(Editor’s note – another important piece of legislation from Senator Rounds to make sure that local banks can loan money to prospective homeowners -PP)
Rounds Introduces Bill to Provide Regulatory Relief for Community Financial Institutions
WASHINGTON—U.S. Senator Mike Rounds (R-S.D.) today introduced the Home Mortgage Disclosure Adjustment Act. This bill would provide regulatory relief for community banks and credit unions by exempting them from the Consumer Financial Protection Bureau’s (CFPB) revised Regulation C final rule, which amends the 1975 Home Mortgage Disclosure Act (HMDA).
“More and more of our community banks and credit unions in South Dakota have stopped offering mortgage lending services simply because they can’t afford to comply with the costly, time-consuming requirements of regulations coming out of Washington,” said Rounds. “Regulations like the revised HMDA rule force community banks and credit unions to divert resources away from providing financial services to their communities and instead direct them to comply with onerous regulations. My bill will alleviate compliance hurdles facing many of our community banks and credit unions and allow them to do what they do best—serve their customers and strengthen our communities.”
HMDA was enacted in 1975. The act requires certain financial institutions to provide the public, and public officials, with mortgage data to determine if financial institutions are properly serving the communities in which they are located. Following the passage of the Dodd-Frank Act, rulemaking authority for HMDA was transferred to the CFPB. The CFPB revised HMDA to require community banks and credit unions to collect nearly 50 unique data points on loan applications and share that information with the federal government.
The Home Mortgage Disclosure Adjustment Act would raise the thresholds for the number of closed- and open-end loans a financial institution can originate before being subject to HMDA reporting requirements. This would allow more community financial institutions to be exempt from the HMDA rule. The bill would raise the number of closed-end loans financial institutions can originate from 25 to 100 per calendar year. It would increase the number of open-end lines of credit from 100 to 200.
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