As the CFPB undertakes its planned assessment of the 2015 Home Mortgage Disclosure Act regulations and related amendments, the American Bankers Association and four banking and housing groups today emphasized that the rules continue to place a significant, ongoing cost and compliance burden on mortgage lenders. The groups echoed previous comments from 2019, which detailed how HMDA-related compliance costs have imposed upward pressures on what consumers pay on a per-transaction basis, and have inflated institutional expenditures due to additional staffing and resources needs.
The groups cited data from a survey conducted as part of the 2019 response, noting that “although we have reason to believe that multiple cost figures have increased” since then, “the data remain the most accurate cost data available on a market-wide basis.” They added that this data would be difficult to obtain from 2020 and 2021 due to the pandemic, and encouraged the CFPB to rely on the 2019 data as it undertakes its assessment of the HMDA rules.
Among other things, the groups urged the bureau to preserve exemptions to HMDA reporting requirements for small mortgage lenders. “Smaller institutions that originate a limited number of mortgages are often unable to support the very high costs of HMDA compliance,” they noted. “Ensuring full HMDA compliance requires specialized staffing, the establishment of well-defined informational flows, specialized calculations, dedicated software systems, policies and procedures, and extensive training. A decision by a small institution to exceed a threshold and initiate HMDA reporting cannot be done through the ‘flip of a switch.’ Instead, it requires thoughtful balancing of costs, risks, and resource demands as well as time to implement the necessary operational and compliance infrastructure to support it.”