CFPB Proposes Corrections to HMDA Final Rule

Following outreach to industry stakeholders — including the American Bankers Association — the Consumer Financial Protection Bureau today proposed a number of technical corrections and clarifications to the data lenders are required to collect and report under the final Home Mortgage Disclosure Act Rule (Regulation C). Most provisions of the rule take effect Jan. 1, 2018. Today’s proposal would correct errors made by the bureau in the original rule, but lenders would have to comply with the new changes, when finalized, by the same effective date as the original rule.

Among other things, the proposal would create transition rules for two data points — loan purpose and the unique identifier for the loan originator — which would permit lenders to report “N/A” if the loan was purchased and originated before the effective date of the final rule. It would also clarify certain terms, such as “temporary financing” and “automated underwriting system,” create a new exception for certain loans originated under a New York state program and provide an online geocoding tool for reporting the census tract of the property securing a covered loan.

ABA has long sought changes to the final HMDA rule since it was issued in October 2015. The association remains particularly concerned about privacy protection and data security, which today’s 150-page proposal does not address. Comments on the proposal will be due 30 days after the rule is published in the federal register. ABA is carefully reviewing the changes to determine whether they will impose an additional compliance burden for banks and will provide feedback to the bureau.

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