CFPB STANDS IN WAY OF SOLUTION TO HMDA REPORTING PROBLEM

Collection of 2017 HMDA data begins in less than two months. The Consumer Financial Protection Bureau announced last summer in its 2017 Filing Instructions Guide (FIG) that beginning with the HMDA data collected in 2017, filers will submit their HMDA data to the Consumer Financial Protection Bureau (CFPB) using a web interface referred to as the HMDA Platform. The HMDA Platform has not been released. That puts the industry in the awkward position of collecting 2017 HMDA data in January without knowledge of how that data will be submitted at year end.

Vendor-Supplied and Internal Solutions

HMDA filers, whether using a vendor-supplied solution or an internally developed solution, will interact directly with the HMDA Platform to file their HMDA data. The CFPB encourages HMDA filers that use vendor software or internally developed solutions to prepare their HMDA data for submission to contact their vendors or internal support staff to confirm that their software will format HMDA data collected in 2017 according to the requirements specified in Section 3 of the FIG. These include the creation of a pipe delimited text file to be uploaded to the HMDA Platform. Unfortuneately vendors and support staff cannot provide complete assurances about their future plans until the CFPB finally releases the HMDA Platform for testing.

FFIEC Solution

HMDA filers will interact directly with the HMDA Platform to file their HMDA data. The CFPB has announced that the free Data Entry Software (DES) currently provided by the FFIEC will no longer be available as a method of data entry or data submission.

Those financial institutions that currently use the DES for submission, will need a software solution to create an electronic file that can be submitted to the new HMDA Platform. The CFPB suggests several possible solutions to create the electronic file. For example:

  • A financial institution’s current Loan Origination Software (LOS) may meet this need. (Writers note: Check with your LOS vendor regarding the possibility of additional charges.)
  • Software commonly available on desktop computers such as Microsoft Access or Excel may also be used for data entry and formatting. (See Spreadsheet/Database Options below.)
  • In addition, the CFPB will publish a Microsoft Excel HMDA loan/application register (LAR) data entry formatting tool. This tool will help filers enter and format their HMDA data into a pipe delimited text file needed to submit the data to the CFPB’s HMDA Platform. According to the CFPB this tool will be available for filers in early January 2017.

All of these suggestions may work, but until the HMDA platform is available for testing, it is not possible to confirm that any of these solutions will work.

Spreadsheet/Database Options

With some minor adjustments it appears that some spreadsheet and database products such as Microsoft Access or Excel may also be used for data entry and formatting. The current FFIEC DES allows data to be exported in a comma separated value (CSV), which is not compatible with the HMDA Platform. Once loaded into Access or Excel the data can be exported in a pipe delimited format, which is compatible with the HMDA Platform.

In Windows 7, the following steps change the delimiter setting:

  1. Make sure Access or Excel is closed.
  2. Navigate to the control panel.
  3. Select ‘Region and Language’
  4. Click the ‘Additional Settings’ button.
  5. Find the List separator and change it from a comma to your preferred delimiter such as a pipe (|).
  6. Click OK.
  7. Click OK.

Similar steps should work in other versions of Windows.

Conclusion

When regulators, including the CFPB, encounter problem situations in a financial institution they are reluctant to drop the issue based on promises of future corrective action. So surely they will understand the reluctance of the banking industry to accept their promises that everything will be fine once the HMDA Platform is available in early January. We will believe it when we see it.

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