Should Small Banks Originating Less Than 500 Mortgages Per Year be Exempt From Statistical Reporting Rules? (H.R. 2954)
Do you support or oppose this bill?
What is H.R. 2954?
(Updated May 24, 2018)
This bill would exempt financial institutions that originate less than 500 closed-end mortgage loans or less than 500 open-end lines of credit annually from recordkeeping and disclosure requirements under the Home Mortgage Disclosure Act (HMDA). Currently, institutions are required to periodically report to financial regulators about the number and dollar value of closed-end mortgages and open-end lines of credit originated or purchased each year.
Argument in favor
The recordkeeping and reporting requirements for small banks with a relatively small number of mortgages or lines of credit on their books are too onerous, this would help such institutions continue providing access to home loans.
Argument opposed
The Home Mortgage Disclosure Act’s recordkeeping and reporting requirements are in place for a reason — to better understand lending patterns and prevent discriminatory lending. No firm, however small, should be exempt from them.
Impact
Financial institutions that originate less than 500 closed-end mortgages or purchase less than 500 open-end lines of credit annually; their current and prospective customers; and financial regulators.
Cost of H.R. 2954
The CBO estimates that enacting this bill would cost $1 million over the 2018-2027 period.
Additional Info
In-Depth: Sponsoring Rep. Jeb Hensarling (R-TX) introduced this bill to provide “much needed regulatory relief for smaller institutions” because “the cost of compliance for HMDA is so great that many small banks are considering whether to abandon the mortgage business all-together.”
House Democrats expressed opposition to this bill, saying it “would harm efforts to identify and stop discriminatory lending and violations of fair housing laws, as well as the ability to understand lending patterns and trends.”
This legislation passed the House Financial Services Committee on a vote of 36-24 and has the support of seven cosponsors in the House, all of whom are Republicans.
Media:
- House Financial Services Committee Press Release
- CBO Cost Estimate
- Credit Union National Association (In Favor)
Summary by Eric Revell
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