HMDA Partial Exemption: Who Qualifies and What’s Excluded

The HMDA partial exemption lets a qualifying insured depository institution or insured credit union skip 26 of the 48 data points that Regulation C would otherwise require it to collect and report on its mortgage activity, leaving a core set of 22 data points still to be filed. It was created by the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 and is aimed at smaller lenders whose origination volume stays under 500 loans a year.

Who Qualifies

Two conditions have to be met, and a third condition rules out a category of lender entirely.

First, the institution must be an insured depository institution or an insured credit union. Non-depository mortgage lenders do not qualify at any size.

Second, the loan-volume test. An institution qualifies for the closed-end partial exemption if it originated fewer than 500 closed-end mortgage loans in each of the two preceding calendar years. It qualifies for the open-end partial exemption if it originated fewer than 500 open-end lines of credit in each of the two preceding calendar years.¹ The two tests run independently. A community bank that originates 300 closed-end mortgages but 600 HELOCs qualifies for the closed-end partial exemption and has to report the full 48 data points for its open-end activity. Only loans that are otherwise reportable under HMDA count toward the 500 threshold; transactions excluded under § 1003.3(c) do not.

Third, for insured depository institutions, Community Reinvestment Act performance matters. The partial exemption is lost if, as of the preceding December 31, the institution had received either:

“Needs to improve” ratings on both of its two most recent CRA exams, or
A “substantial noncompliance” rating on its most recent CRA exam.

A single “needs to improve” rating is not disqualifying on its own; both of the two most recent exams must carry it. A single “substantial noncompliance” rating is disqualifying regardless of earlier ratings. The check runs as of December 31 of the year before the reporting year: for 2026 data, the institution looks at its CRA ratings as of December 31, 2025.² Credit unions are not subject to CRA exams and so are not affected by this condition.

One boundary worth being direct about: this is not the same as being exempt from HMDA. Institutions with total assets at or below the annual asset-size threshold ($59 million as of December 31, 2025 for 2026 data collection) are fully exempt and report nothing.³ The partial exemption sits above that line: the institution is covered by HMDA but files a shorter dataset.

What Drops Off, and What You Still Report

The 26 fields Regulation C treats as optional for partially exempt transactions are the ones that tend to require the heaviest integration with loan origination systems, pricing engines, and automated underwriting.⁴ They fall into a few buckets:

Loan identifier and property address (Universal Loan Identifier; street address, city, ZIP)
Pricing and cost data (rate spread, total loan costs or points and fees, origination charges, discount points, lender credits, interest rate)
Loan structure details (loan term, prepayment penalty term, introductory rate period, non-amortizing features)
Underwriting metrics (debt-to-income ratio, combined loan-to-value ratio, credit score, reasons for denial, automated underwriting system used and its result)
Property and purpose characteristics (property value, manufactured home fields, multifamily affordable units, reverse mortgage flag, open-end flag, business or commercial purpose flag)
Origination channel (application channel and mortgage loan originator identifier)

The 22 data points that remain required cover the basics needed for fair-lending analysis:

Loan information: application date, loan type, loan purpose, preapproval status, construction method, occupancy type, loan amount, action taken, action taken date, HOEPA status, lien status, type of purchaser, and number of units.
Property location: state, county, and census tract. The full street address is excluded, but geographic identifiers down to the census tract are still required.
Applicant demographics: race, ethnicity, sex, age, and gross annual income.
Institutional identifier: Legal Entity Identifier (LEI).

One field to watch: while the ULI drops off the required list, every loan still needs an identifier. A partially exempt institution that does not report a ULI must instead assign a non-universal loan identifier (NULI). The NULI can be up to 22 characters of letters, numerals, or a combination, must be unique within the institution’s annual submission, and cannot contain any information that could directly identify the applicant, such as names, Social Security numbers, or dates of birth.²

Reassessing Eligibility Each Year

The partial exemption is not permanent. Every year, the institution has to recheck its origination counts for the two preceding calendar years. For 2026 data collection, that means looking at 2024 and 2025 originations. Cross 500 in either year and the closed-end partial exemption goes away for 2026; the same logic applies to the open-end side.

Two mechanics affect how those counts are built. When two institutions merge, the surviving entity calculates the loan-volume threshold using the combined originations of all merged or acquired institutions and branches. If Institution A originated 350 closed-end loans and acquires Institution B with 200, the surviving entity counts 550 combined for that year and falls out of the closed-end partial exemption.⁵ Separate affiliates that were not part of a merger do not roll up into the parent’s count.

When multiple institutions touch a single loan, only one counts as the originator under Regulation C, and only that institution counts the loan toward its 500-loan threshold.⁶ Purchased loans and brokered loans handled by other institutions do not inflate the count for an institution that did not originate them.

Voluntarily Reporting the Excluded Fields

Nothing stops a qualifying institution from reporting any of the 26 excluded data points anyway. The catch is an all-or-nothing rule at the data-point level: if a data point consists of multiple fields, all fields have to be reported if any one of them is.⁴

Property address is the clearest example. Report the street for a partially exempt loan and city, state, and ZIP have to come with it. Credit score works the same way (the score and the scoring model used), and so does automated underwriting system (the system name and the result). Institutions whose systems already capture the fuller dataset often just continue reporting all 48 data points for consistency.

Losing the Exemption

Two things end the partial exemption. The first is crossing the loan-volume threshold. Because the look-back covers two years, going over 500 in a single year is enough to trigger full reporting the following year. There is no grace period. A community bank that originated 400 closed-end mortgages in 2024 and 520 in 2025 has to report the full 48 data points for all closed-end transactions in 2026.⁶

The second is a CRA downgrade. A “substantial noncompliance” rating on the most recent CRA exam strips the partial exemption for the reporting year following the December 31 evaluation date.² If the disqualifying rating is issued after the December 31 evaluation date, the partial exemption still applies for the current reporting year.

What Happens If You Get It Wrong

Claiming the partial exemption when the institution does not qualify, or submitting incomplete data, is a Regulation C violation. In an examination, regulators test a sample of transactions against the institution’s HMDA submission. If errors in any data field meet or exceed the resubmission threshold, examiners can direct the institution to correct its loan application register and resubmit the entire file. Even below that threshold, resubmission can be ordered if examiners reasonably believe the errors make the data unreliable for analysis.⁷

Beyond data correction, examiners can require the institution to update policies, procedures, and internal audit processes. Regulation C violations are also subject to administrative sanctions, including civil money penalties. An error is not treated as a violation if it was unintentional and the institution maintained procedures reasonably designed to avoid it.⁷ That standard is what makes documented compliance procedures the practical dividing line between an examination finding that can be corrected and one that turns into a formal violation.

1
eCFR. 12 CFR 1003.3 – Exempt Institutions and Excluded and Partially Exempt Transactions
2
eCFR. 12 CFR Part 1003 – Home Mortgage Disclosure (Regulation C)
3
Federal Register. Home Mortgage Disclosure (Regulation C) Adjustment to Asset-Size Exemption Threshold
4
Bureau of Consumer Financial Protection. Partial Exemptions from the Requirements of the Home Mortgage Disclosure Act under the Economic Growth, Regulatory Relief, and Consumer Protection Act (Regulation C)
5
Federal Register. Home Mortgage Disclosure (Regulation C)
6
FFIEC. A Guide to HMDA Reporting Getting It Right 2024 Edition
7
Consumer Financial Protection Bureau. Interagency Consumer Laws and Regulations HMDA Examination Procedures