Home Mortgage Disclosure (Regulation C) Adjustment to Asset-Size Exemption Threshold

<RULE> CONSUMER FINANCIAL PROTECTION BUREAU <CFR>12 CFR Part 1003</CFR> <SUBJECT>Home Mortgage Disclosure (Regulation C) Adjustment to Asset-Size Exemption Threshold</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Consumer Financial Protection Bureau. <HD SOURCE="HED">ACTION:</HD> Final rule; official interpretation. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Consumer Financial Protection Bureau (CFPB) is amending official commentary interpreting requirements of the CFPB's Regulation C to reflect the asset-size exemption threshold for banks, savings associations, and credit unions based on the annual percentage change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Based on the 2.9 percent average increase in the CPI-W for the 12-month period ending November 2024, the exemption threshold is adjusted to $58 million from $56 million. Institutions with assets of $58 million or less as of December 31, 2024, are exempt from collecting data in 2025. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This rule is effective on January 1, 2025. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> George Karithanom, Regulatory Implementation & Guidance Program Analyst, Office of Regulations, at (202) 435-7700 or at: <E T="03">https://reginquiries.consumerfinance.gov.</E> If you require this document in an alternative electronic format, please contact <E T="03">CFPB_Accessibility@cfpb.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> The CFPB is amending Regulation C, which implements the Home Mortgage Disclosure Act of 1975 (HMDA) asset thresholds, to establish the asset-sized exemption threshold for depository financial institutions for 2025. The asset threshold will be $58 million for 2025. <HD SOURCE="HD1">I. Background</HD> HMDA requires most mortgage lenders located in metropolitan areas to collect data about their housing-related lending activity. <SU>1</SU> <FTREF/> Annually, lenders must report their data to the appropriate Federal agencies and make the data available to the public. The CFPB's Regulation C implements HMDA. <SU>2</SU> <FTREF/> <FTNT> <SU>1</SU>  12 U.S.C. 2801-2810. </FTNT> <FTNT> <SU>2</SU>  12 CFR part 1003. </FTNT> Prior to 1997, HMDA exempted certain depository institutions as defined in HMDA ( <E T="03">i.e.,</E> banks, savings associations, and credit unions) with assets totaling $10 million or less as of the preceding year-end. In 1996, HMDA was amended to expand the asset-size exemption for these depository institutions. <SU>3</SU> <FTREF/> The amendment increased the dollar amount of the asset-size exemption threshold by requiring a one-time adjustment of the $10 million figure based on the percentage by which the CPI-W for 1996 exceeded the CPI-W for 1975, and it provided for annual adjustments thereafter based on the annual percentage increase in the CPI-W, rounded to the nearest multiple of $1 million. <FTNT> <SU>3</SU>  12 U.S.C. 2808(b). </FTNT> The definition of “financial institution” in § 1003.2(g) provides that the CFPB will adjust the asset threshold based on the year-to-year change in the average of the CPI-W, not seasonally adjusted, for each 12-month period ending in November, rounded to the nearest $1 million. For 2024, the threshold was $56 million. During the 12-month period ending in November 2024, the average of the CPI-W increased by 2.9 percent. As a result, the exemption threshold is increased to $58 million for 2025. Thus, banks, savings associations, and credit unions with assets of $58 million or less as of December 31, 2024, are exempt from collecting data in 2025. An institution's exemption from collecting data in 2025 does not affect its responsibility to report data it was required to collect in 2024. <HD SOURCE="HD1">II. Procedural Requirements</HD> <HD SOURCE="HD2">A. Administrative Procedure Act</HD> Under the Administrative Procedure Act (APA), notice and opportunity for public comment are not required if the CFPB finds that notice and opportunity for public comment are impracticable, unnecessary, or contrary to the public interest. <SU>4</SU> <FTREF/> Pursuant to this final rule, comment 2(g)-2 in Regulation C, supplement I, is amended to update the exemption threshold. The amendment in this final rule is technical and non-discretionary, and it merely applies the formula established by Regulation C for determining any adjustments to the exemption threshold. For these reasons, the CFPB has determined that publishing a notice of proposed rulemaking and providing opportunity for public comment are unnecessary. Therefore, the amendment is adopted in final form. <FTNT> <SU>4</SU>  5 U.S.C. 553(b)(B). </FTNT> Section 553(d) of the APA generally requires publication of a final rule not less than 30 days before its effective date, except in the case of (1) a substantive rule which grants or