Make Your Voice Heard: CFPB Extends Comment Period for HMDA Revisions
The CFPB has extended the comment period for both the HMDA ANPR and NPRM and issued minor revisions to the Filing Instructions Guide (FIG). Are more changes coming to HMDA? We'll have to wait and see.
There has been a lot of activity this year regarding potential changes to HMDA – specifically, the Notice of Proposed Rule Making (NPRM) and the Advance Notice of Proposed Rulemaking (ANPR) issued on May 2nd. The original comment period for the NPRM ended on June 12th and the ANPR on July 8th, which have both been extended to October 15th. The ANPR comment period was extended on June 27th. The NPRM comment period was extended on August 2nd specifically for the proposal to permanently modify the coverage threshold for closed-end and open-end mortgage.
- The NPRM contains two alternatives for closed-end mortgage loans to permanently increase the coverage threshold from 25 to either 50 or 100 loans. For open-end lines of credit, the NPRM includes an extension of the temporary coverage threshold of 500 open-end lines of credit for an additional two years and setting a permanent threshold of 200 open-end lines of credit beginning in 2022.
- The ANPR requests comments on two key areas – 1) changes to actual HMDA data points and 2) the requirement to report business or commercial purpose transactions. Comments are requested on whether or not there are any NEW data points that should be added or if there re any existing data points that should be revised. Specific reference is made to the free-form text fields, disaggregated race and ethnicity, and manufactured home property fields.
Approximately 5,400 lenders reported HMDA data in 2018, but only 33 comments have been submitted to the ANPR which addresses HMDA data collection and only 372 comments have been submitted to the NPRM which changes the thresholds for reporting. It is definitely time to get your comments in and ensure the industry is heard when it comes to the regulatory burden imposed by HMDA data collection and reporting!
The industry has faced significant challenges in modifying systems and processes to capture data that is only needed and/or necessary for HMDA reporting. Comments should address the costs and benefits of specific data points and whether the CFPB’s web-based HMDA tools resulted in additional costs or reduced costs.
- Is there a NEW data field you think should be added to HMDA reporting? For example, could “subject to Reg Z” help in the process since that test is considered in the reporting of specific fields.
- Does the collection of disaggregated race and ethnicity fields impact internal controls and/or risk management efforts? Is there a significant impact on internal data integrity reviews? To what extent are customers completing the disaggregated options?
- Do free form text fields create unique challenges? To what extent are these fields utilized by examiners and for what purpose?
- Has the CFPB HMDA submission site improved the process or created new challenges? Are there internal security control issues that have impacted the use of the site?
- To what extent do business and commercial purpose transactions add value to the purpose of HMDA?
Please feel free to reach out to me at firstname.lastname@example.org if you would like to discuss these proposals.