Regulation C - Home Mortgage Disclosure
December 22, 2000
Circular No. 11298

Comments Requested on Proposed Revisions by March 9

To All Depository Institutions and Others Concerned in the Second Federal Reserve District:

The following is a statement issued November 29 by the Board of Governors:

The Federal Reserve Board today requested comment on proposed revisions to its Regulation C, which implements the Home Mortgage Disclosure Act (HMDA). Comment is requested by March 9, 2001.

HMDA requires depository and certain for-profit, nondepository institutions to collect, report, and disclose data about applications for, and originations and purchases of, home mortgage and home improvement loans. Data reported include the type, purpose, and amount of the loan; the race or national origin, gender, and income of the loan applicant; and the location of the property. The purposes of HMDA include helping determine whether financial institutions are serving the housing needs of their communities and assisting in fair lending enforcement.

The Board's proposal incorporates suggestions received in response to an Advance Notice of Proposed Rulemaking published in 1998 [see FRBNY Circular No. 11038], as well as from discussions with a wide range of interested parties, including industry and consumer representatives and officials of financial regulatory and fair lending enforcement agencies. Other suggestions were presented at hearings held in Charlotte, Boston, Chicago, and San Francisco last summer on possible changes in the enforcement of the Home Ownership and Equity Protection Act (HOEPA).

In evaluating potential changes to the HMDA reporting requirements, the Board considered whether the changes would improve the quality and utility of the resulting data. The Board took into account changes in the home mortgage market, including growth in areas such as home equity lines of credit and subprime lending. The objective of the proposed changes is to enhance the public's and agencies' understanding of the home mortgage market generally, and the subprime market in particular, as well as to further fair lending analysis. At the same time, the Board has attempted to minimize the increase in the data collection and reporting burden by limiting proposed changes to those likely to have significant benefit.

The proposed changes to Regulation C would:

  • Expand coverage of nondepository lenders by adding a dollar-volume threshold of $50 million to the current loan-percentage test.
  • Simplify the definitions of "refinancing" and "home improvement loan" to generate more consistent and accurate data.
  • Require lenders to report home-equity lines of credit; such reporting is now optional.
  • Require lenders to report certain applications for credit received through preapproval programs.
  • Require lenders to report the annual percentage rate of the loan, whether the loan is subject to HOEPA, and whether the loan involves a manufactured home.

The Board also proposed a number of clarifying and technical changes, in addition to reorganizing Regulation C to make it easier to use.

The proposed revision of Regulation C (pdf - 471kb), was published in the Federal Register of December 15. Comments should be sent to the Board by March 9, 2001, as specified in the notice.