CFPB to reopen mortgage disclosure rule, will not penalize data errors


The Consumer Financial Protection Bureau said Thursday that it plans to reopen its rulemaking for the Home Mortgage Disclosure Act and will not assess penalties against mortgage lenders for any errors in data collected next year.

The announcement marked a big win for the mortgage industry, which has repeatedly asked for a so-called safe harbor from HMDA reporting errors and wanted a delay in the rule, which goes into effect on Jan. 1.

“The bureau does not intend to assess penalties with respect to errors in data collected in 2018 and reported in 2019,” the CFPB said in a press release. “Collection and submission of the 2018 HMDA data will provide financial institutions an opportunity to identify any gaps in their implementation of amended Regulation C and make improvements in their HMDA compliance management systems for future years. Any examinations of 2018 HMDA data will be diagnostic to help institutions identify compliance weaknesses and will credit good faith compliance efforts.”

OMB Director Mick Mulvaney

The mortgage industry is likely to welcome the move by acting CFPB Director Mick Mulvaney to reassess new HMDA requirements finalized in 2015 by the agency.

Bloomberg News

The change is part of acting Director Mick Mulvaney’s plan to reduce the burden of regulations on companies and to reconsider rules promulgated by former CFPB Director Richard Cordray.

Mortgage lenders have complained about the CFPB’s sweeping changes made in 2015 to Regulation C, which implements HMDA. Some of the data is mandated by the Dodd Frank Act, but under Cordray the bureau added 25 new data points and modified 14 others, in addition to the existing 9 that were part of required reporting for years.

The mortgage industry now has cause to rejoice as Mulvaney considers scrapping what is not required by statute, such as loan underwriting and pricing information.

“The rulemaking may re-examine lending activity criteria that determine whether institutions are required to report mortgage data,” the CFPB said. “The rulemaking may also look at adjusting the new requirements to report certain types of transactions. Finally, the rulemaking may re-assess the additional information that the rule requires beyond the new data points specified under the Dodd-Frank Act.”

Enacted in 1975, HMDA requires that most mortgage lenders report information on mortgage applications for certain types of loans they originate and purchase. In August, the CFPB issued a final rule that made technical corrections to the HMDA reporting requirements, including increasing the threshold for collecting and reporting data on home equity lines of credit for two years.

Beginning on Jan. 1, 2018, financial institutions also will be submitting HMDA data collected in 2017 using the bureau’s new online platform.

The CFPB said it recognizes the significant “systems and operational challenges” in meeting HMDA requirements.

“For HMDA data collected in 2018 and reported in 2019, the bureau does not intend to require financial institutions to resubmit data unless data errors are material, or to pay penalties with respect to data errors,” the CFPB said.

The CFPB changes are being coordinated with the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp. and the National Credit Union Administration.

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