Credit unions representing nearly a quarter of the nation’s members will get a break from reporting home equity line of credit data to federal regulators under a rule change proposed Monday.
CFPB Director Richard Cordray said Monday the agency would issue a proposal within two weeks to raise the HELOC reporting threshold.
The current rule under the Home Mortgage Disclosure Act, which is designed to prevent discrimination in lending, requires credit unions to report data from home equity lines of credit to the CFPB starting in 2018.
The rule now exempts credit unions only if they grant fewer than 100 HELOCs per year. But CUNA and other industry groups had been pushing for a higher threshold.
“In recent months, the bureau has heard increasing concerns from community banks and credit unions about the burdens that this new reporting regime will impose on them,” Cordray wrote in a letter Monday to U.S. Sens. Heidi Heitkamp (D-N.D.) and Mike Rounds (R-S.D.).
Cordray said he will propose exempting institutions that originate fewer than 500 HELOCs in either of the previous two calendar years from reporting in 2018 and 2019.
“Temporarily increasing the HELOC threshold in this way will give small institutions additional relief and provide the Consumer Bureau ample opportunity to reconsider the HELOC threshold contained in the final rule and decide where it should be beginning in 2020,” Cordray wrote.
The move would provide regulatory relief to about 480 credit unions with $299.2 billion in assets and 24.7 million members, based on NCUA data for credit unions granting 100 to 499 open-end real estate lines of credit in 2016.
Those credit unions granted $4.4 billion of credit unions’ $21.5 billion in HELOCs last year. They represented 23% of the nation’s $1.3 billion in credit union assets and 108 million members as of Dec. 31.
The rule will still apply to about 238 credit unions — those granting 500 or more HELOCs in 2016. The credit unions that still will have to report represent about 48% of assets and 42% of members.
Last year there were 1,942 credit unions with fewer than 100 HELOCs, and 3,249 credit unions that did not grant HELOCs.
