CFPB ANNOUNCES HMDA FORBEARANCE

On December 21, 2017 the Consumer Financial Protection Bureau (CFPB) issued a public statement announcing that the CFPB:

  • Does not intend to require data resubmission unless data errors are material or assess penalties with respect to errors for data collected in 2018 and reported in 2019 under the Home Mortgage Disclosure Act (HMDA).
  • Intends to open a rulemaking to reconsider various aspects of the CFPB’s 2015 HMDA rule, such as the institutional and transactional coverage tests and the rule’s discretionary data points.

The CFPB’s position is that collection and submission of the 2018 HMDA data will provide financial institutions an opportunity to focus on identifying any gaps in their implementation of the additional requirements and making improvements in their HMDA compliance management systems for future years. The CFPB expects that any supervisory examinations of 2018 HMDA data will be diagnostic, to help institutions identify compliance weaknesses, and will credit good-faith compliance efforts.

The announcement also reminds HMDA reporters that beginning on January 1, 2018, financial institutions will submit HMDA data collected in 2017 and beyond using the CFPB’s new online platform.

Similar statements regarding HMDA implementation are being coordinated with the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the National Credit Union Administration.

Editorial comments:

  • The forbearance announcement should be well received by all HMDA-reporting institutions. The announcement of proposed changes in coverage and data collection is a mixed bag. If the coverage threshold for closed-end credit is increased as expected a significant number of institutions will no longer be covered by Regulation C (good news), institutions that remain within the scope of HMDA will collect data on fewer loans (more good news), but the value of the HMDA data will be diminished (bad news). Comparing data collected in 2018 with data collected in 2017 and prior years will be a challenge as a result of changes in the data collected (comparing apples and oranges). If further changes are made to the data collected in 2019 or subsequent years the ability to compare historical data will be further diminished.
  • It is not clear which one of the two Acting Directors of the CFPB is responsible for the public statement, although we suspect that it is Acting Director Mulvaney. Once the courts select the “real” Acting Director the public statement will be reaffirmed by Mr. Mulvaney or possibly revoked by Ms English..

A copy of the CFPB’s Statement is available at:  https://files.consumerfinance.gov/f/documents/cfpb_statement-with-respect-to-hmda-implementation_122017.pdf

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