recognizes an exemption or relieves a restriction; (2) interpretive rules and statements of policy; or (3) as otherwise provided by the agency for good cause found and published with the rule. <SU>5</SU> <FTREF/> At a minimum, the CFPB has determined that the amendment falls under the third exception to section 553(d). The CFPB finds that there is good cause to make the amendment effective on January 1, 2025. The amendment in this final rule is technical and non-discretionary, and it applies the method previously established in the agency's regulations for determining adjustments to the threshold. <FTNT> <SU>5</SU>  5 U.S.C. 553(d). </FTNT> <HD SOURCE="HD2">B. Regulatory Flexibility Act</HD> The Regulatory Flexibility Act (RFA) does not apply to a rulemaking where a general notice of proposed rulemaking is not required. <SU>6</SU> <FTREF/> As noted previously, the CFPB has determined that it is unnecessary to publish a general notice of proposed rulemaking for this final rule. Accordingly, the RFA's requirement relating to an initial and final regulatory flexibility analysis does not apply. <FTNT> <SU>6</SU>  5 U.S.C. 603(a), 604(a). </FTNT> <HD SOURCE="HD2">C. Paperwork Reduction Act</HD> In accordance with the Paperwork Reduction Act of 1995, <SU>7</SU> <FTREF/> the CFPB reviewed this final rule. The CFPB has determined that this rule does not create any new information collections or substantially revise any existing collections. <FTNT> <SU>7</SU>  44 U.S.C. 3506; 5 CFR part 1320. </FTNT> <HD SOURCE="HD2">D. Congressional Review Act</HD> Pursuant to the Congressional Review Act, the CFPB will submit a report containing this rule and other required information to the United States Senate, the United States House of Representatives, and the Comptroller General of the United States prior to the rule taking effect. <SU>8</SU> <FTREF/> The Office of Information and Regulatory Affairs (OIRA) has designated this rule as not a “major rule” as defined by 5 U.S.C. 804(2). <FTNT> <SU>8</SU>  5 U.S.C. 801 <E T="03">et seq.</E> </FTNT> <HD SOURCE="HD1">List of Subjects in 12 CFR Part 1003 </HD> Banks, banking, Credit unions, Mortgages, National banks, Reporting and recordkeeping requirements, Savings associations. <HD SOURCE="HD1">Authority and Issuance</HD> For the reasons set forth above, the CFPB amends Regulation C, 12 CFR part 1003, as set forth below: <HD SOURCE="HED">PART 1003—HOME MORTGAGE DISCLOSURE (REGULATION C)</HD> <REGTEXT TITLE="12" PART="1003"> 1. The authority citation for part 1003 continues to read as follows: <HD SOURCE="HED">Authority:</HD> 12 U.S.C. 2803, 2804, 2805, 5512, 5581. </REGTEXT> <REGTEXT TITLE="12" PART="1003"> 2. Supplement I to part 1003 is amended by revising <E T="03">2(g) Financial Institution</E> under the heading <E T="03">Section 1003.2—Definitions</E> to read as follows: <HD SOURCE="HD1">Supplement I to Part 1003—Official Interpretations</HD> <STARS/> <HD SOURCE="HD2">Section 1003.2—Definitions</HD> <STARS/> <HD SOURCE="HD2">2(g) Financial Institution</HD> 1. <E T="03">Preceding calendar year and preceding December 31.</E> The definition of financial institution refers both to the preceding calendar year and the preceding December 31. These terms refer to the calendar year and the December 31 preceding the current calendar year. For example, in 2019, the preceding calendar year is 2018 and the preceding December 31 is December 31, 2018. Accordingly, in 2019, Financial Institution A satisfies the asset-size threshold described in § 1003.2(g)(1)(i) if its assets exceeded the threshold specified in comment 2(g)-2 on December 31, 2018. Likewise, in 2020, Financial Institution A does not meet the loan-volume test described in § 1003.2(g)(1)(v)(A) if it originated fewer than 25 closed-end mortgage loans during either 2018 or 2019. 2. <E T="03">Adjustment of exemption threshold for banks, savings associations, and credit unions.</E> For data collection in 2025, the asset-size exemption threshold is $58 million. Banks, savings associations, and credit unions with assets at or below $58 million as of December 31, 2024, are exempt from collecting data for 2025. <E T="03">3. Merger or acquisition—coverage of surviving or newly formed institution.</E> After a merger or acquisition, the surviving or newly formed institution is a financial institution under § 1003.2(g) if it, considering the combined assets, location, and lending activity of the surviving or newly formed institution and the merged or acquired institutions or acquired branches, satisfies the criteria included in § 1003.2(g). For example, A and B merge. The surviving or newly formed institution meets the loan threshold described in § 1003.2(g)(1)(v)(B) if the surviving or newly formed institution, A, and B originated a combined total of at least 200 open-end lines o ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 16k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━