Home >> Daily Dose >> CFPB Flags Lenders for Possible HMDA Violations
Print This Post Print This Post

CFPB Flags Lenders for Possible HMDA Violations

The Consumer Financial Protection Bureau (CFPB) has issued a letter of warning to 44 mortgage lenders and brokers that they may be in violation of the Home Mortgage Disclosure Act (HMDA).

HMDA, originally enacted in 1975, requires financial institutions to collect data related to mortgage lending activity such as home purchase loans, home improvement loans, refinancings they originate, purchase, or for which those institutions receive applications. HMDA’s goal is to monitor whether financial institutions are serving the needs of their communities, attract private investment, and identify possible discriminatory lending patterns.

Data collected as required by HMDA is reported to appropriate regulators annually and made available to the public, according to the CFPB.

The CFPB finalized a rule in October 2015 that updated the reporting requirements of HMDA to improve the quality and type of data that institutions are collecting. Most of the final rule’s provisions will go into effect on January 1, 2018.

“Financial institutions that fail to report mortgage information as required make it harder to identify and address discriminatory lending,” said CFPB Director Richard Cordray. “No mortgage lender that is required to report their loan data can avoid this responsibility.”

The CFPB identified the 44 companies to which it is warning of possible HMDA violations by reviewing available bank and non-bank mortgage data. The warning letters note that companies that meet certain requirements are subject to HMDA oversight, which means they are required to collect and report data on mortgage lending.

In the letter, the Bureau encourages the companies to review their practices to ensure they are complying with the law, and if they are not, to advise if they have taken or will take steps to become compliant. By sending the letters, the CFPB is not stating that a HMDA violation occurred.

Click here to view a sample of the warning letter issued by the CFPB.

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.
x

Check Also

Mnuchin, Calabria Discuss Housing Affordability and the GSEs

The Treasury Secretary joined FHFA’s Mark Calabria to testify before a House committee about the future of Fannie Mae and Freddie Mac, and what that means for American homeowners.

GET THE NEWS YOU NEED, WHEN YOU NEED IT.

With daily content from MReport, you’ll never miss another important headline in originations, lending, or servicing. Subscribe to MDaily to begin receiving a complimentary daily email containing the top mortgage news and market information.