The Consumer Financial Protection Bureau (CFPB) has inviting comment periods on changes to its Home Mortgage Disclosure Act (HMDA) reporting rule. CFPB Director Richard Cordray said the proposed changes are designed to facilitate compliance with its 2015 updates to the rules by clarifying the information financial institutions are required to collect and report about their mortgage lending.
The HMDA was originally enacted in 1975. It requires many lenders to report information about the home loans for which they receive applications or that they originate or purchase. The information is public and allows individuals, organizations, and regulators to monitor whether financial institutions are serving the housing needs of their communities, to assist in attracting private investment to areas where it is needed, and to identify possible discriminatory lending patterns.
HMDA was amended in 2010 by the Dodd-Frank Wall Street Reform and Consumer Protection Act which transferred rule-making to CFPB and expanded the scope of information to be collected and reported. In 2015 CFPB issued a final rule implementing the Dodd-Frank Act amendments, modifying the types of institutions and transactions subject to the rule, the types of data to be collected, and the processes for reporting and disclosing it. Most amendments are scheduled to go into effect on January 1, 2018.
The Bureau says since the final rules were announced it has interacting and consulted with stakeholders and identified several areas where implementation could be facilitated through clarifications, technical corrections, or minor changes. It has now proposed amendments to address those areas.
These changes 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 transition rules would permit financial institutions to report not applicable for these data points when reporting certain loans that they purchased that were originated before certain regulatory requirements took effect. The proposal also creates a new reporting exception for certain transactions associated with New York State consolidation, extension, and modification agreements.
Cordray said, "The Home Mortgage Disclosure Act shines a much-needed spotlight on the mortgage market, which is the largest consumer financial market in the world. Today's proposal reflects the Bureau's ongoing and substantive engagement with stakeholders in the marketplace, and will help industry meet its new reporting obligations."
The CFPB seeks input from a wide range of stakeholders and invites the public to submit written comments on the proposal. The proposal will be open for public comment for 30 days after its publication in the Federal Register. Interested parties can review the proposed changes here.