Consumer Financial Protection Bureau (CFPB) has announced it will take the
initial step to improve data collected under the Home Mortgage Disclosure Act
(HMDA) by convening a panel of small businesses to provide feedback on its
proposals. The Bureau is also unveiling
a new online tool that makes it easier to navigate the publicly available HMDA
was enacted in 1975 to gather information on whether financial institutions
were serving the housing needs of their communities and providing access to
residential mortgage credit. HMDA was later expanded to capture information
useful for identifying possible discriminatory lending patterns. Responsibility for HMDA rulemaking was transferred
to the newly created CFPB under the Dodd-Frank Wall Street Reform and Consumer
Protection Act which also mandated CFPB to expand the HMDA to include information
that would be helpful to regulators in spotting troublesome mortgage trends.
present HMDA data is reported by 7,400 financial institutions on about 18.7
million loans and applications. Lenders
report the type and general location of the property; and the race, ethnicity,
and sex of the applicant, information about the loan amount and whether the
loan is for purchasing a home, refinancing an existing mortgage, or home
improvement. Once revised to protect
privacy, a subset of the HMDA data is made available to the public.
a lot of information is contained in HMDA data CFPB says additional mortgage
information could help federal regulators, state regulators, lenders, consumer
groups, and researchers better monitor the market. For example, no data is
currently gathered on home equity lines of credit which surged prior to the
housing crisis nor on teaser mortgage rates which had a hand in causing
it. HMDA data currently contains only
limited information about loan features and interest rates.
is considering changes to the rules that establish what data financial
institutions are required to provide under HMDA. Preparatory to any rules changes and as
required by the Small Business Regulatory Enforcement Fairness Act (SBREFA),
CFPB will convene a Small Business Review Panel of small lenders which will be
asked for early feedback on how data can be updated to better reflect what is
happening in the market. Potential
changes under consideration by the Bureau include:
required by Dodd-Frank: The Act directs the Bureau to update HMDA
regulations so as to obtain information that could alert regulators to
potential problems in the marketplace. This includes: the length of the loan;
total points and fees; the length of any teaser or introductory interest rates;
and the applicant or borrower's age and credit score.
developments in the market: The
Bureau is considering additional information that would give regulators a
better view of developments in all segments of the housing market such as underwriting
and pricing information. This will help
regulators investigate the true trouble spots in the mortgage market.
access to credit: Other new requirements could include gathering
information about access to credit in the mortgage market such as explanations
of rejected applications, whether the lender considered the loan to be a
Qualified Mortgage, and information such as debt-to-income ratios to help
regulators see whether lenders are making loans that are expensive or
unsuitable for borrowers.
a press conference CFPB Director Richard Cordray said that his agency was also
considering ways to make the HMDA data collection less burdensome for
lenders. One way would be to level the playing
field between bank and nonbank lenders. "Today, banks that meet certain
conditions must submit annual reports even if they make only a single
loan. However, nonbank mortgage lenders generally are required to report
only if they make 100 loans and meet other conditions." CFPB is considering a proposal to create consistency
by requiring all banks and nonbanks that meet certain conditions to report if
they make 25 or more loans in a year, but exempting those that fall beneath
that proposed threshold.
suggested other ways in which reporting could be streamlined such as aligning HMDA data requirements with existing standards
for information on processing, underwriting, pricing, and selling loans that are
already in widespread use in the market.
CFPB will also consult with regulators and consider creating an
interface that will allow lenders to connect their own data submission and
editing software to a CFPB intake system.
In addition to the panel Cordray said
his agency will be seeking feedback from industry and consumer groups that will
be affected by these changes to the HMDA process. "Sometime later this
year, we will put out a proposed rule seeking broader public feedback through
the standard notice-and-comment rulemaking process. So today is only the
beginning of our journey, and we plan to be fully engaged with the public."
He also announced that a new tool to assist with public
access to a subset of HMDA data is now available online. Cordray said that for years, people
have commented that the size and complexity of the data can make it difficult
to use so this new tool provides the public with easier access to information
for 2007 through 2012. Users can filter data, download it, create summary
tables, and share the results. The tool uses a format that is compatible
with most spreadsheet programs and most programming software.
following information and assistance is currently available on the CFPB website
The HMDA data tool
A factsheet about changes CFPB is
Proposals and questions for which
CFPB will seek input from the Review Panel
A factsheet summarizing the Small
Business Review Panel process