With amendments to the Home Mortgage Disclosure Act set to take effect at the start of 2018, the Consumer Financial Protection Bureau announced that it will take a lenient approach to enforcement so as to allow financial institutions to get used to the new provisions.
“For HMDA data collected in 2018 and reported in 2019, the bureau does not intend to require data resubmission unless data errors are material. Furthermore, the bureau does not intend to assess penalties with respect to errors in data collected in 2018 and reported in 2019,” according to a statement from the CFPB. “Collection and submission of the 2018 HMDA data will provide financial institutions an opportunity to identify any gaps in their implementation of amended Regulation C and make improvements in their HMDA compliance management systems for future years.”
First enacted in 1975, HMDA requires certain financial institutions to provide mortgage data to the public. When Congress passed the Dodd-Frank Act in 2010 and created the CFPB, the bill directed the CFPB to expand the HMDA data set. The amendments were passed in late 2015, but have faced scrutiny from financial institutions worried about the regulatory burden and, as a result, have been revised several times.
The CFPB in August made a favorable change increasing the reporting threshold on home equity lines of credit.
The final rule would have required financial institutions that issue 100 HELOCs or more in each of the last two years to report data, a threshold that many small banks and credit unions considered too low and quite burdensome. Now, only financial institutions that originate 500 loans through calendar years 2018 and 2019 must report HELOC data.
The CFPB statement also said any examinations of 2018 HMDA data will be diagnostic, to help institutions identify compliance weaknesses and will credit good faith compliance efforts.
The CFPB intends to engage in a rule-making to reconsider various aspects of the 2015 HMDA Rule, such as the institutional and transactional coverage tests and the rule’s discretionary data points.
For data collected in 2017, financial institutions will submit their reports in 2018 in accordance with the current Regulation C using the Bureau’s HMDA Platform.
