Mortgage Lenders Must Restart Reporting HMDA Data
Written By: Joel Palmer, Op-Ed Writer
The Consumer Financial Protection Bureau (CFPB) has rescinded a temporary policy that enabled mortgage lenders to not file quarterly reports under the Home Mortgage Disclosure Act (HMDA).
The rescission order took effect on April 1. It instructs all financial institutions required to file quarterly to do so beginning with their 2021 first quarter data, due on or before May 31, 2021, for all covered loans and applications with a final action taken date between January 1 and March 31, 2021.
In March 2020, as the COVID-19 pandemic grew was taking hold, the bureau issued a statement that, until further notice, it would not initiate an enforcement action for failure to report HMDA data. The bureau suspended reporting to help lenders focus on ensuring that consumers had access to credit during the pandemic.
“The bureau has concluded that this tradeoff is no longer necessary,” it said in its bulletin.” With regard to the quarterly filing of HMDA data, the bureau believes that companies have had sufficient time to adapt to the pandemic and should now be able to respond to the credit needs of consumers while still complying with the quarterly data submission requirement under Regulation C without the flexibility afforded under the statement.”
The policy rescission on mortgage data was one of seven policy statements that CFPB rescinded last week. These temporary policies, issued between March 26 and June 3, 2020, provided flexibilities to financial institutions in consumer financial markets including mortgages, credit reporting, credit cards and prepaid cards. The seven rescissions, effective April 1, provide guidance to financial institutions on complying with their legal and regulatory obligations.
“We are now over a year into the disruptive and deadly COVID-19 crisis. The virus has affected industry as well as consumers, but individuals and families have been hardest-hit by the pandemic’s health and economic impacts,” said CFPB Acting Director Dave Uejio.
“Providing regulatory flexibility to companies should not come at the expense of consumers. Because many financial institutions have developed more robust remote capabilities and demonstrated improved operations, it is no longer prudent to maintain these flexibilities. The CFPB’s first priority, today and always, is protecting consumers from harm.”
CFPB also announced last week that HMDA Modified Loan Application Register (LAR) data for 2020 were published on the Federal Financial Institutions Examination Council’s HMDA Platform for approximately 4,400 HMDA filers. The published data contain loan-level information filed by financial institutions, modified to protect privacy.
About the Author
As an NAMU® Opinion Editorial Contributor, Joel Palmer is a freelance writer who spent 10 years as a business and financial reporter and another 10 years in marketing for the insurance and financial services industries. He regularly writes about the mortgage industry, as well as residential and commercial real estate, investments, and retirement income planning. He has also ghostwritten books on starting a business, marketing, and retirement income planning.
