On February 5th, thirteen Democratic Senators introduced a bill to reinstate the Dodd-Frank reporting requirements that were rolled back by the Economic Growth, Regulatory Relief, and Consumer Protection Act—also known as S.2155. Most notably, this new bill would require banks or credit unions that make more than 25 mortgage loans a year or 100 home equity lines of credit to report detailed loan characteristics that they were previously exempt from reporting, such as interest rates, points, and fees, loan terms as well as borrower characteristics like credit score and ethnicity. The bill would also require banks and credit unions to report a unique loan identifier on all loans.

As internet connectivity reaches all-time highs and 5G networks are becoming a reality, it is no surprise that businesses in every industry are adopting new technologies to stay ahead of the game. This digital disruption even affects mortgage lending and compliance. From more agile loan origination systems, to speedier and more effective compliance software, technology is helping borrowers and lenders rapidly reduce their loan closing times.

The following are questions submitted by attendees of QuestSoft’s HMDA Filing Update Webinar held on January 8 and 9, 2019. Answers are provided by Leonard Ryan, President of QuestSoft, and Loretta Kirkwood, Vice President of Compliance for QuestSoft.

Over the past few years, the mortgage industry has seen a significant amount of change. From sky-high origination and refinancing volumes, to a hyper-regulated environment -- and now rising affordability costs -- every year brings new challenges. While it can be hard to predict the future; by analyzing current trends, lenders can better prepare for the year ahead.

During the last two weeks of February, our support department receives an enormous amount of calls from lenders who need help or have questions about submitting their HMDA data to the CFPB. With the new HMDA rules in effect — and with lenders now submitting three times the amount of data — we anticipate that there will be some road bumps along the way. As a result, we have compiled some helpful tips for lenders to make sure March 1st is just another day.

On December 21, 2018, the CFPB announced a final policy guidance about modifications to public HMDA data to protect consumers’ privacy. The Bureau will modify the public loan-level HMDA data to exclude:

While everyone’s attention has been focused on implementing 2018 HMDA data requirements — and then adjusting to S.2155 partial exemptions — regulators have been talking about what changes are required for the Community Reinvestment Act (CRA). The discussions started with “reducing burden” but have recently shifted to the need to more clearly define the purpose of CRA while adjusting to the new financial services landscape. Recommended changes would include redefining the concept of an assessment area, providing clarity and guidance to the examination process, the potential expansion of data collection and reporting, and potential incentives for certain LMI activities.

On October 3rd, QuestSoft hosted a webinar dedicated to S.2155 HMDA implementation for institutions covered under the partial exemption rule. During this webinar, we received a lot of great questions concerning HMDA reporting under the new rule.

On September 25th, the OCC released its bank supervision operating plan for 2019. According to the OCC, “the operating plan guides the development of supervisory strategies for individual national banks, federal savings associations, federal branches, and federal agencies, as well as technology service providers.”

One of the best ways to mitigate risk is to foster a proactive risk management culture. As we have seen with institutions in the past, culture is the driving force behind employee behavior, decision making, growth, and regulatory scrutiny. Risk management culture should be the responsibility of all employees with upper management setting the example.