PROPOSED HMDA DISCLOSURE POLICY

On September 20 the Consumer Financial Protection Bureau (CFPB) published proposed policy guidance describing the Home Mortgage Disclosure Act (HMDA) data the CFPB proposes to make available to the public beginning in 2019, including modifications to protect consumers’ privacy.

The Home Mortgage Disclosure Act requires many lenders to report and disclose to the public certain information about their mortgage lending activities. HMDA data is used for a variety of purposes, including: to monitor whether financial institutions are serving the housing needs of their communities, to assist in distributing public-sector investment to attract private investment to areas where it is needed, and to identify possible discriminatory lending patterns.

In 2015 the CFPB finalized changes to Regulation C updating the quality and type of data that financial institutions report. Financial institutions will begin collecting the new information in 2018, which includes data fields such as the property value, the interest rate of the loan, and the applicant’s debt-to-income ratio.

The CFPB has considered whether and how HMDA data should be modified prior to its disclosure to the public, in order to protect applicant and borrower privacy while also fulfilling HMDA’s public disclosure purposes. The proposed policy guidance describes the loan-level HMDA data that the CFPB proposes to make available to the public beginning in 2019. While the CFPB proposes to make the bulk of this information public, it also proposes important modifications to the data to protect consumers’ privacy. For instance, the CFPB proposes to exclude certain data fields from what is shared publicly, including the property address and applicant’s credit score. The CFPB also proposes to disclose certain information with reduced precision, for instance by disclosing an applicant’s age as a range rather than a specific number.

The CFPB is seeking public comment on the proposal for 60 days following publication in the Federal Register.

 Other recent HMDA news:  https://www.jackscomplianceresource.com/hmda-examiner-transaction-testing-guidelines/

A copy of the 97-page proposed policy guidance is available at: https://files.consumerfinance.gov/f/documents/201709_cfpb_hmda-disclosure-policy-guidance.pdf

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