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Senate Bill S2155 Study Highlights Perils and Benefits of HMDA Regulatory Relief

LAGUNA HILLS, Calif., April 23, 2018 — QuestSoft, the nation’s leading provider of automated mortgage compliance software, today unveiled a new white paper analyzing the HMDA provisions contained in US Senate Bill S2155. The white paper specifically examines numerous issues associated with the regulatory relief bill currently moving through Congress. Among other things, the bill seeks to negate expanded regulatory submission requirements of Home Mortgage Disclosure Act (HMDA) data for depository institutions.

In preparing the report, authors Leonard Ryan, QuestSoft’s founder and president, and Loretta Kirkwood, QuestSoft’s vice president of Compliance, reviewed historic HMDA data and consulted with federal and state regulators, consultants, consumer groups and attorneys specializing in regulatory matters. The recommendations and conclusions of the study suggest:

- The proposed threshold of 500 loans contained in the regulatory relief bill does not significantly affect expanded reporting aggregates in urban areas. However, it does pose the risk of not reporting critical data elements from depository institutions that cater to rural lending. A reduction of the threshold to 250 is recommended to ensure sufficient data is available for peer comparisons and to identify housing related risks in these markets.

- The collection of disaggregated borrower race and ethnicity information should be immediately and uniformly addressed by the bill (or the CFPB) to eliminate confusion and ensure consistency across all reporting institutions.

- The investment in modifying systems to collect the data has already been made and it is unlikely that vendors will revert their systems back for exempted institutions. It will be important to create a standard for data captured by all reporting institutions.

- Regulators have traditionally requested much of this data as a supplement prior to an examination. Because the data is now easily obtainable from lenders, examiners on both the state and federal levels have indicated they will request the expanded data regardless of whether the law reduces its initial collection by certain lenders.

- Contrary to a primary argument of opponents, there is no evidence that the proposed thresholds will create a group of depository institutions that revert to pre-mortgage crisis lending practices.

- Public availability of the data may not be affected because of concerns over borrower data privacy of all expanded data.

- There is a probability that borrowers seeking to protect their data from public disclosure may actively seek out these smaller exempted institutions.

The complete study is available for download at


The Consumer Financial Protection Bureau (CFPB) mandated the collection of additional HMDA data elements beginning January 1, 2018. These new elements increase the burden of compiling and submitting data to the CFPB from 44 to 110 data fields almost tripling the borrower and credit decision information immediately available to regulators. This additional data is used by federal and state regulators to examine mortgage lenders for fair lending practices as well as determining credit availability across the country.

The current threshold for submitting HMDA data is twenty-five (25) loans or more in two consecutive years for all lenders. S2155 does not eliminate the need for these institutions to comply with the HMDA regulation but restricts the number of institutions required to submit the newly expanded data points by adjusting the threshold for expanded data submission from 25 to 500 originations for banks and credit unions only. This new threshold is not proposed for non-depository mortgage lenders.