Am I Partially Exempt?
By: Greggory B. Oberg, Esq.
When it comes to HMDA, we’ve had a bumpy few years. Not 2020 bumpy, but a fair amount of change occurred. So much so that it seems people were exhausted by mid 2018 when the partial exemption was declared as part of EGRRCPA.
Below is a quick refresher on everything you need to know.
What is the Partial Exemption?
HMDA ballooned to 120 data fields at the start of 2018. We all trained and adapted. And then we got EGRRCPA in May 2018 that rolled back certain elements of the HMDA Rule for small-volume lenders—the “partial exemption.” The CFPB followed up an interpretive rule in September of 2018.
Briefly, as described in the Rule: non-exempt institutions generally report all 120 data fields, partially exempt institutions essentially revert back to pre-2018 reporting.
Who Qualifies for the Partial Exemption?
First thing to note is the partial exemption is determined independently for Closed-End and Open-End transactions on the basis of the prior two years origination volumes.
If <500 Closed-End loans in each of the past two years, then the institution has the option of reporting partially exempt fields.
If <500 Open-End loans in each of the past two years, then the institution has the option of reporting partially exempt fields.
What Fields are Impacted?
If an institution is partially exempt and chooses to report as such, the fields in the left column of the below chart should be reported as “Code 1111” for Exempt.
CFPB Interpretive Rule September 7, 2018 at page 18
When it comes to HMDA, we’ve had a bumpy few years. Not 2020 bumpy, but a fair amount of change occurred. So much so that it seems people were exhausted by mid 2018 when the partial exemption was declared as part of EGRRCPA.
Below is a quick refresher on everything you need to know.
What is the Partial Exemption?
HMDA ballooned to 120 data fields at the start of 2018. We all trained and adapted. And then we got EGRRCPA in May 2018 that rolled back certain elements of the HMDA Rule for small-volume lenders—the “partial exemption.” The CFPB followed up an interpretive rule in September of 2018.
Briefly, as described in the Rule: non-exempt institutions generally report all 120 data fields, partially exempt institutions essentially revert back to pre-2018 reporting.
Who Qualifies for the Partial Exemption?
First thing to note is the partial exemption is determined independently for Closed-End and Open-End transactions on the basis of the prior two years origination volumes.
If <500 Closed-End loans in each of the past two years, then the institution has the option of reporting partially exempt fields.
If <500 Open-End loans in each of the past two years, then the institution has the option of reporting partially exempt fields.
What Fields are Impacted?
If an institution is partially exempt and chooses to report as such, the fields in the left column of the below chart should be reported as “Code 1111” for Exempt.
CFPB Interpretive Rule September 7, 2018 at page 18
Why Does it Matter?
Numerous reasons. Most of which come down to time and money.
Remove error potential in complicated fields
e.g. Automated Underwriting System reporting can get complicated when multiple AUS and/or multiple runs of the same AUS are utilized.
Less data to scrub
SCA Analysts note that partially exempt files take substantially less time per file to review.
I could (and probably have in at least one blog) go on for days about the pros and cons here; but on balance my advice would be to utilize the partial exemption if you are eligible.