The CFPB’s Proposed Rules Primarily Effects How Banks Collect and Report Data
On August 29th, 2014, the CFPB suggested a rule and changes to its Regulation C (Home Mortgage Disclosure) to apply changes to the HMDA (Home Mortgage Disclosure Act) required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Currently, Regulation C has different coverage criteria for depository institutions and non-depository institutions. Under the new proposal, any lender meeting the definition of “financial institution” under Regulation C will be required to report HMDA data if they originated more than 25 covered loans (excluding open-end lines of credit) in the previous calendar year. The CFPB also proposes to broaden the types of loans required to be reported. Currently, only home purchase loans, home improvement loans and refinancing loans are required to be reported, while other loans are optional. Under the August 29th proposal, financial institutions would be required to report all closed-end loans, open-end lines of credit and reverse mortgages secured by dwellings. Loans secured by raw land and temporary loans would continue to be exempt, and reporting unsecured home-improvement loans would not be required.
In addition to this, the Bureau would like to parallel many of the HMDA data reporting requirements with the Mortgage Industry Standards Maintenance Organization standards for residential mortgages. The CFPB would also like to change disclosure and reporting requirements. Presently, financial institutions report their HMDA data annually, by the 1st of March the following year. The Bureau wants this to be quarterly reporting, for those financial institutions that report large volumes of HMDA data.
The proposed rule contains a great deal of technical and detail-oriented instructions for collecting and reporting data. These are found in proposed Section 1003.59b0 of the Regulation and in proposed Appendix A to the Regulations.
Banks (as well as others) may comment, and if you believe these changes, or the specifics of the implementation of these changes as published in the notice, will have an adverse effect on your business please explain. You are encouraged to comment electronically. Comments must be submitted by October 29, 2014, and must be identified by Docket NO. CFPB-2014-0019, and may be sent the following ways:
Email: [email protected]
Electronic: Click Here (follow the instructions for submitting comments)
Office of the Executive Secretary
Consumer Financial Protection Bureau
1700 G Street NW
Washington, DC 20552