HMDA CLARIFICATION

On April 13, 2017 the Consumer Financial Protection Bureau published 150-page proposed update to Regulation C. The changes should help financial institutions comply with the 2015 HMDA Final Rule by clarifying the information they are required to collect and report about their mortgage lending.

The proposal contains a number of clarifications, technical corrections, and minor changes to the HMDA regulation. These include clarifying certain key terms, such as “temporary financing” and “automated underwriting system.” The proposal would also, for example, establish transition rules for reporting certain loans purchased by financial institutions. Another proposed change would facilitate reporting the census tract of a property, using a new geocoding tool the CFPB plans to provide online.

The proposal will be open for public comment for 30 days after its publication in the Federal Register, which should happen soon. These proposed changes are no surprise. We expect final changes to be published within a few months. We also expect a hue and cry from the industry to extend the January 1, 2018 effective date to allow time for the late-breaking revisions to be implemented.

A copy of the proposed rule is available at: https://files.consumerfinance.gov/f/documents/201704_cfpb_NPRM_HMDA.pdf

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