reporting requirements have caused credit unions to incur substantial costs to comply, and we appreciate Congress’ work to decrease these compliance costs,” Berger added. “With this much-needed regulatory relief, credit unions will be able to focus on what they do best – providing financial services to Americans who need them most.” Credit Union National Association President/CEO Jim Nussle shared the same sentiments.
“This bill provides much-needed regulatory relief for credit unions, particularly smaller ones, and we’re pleased to see it pass the House,” Nussle said. “Revised HMDA reporting requirements add to compliance costs for credit unions, and legislation like this would make it easier for credit unions to remain in the mortgage market which will ultimately benefit American consumers.” The bill now moves to the Senate for consideration.