Joint Comment Letter Highlights ‘Astoundingly High’ Cost of 2015 HMDA Rule

Implementation of the Consumer Financial Protection Bureau’s 2015 Home Mortgage Disclosure Act rule resulted “astoundingly high” costs for creditors, the American Bankers Association said in a joint comment letter with the Bank Policy Institute, Consumer Bankers Association, Housing Policy Council and Mortgage Bankers Association today. The letter came in response to an advanced notice of proposed rulemaking issued by the Consumer Financial Protection Bureau earlier this year seeking feedback on the costs and benefits of the expanded HMDA data reporting requirements, as well as previously existing data points that were revised by the 2015 HMDA rule.

The groups cited data from a creditor survey demonstrating the significant costs of compliance with the rule, and how those cost in turn affect consumers. The groups noted that “continuing compliance costs impose strong upward pressures on what consumers pay on a per-transaction basis” and that “these burdens compel additions to lender staff levels, inflating institutional expenditures generally.”

As the CFPB considers future modifications to the HMDA reporting framework, the groups called on the bureau to eliminate various data points from the HMDA requirements, limit coverage of the law to residential-purpose loans only and remove the requirement to report business or commercial-purpose loans made to a non-natural person and secured by a multifamily dwelling. The groups also included with the comment letter an appendix of more than 60 questions in need of further clarity from the CFPB.

A separate comment letter filed by ABA, MBA, BPI and several housing groups echoed the point that HMDA reporting requirements should not apply to business- or commercial purpose loans made to a non-natural person, noting that most HMDA data fields are inapplicable to business-to-business or multifamily loans.