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QuestSoft Urges CFPB to Delay Implementation of HMDA Specific Data Points to 2019 or Later

by Brian Arnesen | Aug 04, 2017

LAGUNA HILLS, CALIF., June 8, 2017 – In a letter written to the Consumer Financial Protection Bureau (CFPB) addressing proposed changes by the CFPB to its HMDA regulations, QuestSoft president Leonard Ryan urged the Bureau to delay its changes to geocoding and remove additional demographic data. 

The eight page letter focused on five key areas of the new regulation:

    1. Bona Fide Errors and Proposed Geocoding Safe Harbor 2. Demographic Data Collection – Specifically as it related to Ethnicity and Race Subcategories 3. Reporting Threshold Adjustments 4. NMLSR ID Reporting 5. Industry Readiness 
Ryan expressed concern for the future of LMI lending as a result of the CFPB plans to introduce a less accurate geocoding system but bolster it with a safe harbor. The new geocoder is expected to be 30% less accurate on results close to census tract boundaries and not be able to accommodate new addresses as quickly as products used in the industry today (including the FFIEC geocoder). 

Ryan also expressed concern that a guarantee on the geocoder will eliminate the higher quality products from the market and cause accuracy concerns for the Community Reinvestment Act and the trading of Low Moderate income loans in the open market. 

In the letter, Ryan continued with a detailed analysis of problems facing the industry over the new Ethnicity and Race Subcategories, urging the Bureau to provide at least one extra year due NEWS RELEASE to implementation delays of both the CFPB and the GSE’s in releasing the new Uniform Residential Loan Application (URLA). 

“In many ways, the demographic data additions are turning out to be the biggest train wreck of the new regulation,” Ryan said. “The lack of clarity and confusion over properly classifying borrowers has the potential to be a regulatory and fair lending compliance nightmare.”

A complete version of the letter is available at https://www.questsoft.com/hmda-hq 

About QuestSoft®
Laguna Hills, Calif.-based QuestSoft is a leading provider of comprehensive compliance software and services for the mortgage, banking and credit union industries. QuestSoft combines 20+ years of mortgage regulatory, CRA and Fair Lending compliance analytics, data management and software design expertise with best-in-class customer service to consistently improve client compliance accuracy and facilitate smoother regulatory audits. QuestSoft products, interfaced with over 40 LOS providers, enable more than 2,200 clients to simplify and speed the collection, analysis, compilation and reporting of key lending regulatory report data. For more information, call 800-575-4632, ext 1, or visit www.questsoft.com. 

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