New requirements for reporting loan activity under the Home Mortgage Disclosure Act have been somewhat relaxed by the Consumer Financial Protection Bureau.
The Dodd-Frank Wall Street Reform and Consumer Protection Act required the bureau to expand HMDA data collected and reported such as underwriting and pricing. It also authorized the bureau to require other data.
Technical corrections were outlined in a CFPB final rule issued in August. The rule also clarified reporting requirements and increased the threshold for collecting and reporting data on home-equity lines of credit for two years.
Beginning with loan applications taken in 2017 and reported in 2018, financial institutions will
be required to submit the expanded HMDA data using a new CFPB online platform.
In a notice issued on Thursday, the regulator said that it doesn’t intend to require
financial institutions to resubmit data unless data errors are material or to pay penalties with respect to data errors.
“Accordingly, collection and submission of the 2018 HMDA data will provide financial institutions an opportunity to focus on identifying any gaps in their implementation of the additional requirements and making improvements in their HMDA compliance management systems for future years,” the notice stated. “The bureau expects that any supervisory examinations of 2018 HMDA data will be diagnostic, to help institutions identify compliance weaknesses, and will credit good-faith compliance efforts.”
The CFPB noted that it plans to use the rulemaking process to
reconsider various aspects of the 2015 HMDA rule. This includes institutional and transactional coverage tests and the rule’s discretionary data points.
“More specifically, the rulemaking may re-examine lending-activity criteria that determine whether institutions are required to report mortgage data,” the statement said. “The rulemaking may also look at adjusting the new requirements to report certain types of transactions. Finally, the rulemaking may re-assess the additional information that the rule requires beyond the new data points specified under the Dodd-Frank act.”
A written statement from Independent Community Bankers of America President and Chief Executive Officer Camden R. Fine said the trade group strongly supports the CFBP’s announcement and welcomes the planned rulemaking.
Fine said the trade group has been asking the CFPB and Congress to delay HMDA implementation and increase the reporting threshold to 1,000 closed-end mortgages and 2,000 HELOCs.
“As the CFPB acknowledged in its statement, new HMDA regulations scheduled to take effect on Jan. 1 pose significant systems and operational challenges for financial institutions and third-party vendors,” Fine stated. “Left unaddressed, these mandatory reporting requirements would divert critical community bank resources that would otherwise be used to serve American consumers while posing privacy concerns for borrowers.”
