Federal Agencies Issue Guidance on Home Mortgage Disclosure Act Requirements

With Home Mortgage Disclosure Act (HMDA) revised rules set to take effect on January 1, 2018, recent developments detailed below have focused on new and updated HMDA guidance from the Consumer Financial Protection Bureau (CFPB) and federal banking agencies.

CFPB Provides Update on HMDA Platform

In August, we reported that the CFPB had given the mortgage industry a first look at the internet-based platform it is developing for industry members to use to submit data under the HMDA.

The CFPB recently provided an update on the status of the HMDA portal. The CFPB advised that it is demonstrating to the industry the platform’s functionality and user experience through webinars, industry conferences, and in-person user testing sessions. The CFPB noted that a video version of its demonstration of the platform will be made available soon and that the platform will be made available to the industry fall. The industry must submit 2017 HMDA data to the CFPB through the portal by March 1, 2018.

- Richard J. Andreano, Jr.

CFPB Further Updates HMDA Rule Guidance Materials

The CFPB recently posted on its website updated versions of guidance on revisions to the HMDA rules that become effective on January 1, 2018, and also posted a new guidance item.

The CFPB updated the chart entitled Collection and Reporting of HMDA Information about Ethnicity and Race, and updated the Filing instructions guide for information collected in and after 2018.

In August, the CFPB issued various technical changes to the revised HMDA rule. The revised materials incorporate changes made in the August amendments.

The CFPB also added a new chart, Reportable HMDA Data: A Regulatory and Reporting Overview Reference Chart. It is a reference tool for data points required to be collected and reported under the revised HMDA rule, as amended in August.

- Richard J. Andreano, Jr.

Banking Agencies Identify Key HMDA Data Fields

The federal banking agencies have issued guidance to financial institutions on the key data fields under the revised HMDA rules that will be used to test and validate the accuracy and reliability of HMDA data.

In October 2015, the CFPB adopted significant changes to the HMDA rules that significantly expanded the amount of information that must be collected and reported. The changes are effective January 1, 2018.

The guidance issued by the federal banking agencies lists 110 data fields under the revised HMDA rules, and identifies 37 of the fields as Designated Key HMDA Data Fields. Key fields the agencies identify include the applicant’s age and credit score, the origination charges, discount points, lender credits, interest rate, debt-to-income ratio, combined loan-to-value ratio, and automated underwriting system result.

Despite the designation of certain data fields as key for examination purposes, examiners nevertheless may determine that additional HMDA data fields need to be examined.

    - Richard J. Andreano, Jr.

    CFPB Issues Update to HMDA Small Entity Compliance Guide

    The Consumer Financial Protection Bureau has issued a second version of the HMDA (Regulation C) Small Entity Compliance Guide incorporating the HMDA rule changes issued in August and published in the September 13 Federal Register, which we reported on previously. One of the main changes in the revised guide is the temporary increase in the threshold to report home equity lines of credit (HELOCs) from 100 to 500 transactions in each of the two proceeding calendar years. Based on the temporary increase, financial institutions originating 100 or more HELOCs but fewer than 500 in 2018 or 2019 would not be required to begin collecting and reporting HELOC data until January 1, 2020. However, the CFPB may take further action to amend the threshold.

        - Richard J. Andreano, Jr.

        DID YOU KNOW?

        Illinois Utilizes NMLS UAAR Functionality

        The Illinois Department of Financial and Professional Regulation earlier this month started using the NMLS Uniform Authorized Agent Reporting (UAAR) functionality to fulfill agent reporting requirements. The UAAR allows licensed money transmitters and money service businesses to file one uniform report of their authorized agent locations via NMLS to participating state agencies.

        Specific to Illinois, companies must upload Illinois-located agents (authorized sellers and other locations) in NMLS by December 31, 2017. As of November 1, 2017, companies will no longer be required to submit this information on the Illinois website. More information can be found here.

        - Wendy T. Novotne

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