Yeah, if they aren't really careful, they are going to build a tangled enough web that the vendors will not be able to work it out to fit all.

Becca, I'm in the same boat as you. I'm close enough to 500 to feel very borderline on over/under.

They could make it like IS CRA and allow you to be Large if you want to !

And like RJ, it's annoying to mess with stuff after the fact. GEEZ!

We need to wait & see what the House of Rep's does with this before we can even begin to answer questions. Here's a link to a video blog I did on the Senate Bill:
https://www.bankerscompliance.com/hmda-drive-update/

As suggested above, this is an interesting development, but it is a total waste of time to dive into it in any detail because if anything final develops from it, it's likely to look very different from what you see here. No reason to have nightmares over stuff that might not ever happen.

Just got word that S2155 passed the US House!!!

The White House has indicated that the President will sign the bill before Memorial Day.

There's a lot to unpack in this Bill, and here are some things that I really like,

QM changes for community banks, which will essentially allow a portfolio loan to be QM, with some minor exceptions.

HMDA reporting threshold is 500 for Closed End and 500 for Open end each of the previous 2 years, unless you are "needs to improve" in CRA. I guess this is probably only for the new data points. We don't report, but I actually thought this was for any reporting at all.

Escrow requirements for community banks looks to have eased.

I will reserve the jumping up and down...I have a sinking feeling this is going to be a major cluster.

What escrow relief is being given? For us I don't see any change because we have always required an escrow for loans with PMI and flood insurance (before the flood amendments requiring escrows) so .35(b)(2)(iii)(D) disqualifies us for any relief if I'm reading this correctly.

SEC. 108. Escrow requirements relating to certain consumer credit transactions.

Section 129D of the Truth in Lending Act (15 U.S.C. 1639d) is amended—

“(2) TREATMENT OF LOANS HELD BY SMALLER INSTITUTIONS.—The Bureau shall, by regulation, exempt from the requirements of subsection (a) any loan made by an insured depository institution or an insured credit union secured by a first lien on the principal dwelling of a consumer if—

“(A) the insured depository institution or insured credit union has assets of $10,000,000,000 or less;

“(B) during the preceding calendar year, the insured depository institution or insured credit union and its affiliates originated 1,000 or fewer loans secured by a first lien on a principal dwelling; and

“(C) the transaction satisfies the criteria in sections 1026.35(b)(2)(iii)(A), 1026.35(b)(2)(iii)(D), and 1026.35(b)(2)(v) of title 12, Code of Federal Regulations, or any successor regulation.”;



.35(b)(2)(iii)(A) addresses making loans in rural or underserved areas.

.35(b)(2)(iii)(D) addresses the FI maintaining escrow accounts other than for HPMLs

.35(b)(2)(v) addresses the requirement to escrow for HPMLs

Dan - I so appreciate you inserting the specific text to the sections. For me who is not a CRCM (see user name :)) it can be challenging to follow regulations sometimes because they continually refer to this subsection or that subsection. By the time I have flipped back and forth between this and that paragraph and the lower case/capital letters, numbers vs roman numerals I am so lost that I forgot what I was trying to figure out! 3 hours have gone by and I haven't found the answer to my issue because I am lost in navigating through regulation sections/subsections. Thank you Dan!

Just finished analyzing that section (dissecting all of the references), and I agree, Dan - our bank also will not get the escrow relief since we escrowed for more than just HPML (voluntary escrows and various situations). I don't think we'll get to reap a lot of benefit from this Act on the compliance side of our bank, but we still see it as a positive change for the industry.

Some sections do not appear to have mandatory effective dates. When will the HMDA changes become effective?

It should be effective immediately, as it is now the law. However, I would suggest giving the CFPB a few days to give some guidance as to the next steps.

Is "a few days" defined in people years or dog years?

"Section 213 - Making Online Banking Initiation Legal and Easy" allows FIs to make a copy or receive an image of an individual's drivers license when opening an account online. Was this prohibited before? It also states that FIs must permanently delete the image after using it for online account opening. Why? Wouldn't we want to retain this information?

I too have a question regarding Section 213 and I seriously doubt how it makes opening products through an online service "easier."

My actual question is about the retention of a DL or ID scanned image. Am I correct in reading that once we've used as allowed, we must then delete the image forever?

My understanding is that you can image the ID, but if you make a copy, you must destroy it.

You might want to re-read that portion of the law:

(b) Use of a driver's license or personal identification card.—

(1) IN GENERAL.—When an individual initiates a request through an online service to open an account with a financial institution or obtain a financial product or service from a financial institution, the financial institution may record personal information from a scan of the driver’s license or personal identification card of the individual, or make a copy or receive an image of the driver’s license or personal identification card of the individual, and store or retain such information in any electronic format for the purposes described in paragraph (2).

(2) USES OF INFORMATION.—Except as required to comply with Federal bank secrecy laws, a financial institution may only use the information obtained under paragraph (1)—

(A) to verify the authenticity of the driver’s license or personal identification card;

(B) to verify the identity of the individual; and

(C) to comply with a legal requirement to record, retain, or transmit the personal information in connection with opening an account or obtaining a financial product or service.

(3) DELETION OF IMAGE.—A financial institution that makes a copy or receives an image of a driver’s license or personal identification card of an individual in accordance with paragraphs (1) and (2) shall, after using the image for the purposes described in paragraph (2), permanently delete—

(A) any image of the driver’s license or personal identification card, as applicable; and

(B) any copy of any such image.

This provision doesn't make it easier, it makes it more difficult.
We retain images from in branch account opening, so I expect my director to not be keen on this element.
Thank you.

RLCarey - paragraph 1 expressly states opened on-line or with an on-line service, and the section on deletion points right back to paragraph 1, so I interpret it to mean that I have to destroy any image made from an on-line account opening. If I'm correct, I'm a happy camper because we don't open account on-line (yet). Do you agree with my interpretation?

That is how I interpret it too, it is specific to accounts opened online. But that now means two separate archive process for my FI for what it is supposed to do with scanned DL's. One process for ID's received via Online services, and one for in-branch...not the end of the world, but...

Surely is not the least bit logical.

For argument sake, 2(B) indicates “to verify the identity of the individual” As the purpose of digital imaging the DL is used to help identify the transactor when and any time they do come in a branch, couldn’t you argue that you are keeping the info until the relationship is closed for the purpose of verifying the individuals identity throughout the relationship 2(B)? (3) Indicates it is to be destroyed only after the purpose of paragraph (2) is completed which again won’t be until the relationship is completed. Am I grasping here, or does this seem feasible?

You only verify the identity of a person once.

Does anyone know the effective date of this provision?

Presumably when the law was enacted, but there has been no word from the regulators.