Mellin comments on CFPB’s HMDA proposal, ANPR

Bill Mellin-90-4x5
William J. Mellin

New York Credit Union Association President/CEO William J. Mellin recently submitted a letter to the CFPB commenting on a proposal to raise the Home Mortgage Disclosure Act compliance threshold, and an Advanced Notice of Proposed Rulemaking examining a reduction in the number of discretionary data points that the CFPB requires mortgage lenders to collect.


Mellin’s comments were based on credit union feedback and information collected through an Association survey.

“Policymakers and regulators have consistently noted that credit unions did not cause the mortgage meltdown,” he wrote. “Unfortunately, the same regulators continue to impose regulations placing heavy burdens on small to midsized financial institutions, making it less likely that they will have the ability to offer mortgages in the future. No single regulation better exemplifies this dichotomy than HMDA.”

Notably, Mellin said there was support among member credit unions for eliminating almost all of the discretionary data points mandated by the CFPB, explaining some of the existing regulatory requirements make it more difficult to provide housing loans to the people most in need of accessing them.

Specifically, Mellin noted the increased reporting requirements for manufactured home property mortgages and multifamily affordable units, while well-intentioned, were actually harmful to low-income borrowers.

“These are just two examples of how, by adding to the aggregate weight of regulatory compliance, well-intended mandates for credit unions can easily result in harm to low-income borrowers,” he wrote.

Mellin questioned whether many of the data points introduced by the CFPB go beyond what is necessary to ensure HMDA compliance, and said the regulation had been “extended beyond recognition.”

“The purpose of HMDA is to identify discriminatory lending practices and trends,” wrote Mellin. “In contrast, the data points mandated by the CFPB transformed Regulation C into a mechanism for regulators and potential litigants to assess individual lending decisions on a granular level.”

Finally, Mellin suggested raising the HMDA reporting threshold to institutions that have originated 100 or more closed end mortgage loans in either of the two preceding calendar years, and said the temporary threshold of 500 closed end loans should be made permanent.

He concluded: “For too long, credit unions have been made to suffer the consequences of conduct by larger financial institutions. These regulations are a welcomed recognition that the industry and other small lenders need greater relief. We applaud the willingness of the CFPB to reexamine its previous rulemaking and urge the Bureau to use the power granted to it by Congress to categorically exempt the credit union industry from other troublesome mandates.”

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