Last week, the CFPB announced that it is issuing HMDA warning letters to 44 mortgage lenders and mortgage brokers stating that the Bureau has information that appears to show those entities “may not be in compliance with certain provisions of the Home Mortgage Disclosure Act (HMDA) and its implementing regulation, Regulation C.” You can view sample CFPB HMDA warning letters here.
Director Richard Cordray explains in the CFPB’s press release, “Financial institutions that fail to report mortgage information as required make it harder to identify and address discriminatory lending . . . No mortgage lender that is required to report their loan data can avoid this responsibility.”
The Home Mortgage Disclosure Act, which was originally enacted in 1975, requires many financial institutions to collect data about their housing-related lending activity, including home purchase loans, home improvement loans, and re-financings that they originate or purchase, or for which they receive applications.
According to the CFPB’s press release, the Bureau identified the companies by reviewing available bank and nonbank mortgage data. News of the Bureau’s intent to crack down on entities that have ignored reporting obligations should come as no surprise. In October 2013, the CFPB issued a bulletin, putting mortgage lenders on notice regarding the importance of submitting accurate mortgage loan information.
In October 2015, the CFPB issued a final rule amending Regulation C. The changes, which, in part, implement the Dodd-Frank Act’s amendments to HMDA, include:
- An expansion of the data financial institutions must collect and report;
- Changes to the scope of HMDA’s coverage of both institutions and transactions; and
- New processes for disclosing data.
The new rule is designed to improve the quality and type of data that is collected and reported, with the aim of shedding more light on consumers’ access to credit. Most of the revised requirements of the final rule will take effect on either January 1, 2018.