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Watchdog agency eases enforcement of HMDA rule

The Trump administration has made its first moves to roll back the Consumer Financial Protection Bureau’s (CFPB's)mortgage reporting rule.

In a big win for the industry, the CFPB announced that it would use a light-handed approach to enforcing the new data-collection and reporting requirements that will kick in Jan. 1 under the Home Mortgage Disclosure Act (HMDA). The CFPB will not penalize financial institutions for non-material errors discovered in the data collected from consumers in 2018. The agency also signaled that it could roll back some of the HMDA changes.

HMDAreportingThe CFPB will begin rulemaking to examine HMDA’s new discretionary data points, which are fields that the bureau added on its own and were not specifically mandated by the Dodd-Frank Act. The bureau will also look at the tests that determine which institutions have to report data, and the transaction types that trigger HMDA reporting. 

These changes were announced Thursday by Acting Director Mick Mulvaney, President Donald Trump’s budget director, who was appointed to take over the agency after Richard Cordray resigned in mid-November.  

In October 2015, the CFPB published a final rule that required  lenders to gather and report significantly more information about their consumers. The bureau added 25 new data fields to the current 23, but also modified 20 of the existing fields to require additional data points. Some of these changes were mandated by Dodd-Frank, but the CFPB also used its discretionary authority to add several fields.

Companies were required to begin collecting the data as of Jan. 1 of next year, and begin officially reporting the gathered data in early 2019. 

Mulvaney, a critic of the CFPB’s rulemaking under Cordray, is widely expected to alter the bureau’s course. 

The mortgage industry has been lobbying for more time to comply with HMDA, a reduction in the required data fields, and changes that would expand the number of companies that would be exempt from the HMDA requirements.

Several banking institutions issued news releases in support of the moves.

“As the CFPB acknowledged in its statement, new HMDA regulations scheduled to take effect on Jan. 1 pose significant systems and operational challenges for financial institutions and third-party vendors,” the Independent Community Bankers of America (ICBA) said in a release. “Left unaddressed, these mandatory reporting requirements would divert critical community bank resources that would otherwise be used to serve American consumers while posing privacy concerns for borrowers."


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