RSSAs the number of smaller banks declines, the number of banks exempted from the Home Mortgage Disclosure Act also declines.
Each year, the regulator responsible for enforcement of the HMDA exempts banks below a certain asset size from the rule, sometimes referred to as Reg C. Historically, HMDA has been enforced by the Federal Reserve, but beginning last year, enforcement shifted to the Consumer Financial Protection Bureau.
On Dec. 28, the CFPB announced banks with fewer than $42 million in assets are exempt. Using call report data from Sept. 30, 2012, that means 666 out of the nation’s 7,106 banks are too small to be subject to HMDA.
Even though the threshold was increased 2.23 percent from last year’s threshold of $41 million, fewer banks now get the exemption. A year ago, when there were 7,366 banks in the country, 697 banks had less than $41 million in assets. Had the threshold remained $41 million, 630 banks would have been exempt; with the $1 million increase, however, 36 additional banks become exempt.
The Home Mortgage Disclosure Act requires lenders to collect information about mortgage loan applicants. The information is made public in aggregate terms and frequently is used in fair lending studies and other efforts to assess the allocation of mortgage credit.
