HMDA Compliance News
February 18, 2015, the Federal Financial Institutions Examination Council (FFIEC) published the January 2015 HMDA-CRA Newsletter. Earlier this month on February 9th, the FFIEC’s HMDA site updated the Geocoding System with the 2015 Census boundary definitions.
Exemption threshold
As announced by the CFPB on December 29, 2014, the 2015 exemption threshold for depository institutions was changed to $44 million. Thus, depository institutions with assets of $44 million or less as of 12/31/2014 are exempt from
2015 data collection. The exemption thresholds for non-depository institutions have not changed.
HOEPA Changes and New Edit Changes
New changes to Regulation Z took effect on January 10, 2014, expanding HOEPA (Home Ownership and Equity Protection Act of 1994) coverage. Part of these changes not only lowered the rate spread threshold of HOEPA eligible loans, but also expanded coverage to certain home purchase mortgage products. Some of the home purchase products applicable to the expanded HOEPA coverage are reportable as home purchase loans under Regulation C. Beginning with the collection and reporting of calendar year 2014 HMDA data, mortgage lenders must report a home purchase loan as a HOEPA loan. This was not required in previous years. The formula for the calculation of the rate spread itself remains unchanged for HMDA.
Calendar Year Submission Deadline
The annual reporting deadline of March 1st occurs on a Sunday in 2015. Therefore, the deadline for submitting an initial calendar year 2014 CRA and HMDA data file will be the next business day, Monday, March 2, 2015. Initial submissions sent subsequent to 11:59 p.m. EST on Monday, March 2, 2015, will be considered late.
CRA & HMDA Operations’ Services
The Federal Reserve Board’s CRA & HMDA Operations unit, on behalf of the Federal Financial Institution Examination Counsel (FFIEC), provides many services to aid respondents in efficiently submitting error-free data. The flagship tools for submitting data are the FFIEC CRA & HMDA Data Entry Software (DES) applications. The CRA & HMDA DES products are made available to the public at no cost. Semiannual updates are released to keep the products current and up-to-date with regulatory, census, or any other changes.
Submission Errors – Invalid File Format or Timestamp
An invalid file format commonly results from using a third-party software application. Commercial products may not be updated with the FFIEC HMDA file specifications which are necessary to submit a valid .DAT file. Additionally, a valid .DAT file is necessary to successfully import the data file into the DES. After importing the .DAT file into the DES, a Batch Edit must be performed to ensure a valid encrypted file is created for submission. Additionally, the Batch Edit will provide documentation about syntactical and validity errors that must be corrected prior to transmitting the file for submission. Once the data file is free of validity and syntactical errors, transmit the data file from the DES using the Export option, Submission via Web.
All data is processed through the FFIEC data processing system and then posted to the HMDA Database. This process records the date and time of each incoming data file; only one data file per year per respondent post daily. Furthermore, the data file itself contains an internal timestamp. If a resubmission is received that contains a timestamp of the same date or is earlier than the prior internal timestamp of the successfully posted file, the file will result in an invalid timestamp error.
An invalid timestamp error frequently occurs if a Batch Edit was not performed prior to transmission of the data file or if a prior encrypted file is accidentally attached to an e-mail instead of the revised file. To avoid invalid timestamp errors, run the Batch Edit after revisions and then submit the revised data file using the Export option, Submission via Web.
Lastly, although not common, an invalid timestamp error can also occur if the timestamp is not in the correct format for any record submitted in the data file. All record types should be in century, year, month, day, hour, and minute format (ccyymmddhhmm). Using a data file that does not follow FFIEC HMDA file specifications will cause this particular timestamp error. For more details regarding file specification guidelines, submissions, and FAQs, visit the webpages listed under the FFIEC Reporting Resources.
Secured E-Mails
A significant number of secure messages are received via CRAHELP@frb.gov, CRASUB@frb.gov, HMDAHELP@frb.gov, and HMDASUB@frb.gov. These e-mail accounts are unable to accept encrypted e-mails. To avoid delays in either receiving a response from CRAHELP@frb.gov and HMDAHELP@frb.gov or in processing CRA and HMDA data submissions via CRASUB@frb.gov and HMDASUB@frb.gov, institutions should send only unsecure e-mail messages to these e-mail addresses. Any data file submissions sent as a secure message cannot be processed, and will be considered non- compliant.
Missing and Overdue Edit Reports
As soon as an institution’s data file is posted to the FFIEC Database, an edit report will be sent to the e-mail address provided on the lender’s Transmittal Sheet (TS). The lender has seven days to return the completed edit report. Return information is included on the confirmation sheet. Additionally, lenders may e-mail a scanned copy of the completed CRA or HMDA edit reports to CRAHELP@ frb.gov or HMDAHELP@frb.gov, respectively. Upon the FFIEC’s successful receipt of the edit report, it is reviewed and tracked in the appropriate Data Processing System (DPS). An e-mail confirming the submission status will be sent to the institution.
If a lender does not receive an edit report within 24 hours after transmitting the data file to the FFIEC, then contact CRA or HMDA Help at CRAHELP@frb.gov or HMDAHELP@ frb.gov, respectively. In the subject line of the e-mail, lenders must type “Awaiting Edit Report” along with their respondent ID number, agency code, and institution name. In the body of the message responders must provide the day the data was transmitted to the FFIEC and by what means, i.e., via e-mail or using Submission via Web.
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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