The 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 data.

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.

At 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.

While 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.

CPFB 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:

  • Improvements 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.
  • New 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.
  • Monitoring 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.

At 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.

Cordray 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.

The following information and assistance is currently available on the CFPB website at

  • The HMDA data tool
  • A factsheet about changes CFPB is considering
  • Proposals and questions for which CFPB will seek input from the Review Panel
  • A factsheet summarizing the Small Business Review Panel process