Banking agencies propose changes to CRA definitions

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WASHINGTON — The three federal prudential bank regulators on Wednesday proposed revising certain definitions in Community Reinvestment Act regulations to stay aligned with a recent rule from the Consumer Financial Protection Bureau.

Under the proposal, the Federal Deposit Insurance Corp, Office of the Comptroller of the Currency and Federal Reserve Board would update definitions of terms such as "home mortgage loan" and "consumer loan" to be consistent with new requirements implemented by the CFPB under the Home Mortgage Disclosure Act. The HMDA changes go into effect in January 2018.

Since 1995, the agencies “have conformed certain definitions in their respective CRA regulations to the scope of loans" used for HMDA "and believe that continuing to do so produces a less-burdensome CRA performance evaluation process,” the three regulators said in a press release.

Under the new CFPB rule, most consumer-facing mortgage transactions must be reported under HMDA, as long as they are collateralized with a home. Unsecured home improvement loans, however, would not be subject to such reporting requirements.

The draft proposal released Wednesday would also make technical changes and remove outdated references to the Neighborhood Stabilization Program.

The agencies said they expect the proposed CRA changes to go into effect in January. The public will have 30 days to comment on the proposals.

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