Rick Fischer, Obrea O. Poindexter, and Kathleen C. Ryan
Banking + Financial Services, Financial Institutions + Financial Services, and Financial Services
On June 27, 2019, the CFPB extended the deadline for public comments on its advance notice of proposed rulemaking (ANPR) relating to the Bureau’s 2015 Rule addressing the Home Mortgage Disclosure Act (HMDA). The ANPR, issued on May 2, requested comments by July 8, 2019, on whether the CFPB should revise the data points lenders must report under the Bureau’s 2015 Rule, and the types of transactions covered by the 2015 Rule. The deadline for comments has been extended to October 15, 2019.
The 2015 Rule’s Expansion of HMDA
The Bureau’s 2015 Rule added 27 new data points to the HMDA data required to be reported and revised 5 existing data points. Roughly half of the new data points were mandated by the Dodd Frank Act, however, the remaining half were added by the CFPB using its discretionary authority. The 2015 Rule also expanded HMDA’s coverage to additional lenders and expanded the types of transactions covered by HMDA.
The CFPB is Seeking Additional Comment on its Reconsideration of Burdens and Benefits of the Expanded HMDA Data
The public will now have until October 15, 2019, to comment on the HMDA ANPR. The ANPR follows the Bureau’s statement in December 2017 that it intended to reconsider certain aspects of the 2015 Rule, including the data points added under discretionary authority and the expanded institutional and transactional coverage. The ANPR requested comment on whether the 2015 Rule appropriately balances the burdens and benefits of increased data collection and whether the CFPB should propose to change the data points added or revised in the 2015 rulemaking.
In the ANPR, the Bureau also requested comment on whether it should exclude reporting on business purpose loans to non-natural persons secured by multifamily dwellings. According to the CFPB, industry stakeholders have stated that data on such transactions is not necessary to fulfill HMDA’s purposes.
The Public May Also Have Additional Opportunity to Comment on HMDA’s Lender Coverage Thresholds
On June 27, the Bureau also indicated that it plans to re-open the comment period on its May 2nd Notice of Proposed Rulemaking to implement changes to HMDA’s lender coverage thresholds mandated by the Economic Growth, Regulatory Relief and Consumer Protection Act. That comment period had ended June 12, 2019. The Bureau indicated that it would re-open the comment period to allow the public to consider the 2018 loan level HMDA data in drafting new comments.
Regulatory Agencies Continue to Rely on HMDA Data in Enforcement
At the same time the Bureau is considering whether the expanded HMDA data is unduly burdensome, it continues to use HMDA data in its enforcement efforts. For example, the CFPB recently imposed a $1.75 million fine on one of the largest HMDA reporters for allegedly inaccurate HMDA data on race, ethnicity and sex. In addition, on June 13 the Department of Justice settled a redlining case opened in June 2017 with a bank, relying in part on HMDA data. Although no civil money penalty was imposed, the bank is required to commit $1.12 million to assist minority borrowers and additional amounts for marketing and outreach to minority neighborhoods.
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