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BILLING CODE: 4810-AM-P BUREAU OF CONSUMER FINANCIAL PROTECTION 12 CFR Part 1003 [Docket Nos. CFPB?2017?0010; CFPB?2017?0021] RIN 3170?AA64; 3170?AA76 Home Mortgage Disclosure (Regulation C), Final Rule AGENCY: Bureau of Consumer Financial Protection. ACTION: Final rule. SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is amending Regulation C to make technical corrections to and to clarify certain requirements adopted by the Bureau's Home Mortgage Disclosure (Regulation C) final rule (2015 HMDA Final Rule), which was published in the Federal Register on October 28, 2015. The Bureau is also amending Regulation C to increase the threshold for collecting and reporting data about open-end lines of credit for a period of two years so that financial institutions originating fewer than 500 open-end lines of credit in either of the preceding two years would not be required to begin collecting such data until January 1, 2020. The Bureau also is adopting a new reporting exclusion. DATES: This rule is effective on January 1, 2018, except that the amendments to ? 1003.5 in amendatory instruction 8, the amendments to ? 1003.6 in amendatory instruction 9, and the amendments to supplement I to part 1003 in amendatory instruction 10 are effective on January 1, 2019; and the amendments to ? 1003.2 in amendatory instruction 11, the amendments to ? 1003.3 in amendatory instruction 12, the amendments to ? 1003.5 in amendatory instruction 13, the amendments to ? 1003.6 in amendatory instruction 14, and the amendments to supplement I to part 1003 in amendatory instruction 15 are effective on January 1, 2020. See

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part VI for more information. FOR FURTHER INFORMATION CONTACT: Shaakira Gold-Ramirez, Paralegal Specialist, Joseph Devlin, Angela Fox, Kathryn Lazarev, and Alexandra W. Reimelt, Counsels; and Terry J. Randall, Senior Counsel, Office of Regulations, at 202?435?7700 or . SUPPLEMENTARY INFORMATION: I. Summary of the Final Rule

Regulation C implements the Home Mortgage Disclosure Act (HMDA), 12 U.S.C. 2801 through 2810. For over four decades, HMDA has provided the public and public officials with information about mortgage lending activity within communities by requiring financial institutions to collect, report, and disclose certain data about their mortgage activities. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended HMDA, transferring rulewriting authority to the Bureau and expanding the scope of information that must be collected, reported, and disclosed under HMDA, among other changes.1 In October 2015, the Bureau issued the 2015 HMDA Final Rule implementing the Dodd-Frank Act amendments to HMDA.2 The 2015 HMDA Final Rule modified the types of institutions and transactions subject to Regulation C, the types of data that institutions are required to collect, and the processes for reporting and disclosing the required data.3 In addition, the 2015 HMDA Final Rule established transactional thresholds that determine whether financial institutions are required to collect data on open-end lines of credit or closed-end mortgage loans. The closedend threshold was set at 25 loans in each of the two preceding calendar years, and the open-end

1 Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111?203, 124 Stat. 1376, section 2097?101 (2010). 2 Home Mortgage Disclosure (Regulation C); 80 FR 66128 (Oct. 28, 2015) (2015 HMDA Final Rule). 3 Id. at 66129.

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threshold was set at 100 open-end lines of credit in each of the two preceding calendar years. Most of the 2015 HMDA Final Rule takes effect on January 1, 2018.

The Bureau has identified a number of areas in which implementation of the 2015 HMDA Final Rule could be facilitated through clarifications, technical corrections, or minor changes. On April 25, 2017, the Bureau published a notice of proposed rulemaking (April 2017 HMDA Proposal) that would make certain amendments to Regulation C to address those areas.4 Since issuing the 2015 HMDA Final Rule, the Bureau also has heard concerns that the open-end threshold at 100 transactions is too low. On July 20, 2017, the Bureau published a proposal (July 2017 HMDA Proposal) to address the threshold for reporting open-end lines of credit.5 The Bureau is publishing final amendments to Regulation C pursuant to the April 2017 HMDA Proposal and the July 2017 HMDA Proposal.

