Lenders have been troubled by the Home Mortgage Disclosure Act (HMDA) data points for many years, but they may see some relief in the near future.
The Consumer Financial Protection Bureau (CFPB) is requesting public comments on the resubmission of mortgage lending data reported under HMDA, which was finalized October 2015.
“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 Richard Cordray, CFPB Director. “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 was enacted in 1975 and require lenders to report information about their home loan applications or originations, the CFPB stated. The public and regulators take this information and use it 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 CFPB stated that the recent finalization in October 2015 of the rule was done “to improve information reported about the residential mortgage market” and added more data points for financial institutions. This led the CFPB to believe that the current resubmission guidelines may need to be updated.
Stakeholders are questioning if the CFPB plans to 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.
“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,” the CFPB explained.
The CFPB is seeking 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 CFPB's Request for Information will be open for 60 days after publication in the Federal Register.
Click here to view regulatory implementation resources.
Click here to view the Request for Information.