Sweet Relief: OCC Announces Changes to HMDA Data Reporting Requirements/Examination Practices - WST

On February 1st, the OCC issued a bulletin (2023-5) to inform affected banks and OCC agency examining personnel that the loan origination threshold for reporting HMDA data on closed-end mortgage loans has reverted back to the 25 transactions (in each of the preceding two years) which was the reporting threshold prior to the pandemic.

Wait a minute …. the title of this article says, “sweet relief”, so when does that happen? … Well, this unfortunate news was accompanied by some positive relief for affected banks when it comes to HMDA data examinations.

With this change, the bulletin makes it clear that OCC HMDA exams in the near term will be more of a diagnostic nature to “help banks identify HMDA compliance loan data reporting weaknesses”, since during the pandemic, the threshold was adjusted to one hundred (100) closed-end transactions. With the threshold change, OCC has announced its intentions not to assess penalties for failure to report closed-end mortgage loan data on reportable transactions conducted in 2020 - 2022 for affected banks that meet Regulation C’s (HMDA) coverage requirements.

So, the good news is that penalties will not be assessed for failure to report closed-end loan transaction data related to HMDA (Reg C) for the past three years. The bad news is that, as many of you know and feared, the threshold for having to report such data is no longer one hundred (100) closed-end loan transactions, but twenty-five (25).

You can read the entire OCC bulletin by accessing the below link:
https://www.occ.treas.gov/news-issuances/bulletins/2023/bulletin-2023-5.html

Authored by: Josh Mourning, CCBP