by Amy Kleinschmit, Director of Compliance

The exemption threshold is adjusted to increase to $42 million.  Therefore, banks, savings associations, and credit unions with assets of $42 million or less as of December 31, 2012, are exempt from collecting data in 2013.  Remember that an institution’s exemption from collecting data in 2013 does not affect its responsibility to report data it was required to collect in 2012.

Regulation C, which implements the Home Mortgage Disclosure Act (HMDA) applies to certain financial institutions, including banks, savings associations, credit unions, and other mortgage lending institutions, as defined within the regulation. Regulation C requires an institution to report data to the appropriate Federal agency about home purchase loans, home improvement loans, and refinancings that it originates or purchases, or for which it receives applications; and to disclose certain data to the public.  This purpose of Regulation C is intended to provide the public with loan data that can be used to help determine whether financial institutions are serving the housing needs of their communities; to assist public officials in distributing public-sector investment so as to attract private investment to areas where it is needed; and to assist in identifying possible discriminatory lending patterns and enforcing antidiscrimination statutes.

Regulation C’s definition of “financial institution” 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 million. 12 CFR 1003.2.  During the 12-month period ending in November 2012, the CPI-W increased by 2.23 percent.  This resulted in the exemption threshold is increasing from $41 million to $42 million.

Should you have any questions or concerns on this or any other compliance issue, please do not hesitate to contact Amy Kleinschmit at akleinschmit@cuad.coop or 701.214.9721.