Texas Community Reinvestment Update 2007
2005-2006 Changes to the Home Mortgage Disclosure Act (HMDA)
The FRB finalized several adjustments and technical amendments in 2005 and 2006 to Regulation C requiring the reporting of public loan data to determine whether financial institutions are serving the housing needs of their communities. Designed to help public officials attract private investment to areas in need and to identify discriminatory lending patterns, Regulation C applies to savings associations, credit unions and mortgage lending institutions.
- Effective January 1, 2003, the FRB required lenders to ask applicants their national origin or race and sex on their loan applications taken by telephone. The telephone application rule now applies to mail and Internet applications.
- Beginning in 2004 for submission by March 1, 2005, amended Regulation C requires lenders to collect and report additional data on home loans and financing for manufactured homes, including loan pricing information, lien status, e.g., secured by a first or subordinate lien, or unsecured.
- As of January 1, 2004, Regulation C began requiring HMDA and CRA reporters to use the new geographic statistical area designations provided by the U.S. Office of Management and Budget (OMB) on June 6, 2003 when collecting data for reporting in March 2005. OMB's revised metropolitan statistical area boundaries led to changes in definitions updated in February 2004 and effective December 2003. Only the terms MSA (used in place of metropolitan area) and MetroDivs (Metropolitan Divisions) will be recognized for HMDA and CRA reporting.
- Also starting January 1, 2004, the FFIEC required lenders to switch to the five-digit number assigned to Metropolitan Statistical Areas, not the previous four-digit number when collecting and reporting HMDA data. For non-depository lenders, effective January 1, 2004, Regulation C began requiring a $25 million volume test to the existing percentage-based coverage test for mortgage bankers that make at least $25 million in mortgages annually. For 2004 data collection, the asset threshold for depository lenders was raised to $33 million from $32 million and remained unchanged at $10 million or less for non-depository institutions. The FFIEC uses the loan data submitted under the HMDA to create reports for each metropolitan area in the U.S. In 2004, about 8,121 financial institutions provided a total of 42 million loan records for calendar year 2003.
- The FRB raised the asset exemption threshold for depository institutions to $35 million in December 2005 for 2006 data collection, but left the threshold unchanged for nondepository institutions.
- Next, the FRB raised the asset exemption to $36 million in December 2006 for 2007 data collection. The FRB left the threshold for nondepository institutions for 2007 data collection unchanged at $10 million or less when combined with a parent corporation's assets or originated 100 or more home purchase loans including refinancings. Nondepository institutions may combine their assets of parent corporations in the preceding calendar year.