The OMB’s changes will also have possible effects on bank and thrift compliance with the Community Reinvestment Act (CRA) in the drawing of institutional CRA “assessment areas.” These latest changes were effective when issued by OMB — July 21, 2023 — so they can impact 2024 HMDA coverage. OMB Action The OMB completed a process of delineating Core Based Statistical Areas (CBSAs) based on 2020 Census data and the American Community Survey and Census Population Estimates Program for 2020 and 2021. A CBSA is a geographic entity associated with at least one core of 10,000 or more population, plus adjacent territory that has a high degree of social and economic integration with the core as measured by commuting ties. The standards designate and delineate two categories of CBSAs: Metropolitan Statistical Areas and Micropolitan Statistical Areas. The general concept of a metropolitan statistical area is that of an area containing a large population nucleus and adjacent communities that have a high degree of integration with that nucleus. The concept of a micropolitan statistical area closely parallels that of the metropolitan statistical area, but a micropolitan statistical area features a smaller nucleus. The purpose of these statistical areas is unchanged from when metropolitan areas were first delineated: The classification provides a nationally consistent set of delineations for collecting, tabulating and publishing federal statistics for geographic areas. The new delineations are found in OMB Bulletin 23-01 by scanning the QR code. https://www.whitehouse.gov/wp-content/ uploads/2023/07/OMB-Bulletin-23-01.pdf HMDA Coverage Regulation C covers any “financial institution,” as defined by the regulation and its underlying HMDA statute. “Financial institution” means, in part, a bank, savings association or credit union that: • On the preceding Dec. 31, had assets in excess of the asset threshold established and published annually by the CFPB for coverage by HMDA, based on the yearto-year change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers, not seasonally adjusted, for each 12-month period ending in November, rounded to the nearest million — $56 million for 2024 HMDA coverage. • On the preceding Dec. 31, had a home or branch office in a Metropolitan Statistical Area (MSA). [Micropolitan Statistical Areas have no HMDA impact.] • In the preceding calendar year, originated at least one home purchase loan (excluding temporary financing such as a construction loan) or refinancing of a home purchase loan, secured by a first lien on a one- to fourfamily dwelling. • Meets one or more of the following two criteria: is federally insured or regulated; or the mortgage loan referred to in the previous bullet was insured, guaranteed or supplemented by a federal agency or was intended for sale to Fannie Mae or Freddie Mac. • Meets at least one of the following criteria in each of the two preceding calendar years: originated at least 25 closed-end mortgage loans that are not excluded by §1003.3(c)(1) through (10) or (c)(13), or originated at least 200 open-end lines of credit that are not excluded by the cited section of Regulation C. There are also similar qualification criteria for for-profit mortgage lenders that are not banks, thrifts or credit unions, which we will not detail here. The qualification criterion impacted by OMB’s action is the geographic one, the second bullet above. If a financial institution that otherwise meets HMDA coverage criteria has an office in an MSA on Dec. 31, then it is covered by HMDA for the following year. For many lenders, determining HMDA coverage is a one-time exercise (other than those who are right around the asset-size threshold). HMDA Impact In 2023, there was no impact on HMDA reporting because the new MSA delineations were not in effect on Dec. 31, 2022. However, they were in effect Dec. 31, 2023. If your institution has an office in any of the counties affected by the MSA changes, be sure to review how this action affects your HMDA compliance in 2024. CRA Impact MSAs affect the CRA compliance efforts of banks and thrifts, too. They come into play in drawing up an institution’s CRA assessment area (AA), as well as in the small business and small farm lending disclosure statements prepared by regulators annually for NEBRASKA INDEPENDENT BANKER 9
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