CFPB action needed to relieve smaller lenders from HMDA strain

Small lenders – including credit unions – face a disproportionate burden under the current Home Mortgage Disclosure Act (HMDA) reporting requirements. America’s Credit Unions reached out directly to CFPB Acting Director Russell Vought with a letter sent Monday, urging meaningful action to change these burdens.  

Specifically, the letter urges the bureau to raise the closed-end HMDA reporting threshold from 25 loans to at least 500 loans to ease the compliance burden on smaller credit unions. The current threshold captures many small lenders even though the data adds little value, while the burden of compliance costs is significant.

While the threshold was increased in 2020, it reverted back to 25 after a 2022 decision from the U.S. District Court for the District of Columbia.

“We believe that raising the threshold to at least 500 loans is a practical and balanced solution that would significantly reduce unnecessary compliance burdens while preserving meaningful transparency and oversight. We also urge the Bureau to solicit input from industry stakeholders on both the current threshold and potential alternatives, including whether different thresholds should apply to smaller lenders,” wrote America’s Credit Unions Regulatory Advocacy Senior Counsel Luke Martone.

The letter encourages the CFPB to engage stakeholders, as it would help ensure that any revisions are well justified, aligned with HMDA’s objectives, and tailored to the operational realities of credit unions—all while being fully consistent with the Administration’s efforts to reduce unnecessary regulatory burdens.