KENNEWICK, Wash. — A coalition of small credit unions is urging the Consumer Financial Protection Bureau to ease mortgage data reporting requirements, arguing the rules are disproportionately burdening smaller institutions and limiting access to home lending in underserved communities.
In a March 27 letter to CFPB Acting Director Russell Vought, the Endangered Small Credit Union Defense (ESCUD) said the bureau should use its existing authority under the Home Mortgage Disclosure Act and Regulation C to provide targeted relief for credit unions with less than $500 million in assets.
ESCUD, which represents 30 small credit unions serving more than 100,000 members and holding roughly $1 billion in combined assets, said most of its members operate with fewer than a dozen employees and face outsized compliance costs tied to HMDA reporting.
The group pointed to Section 3 of President Donald Trump’s March 13 executive order, “Promoting Access to Mortgage Credit,” which directs the CFPB to consider changes to Regulation C, including raising exemption thresholds and reducing reporting burdens for smaller lenders.
Congressional Action Not Needed
According to ESCUD, the CFPB has authority to make such changes without congressional action and has previously adjusted HMDA thresholds through rulemaking, including updates finalized in 2015 and subsequent revisions in 2019, 2020 and January 2026.
The letter cited cost data from Tri-Cities Community Federal Credit Union, where ESCUD President Doug Wadsworth said the institution processes about 189 mortgage and home-equity applications annually but funds only 70 loans. HMDA compliance costs the credit union approximately $6,650 per year and 95 staff hours, which could at some small credit unions represent as much as 5% to 10% of annual net income, according to the letter.
ESCUD also referenced survey results from small credit union CEOs indicating that 67% view HMDA compliance as a “significant burden,” while none described it as easy or inexpensive. Half of respondents said they would consider capping mortgage lending below regulatory thresholds to avoid reporting requirements, a move the group said could reduce access to credit in local communities.
Form of Discouragement
The coalition argued that smaller credit unions often serve minority and underserved borrowers at higher approval rates than larger institutions, and that current compliance costs may discourage such lending activity.
To address the issue, ESCUD recommended several regulatory changes, including raising the loan-volume reporting threshold to 200 loans annually, increasing the asset-size exemption threshold to $250 million, or limiting reporting requirements to first mortgages while excluding smaller home-equity loans.
The group said it is prepared to provide additional data to the CFPB and meet with agency staff to discuss the proposals, adding that regulatory relief would support lending in rural and underserved areas.