This final rule temporarily increases the open-end threshold to 500 or more open-end lines of credit for two years (calendar years 2018 and 2019). In addition, the final rule corrects a drafting error by clarifying both the open-end and closed-end thresholds so that only financial institutions that meet the threshold for two years in a row are required to collect data in the following calendar years. With these amendments, financial institutions that originated between 100 and 499 open-end lines of credit in either of the two preceding calendar years will not be required to begin collecting data on their open-end lending before January 1, 2020. This temporary increase in the open-end threshold will provide time for the Bureau to consider

4 Technical Corrections and Clarifying Amendments to the Home Mortgage Disclosure (Regulation C) October 2015 Final Rule; 82 FR 19142 (Apr. 25, 2017) (April 2017 HMDA Proposal). 5 Home Mortgage Disclosure (Regulation C) Temporary Increase in Institutional and Transactional Coverage Thresholds for Open-End Lines of Credit, 82 FR 33455 (July 20, 2017) (July 2017 HMDA Proposal).

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whether to initiate another rulemaking to address the appropriate level for the open-end threshold for data collected beginning January 1, 2020.

The final rule establishes transition rules for two data points, loan purpose and the unique identifier for the loan originator. The transition rules require, in the case of loan purpose, or permit, in the case of the unique identifier for the loan originator, financial institutions to report not applicable for these data points when reporting certain loans that they purchased and that were originated before certain regulatory requirements took effect. The final rule also makes additional amendments to clarify certain key terms, such as multifamily dwelling, temporary financing, and automated underwriting system, and to create a new reporting exception for certain transactions associated with New York State consolidation, extension, and modification agreements.

In addition, the 2017 HMDA Final Rule facilitates reporting the census tract of the property securing or, in the case of an application, proposed to secure a covered loan that is required to be reported by Regulation C. The Bureau plans to make available on its website a geocoding tool that financial institutions may use to identify the census tract in which a property is located. The final rule establishes that a financial institution would not violate Regulation C by reporting an incorrect census tract for a particular property if the financial institution obtained the incorrect census tract number from the geocoding tool on the Bureau's website, provided that the financial institution entered an accurate property address into the tool and the tool returned a census tract for the address entered.

Finally, the final rule also makes certain technical corrections. These technical corrections include, for example, a change to the calculation of the check digit under ? 1003.4(a)(1)(i) and replacement of the word "income" with the correct word "age" in comment

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4(a)(10)(ii)?3. II. Background

HMDA requires certain banks, savings associations, credit unions, and for-profit nondepository institutions to collect, report, and disclose data about originations and purchases of mortgage loans, as well as mortgage loan applications that do not result in originations (for example, applications that are denied or withdrawn). When the statute was originally adopted, Congress stated the purposes of HMDA as providing the public and public officials with information to help determine whether financial institutions are serving the housing needs of the communities in which they are located and to assist public officials in their determination of the distribution of public sector investments in a manner designed to improve the private investment environment.6 Congress later expanded HMDA to require, among other things, financial institutions to report racial characteristics, gender, and income information on applicants and borrowers.7 In light of these amendments, the Board of Governors of the Federal Reserve System (Board) subsequently recognized a third HMDA purpose of identifying possible discriminatory lending patterns and enforcing antidiscrimination statutes, which now is recited with HMDA's other purposes in Regulation C.8

In 2010, Congress enacted the Dodd-Frank Act, which amended HMDA and also transferred HMDA rulemaking authority and other functions from the Board to the Bureau.9 Among other changes, the Dodd-Frank Act expands the scope of information relating to mortgage applications and loans that must be collected, reported, and disclosed under HMDA.

6 HMDA section 302(b), 12 U.S.C. 2801(b); see also 12 CFR 1003.1(b)(1)(i) and (ii). 7 Financial Institutions Reform, Recovery, and Enforcement Act of 1989, Public Law 101?73, section 1211 ("Fair lending oversight and enforcement" section), 103 Stat. 183, 524?26 (1989). 8 54 FR 51356, 51357 (Dec. 15, 1989), codified at 12 CFR 1003.1(b)(1). 9 Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111?203, 124 Stat. 1376, sections 1022, 1061, and 1094 (2010). Also, in 2010, the Board conducted public hearings on potential revisions to Regulation C.

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