The Consumer Financial Protection Bureau (CFPB) has issued a proposal that would raise the home equity line of credit (HELOC) reporting threshold for community banks and credit unions from 100 loans, a requirement beginning in January 2018, to 500 loans through 2018 and 2019. The proposal would allow the CFPB time to weigh the possibility of a permanent change.
The Home Mortgage Disclosure Act (HMDA) will mandate most community banks and credit unions report HELOCs if they made 100 or more loans in each of the prior two years starting in 2018.
The proposal comes in response to concerns from community banks and credit unions, which have considerably less resources at their disposal to ensure compliance with reporting requirements.
“Home equity lines of credit worsened the foreclosure crisis that swept the country in 2008 and 2009,” says Richard Cordray, director of the CFPB. “We need to keep track of the responsible use of these loans for consumers, but after hearing from community banks and credit unions, we want to reconsider whether that goal can be achieved with a higher reporting threshold.”
Members of the industry are encouraged to submit feedback on the proposal to the CFPB now through July 31, 2017. View the proposal.
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