WASHINGTON (1/1/16)--The huge expansion of Home Mortgage Disclosure Act (HMDA) data beyond Dodd-Frank requirements is not necessary for the Consumer Financial Protection Bureau (CFPB) to carry out its mission, says the Credit Union National Association (CUNA). In a comment letter filed with the Office of Management and Budget Friday in response to a request for comment on HMDA data collection, CUNA shared its numerous concerns about the negative impact on credit unions.
The CFPB finalized the HMDA rule in October, adding requirements to report on, as CUNA calls it, “a staggering 48 data fields,” far more than the 17 required by law.
“While Congress did authorize the CFPB to collect ‘such other information as the bureau may require,’ it is unlikely this grant is an unbridled delegation to the CFPB to more than double the amount of express data points that Congress had indicated for the bureau to collect,” the letter reads.
CUNA is also concerned that the CFPB has failed to articulate what HMDA data will be made public. Dodd-Frank explicitly directs the CFPB to develop regulations to determine which data points will be made public.
“In the HMDA rulemaking, the CFPB fell well short of this mandate and only adopted a ‘balancing test’ to balance the importance of releasing the data to accomplish HMDA’s public disclosure purposes against the potential harm to an applicant or borrower’s privacy interest that may result from the release of the data without modification,” the letter reads. “Input solely on a nebulous balancing test is in fact a blatant disregard of the statutory requirement to provide regulations, in consultation with other banking regulatory agencies, to determine which data points will be public.”
The letter argues that HMDA data under the old regime, and under the new rule, cannot establish discrimination, as is its stated intent. The reporting does not contain credit or employment history, assets or other key elements of pricing, nor does is contain credit union field of membership restrictions that can affect a lending decision.
“It is precisely these limitations on the data which illuminate why the data collection is thus overbroad and not reasonably tailored to allowing the CFPB to accomplish its oversight function,” the letter reads. “Since the data cannot establish discrimination, the CFPB has clearly overstepped the boundaries of what is necessary for it to accomplish its oversight function and protect the public.”
CUNA also asked for an extension of the compliance deadline to Jan. 1, 2018 with reporting commencing Jan. 1, 2019; an exemption for institutions issuing 500 covered closed-end loans and 1,000 covered open-end loans; and for a safe harbor period for good-faith efforts to comply.
In response to specific questions about the necessity and burden of HMDA reporting, CUNA stated:
The CFPB announced Friday it is seeking feedback on resubmission of HMDA data, due to changes in the finalized rule. The bureau seeks comments on whether the resubmission guidelines for incorrect information, and when supervised institutions will be expected to correct and resubmit data.