Compliance: New series looks at new HMDA reporting burdens
WASHINGTON (10/19/15)--Fresh off the release of the final Home Mortgage Disclosure Act (HMDA) rule last week by the Consumer Financial Protection Bureau (CFPB), CUNA’s compliance gurus offer a look at what the increased reporting burdens mean for credit unions.
This story marks the first entry in a new News Now weekly series running every Monday, in which CUNA compliance experts will highlight the latest and greatest compliance issues facing the credit union system--like the new reporting requirements the CFPB unveiled Oct. 15.
The new CFPB rule exempts from HMDA reporting:
Lenders that originate fewer than 25 closed-end mortgage loans, or fewer than 100 home equity lines of credit (HELOCs) in the two preceding calendar years; and
- Most commercial-purpose loans, unless they are for home purchase, home improvement, or refinancing.
Requires lenders to report information about applications and loans for most closed-end mortgage loans and adds mandatory data collection and reporting for HELOCs and reverse mortgages. CUNA requested the HELOCs not be included.
Requires reporting of the 17 data points mandated in the Dodd-Frank Act, including property value, terms of the loan and the duration of any teaser or introductory interest rates.
Adds another 16 data points (down from the 20 originally proposed bythe CFPB) for reporting.
- Mandates that lenders report whether ethnicity, race or sex information was collected on the basis of visual observation or surname when an applicant does not provide the information on the application.
The rule also eliminates:
The requirement that lenders report on Qualified Mortgage status, the initial draw on an open-end line of credit, information about the metropolitan statistical area and the risk-adjusted, pre-discounted interest rate; and
- Public disclosure of a lender’s modified loan application register (LAR). Lenders are instead required to provide a public notice indicating that the lender’s LAR can be obtained on the CFPB’s website.
The 25-loan threshold becomes effective Jan. 1, 2017, while most of the rest of the rule will be effective Jan. 1, 2018. Large-volume mortgage lenders will need to file quarterly HMDA data starting Jan. 1, 2020.
The first reporting under the new final rule will be in 2019 for 2018 data.
Watch for the next installment in this new series Oct. 26, and click here to subscribe to News Now updates.