CFPB Seeks Public Input on HMDA Resubmission Guidelines
On January 7, 2016, the Consumer Financial Protection Bureau (CFPB) announced it is seeking public feedback on the resubmission of mortgage lending data reported under the Home Mortgage Disclosure Act (HMDA). The CFPB press release is reproduced in this newsletter.
Please refer to the Compliance Monitor article dated October 21, 2015 announcing the new HMDA regulations described below.
In October 2015 the Bureau finalized a rule updating the reporting requirements of the HMDA regulation, to improve information reported about the residential mortgage market. Given these changes, the current resubmission guidelines may need to be updated, and the Bureau is seeking feedback on what modifications may be appropriate.
“The Home Mortgage Disclosure Act is a valuable asset in helping detect trends and problem areas in the nation’s mortgage market, and the recent improvements to the rule will foster better understanding of that market,” said CFPB Director Richard Cordray. “With today’s request for information we are seeking feedback from stakeholders on how best to ensure the accuracy and reliability of mortgage lending information.”
HMDA, which was originally enacted in 1975, requires many lenders to report information about the home loans for which they receive applications or that they originate or purchase. The public and regulators can use the information to monitor whether financial institutions are serving the housing needs of their communities, to assist in distributing public-sector investment so as to attract private investment to areas where it is needed, and to identify possible discriminatory lending patterns.
The rule finalized in October increases the number of data points that financial institutions are required to report to federal regulators, to include new information such as property value, the term of the loan, and the duration of any teaser or introductory interest rates. Under the final rule, lenders will collect the new information beginning in 2018 and report it to federal regulators by March 1, 2019.
Ensuring the accuracy of mortgage lending data is vital to carrying out the purposes of the law. Like other federal agencies, and some state regulators, the Bureau conducts examinations to verify the accuracy of reported mortgage lending data and provides resubmission guidelines that describe when supervised institutions will be expected to correct and resubmit data.
Some stakeholders have asked whether the Bureau would adjust its mortgage lending data resubmission guidelines to reflect the expanded data that will be submitted under the new rules. The Bureau is seeking public feedback on what changes to its resubmission guidelines may be needed for data submitted under the new rules.
Specifically, the Bureau’s notice published today asks for public comment on the Bureau’s use of resubmission error thresholds and how they should be calculated. The notice also invites comments on whether the thresholds should vary with the size of the submission or kind of data, as well as the consequences for exceeding a threshold. Other topics addressed in the notice include how the Bureau conducts its mortgage lending data integrity reviews and any technological or other changes that might be made to the data editing and collection process to help reduce errors.
The Bureau continues to look for ways to help the mortgage industry implement the new mortgage lending data reporting rules, and has created regulatory implementation resources available online. These resources include an overview of the final rule, a plain-language compliance guide, a timeline with various effective dates, a decision tree to help institutions determine whether they need to report mortgage lending data, a chart that provides a summary of the reportable data, and a chart that describes when to report data as not applicable.
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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