The CFPB is welcoming the new year with a change of heart on the collection of the new HMDA data. According to Acting Secretary Mulvaney, CFPB will offer lenders a safe harbor from enforcement action arising from reporting errors for the new 2018 data. A big win for lenders!
Further, according to Mulvaney, the CFPB plans to reduce the burdens of over-regulation inflicted on financial institutions by former Secretary Cordray. Don’t get too excited, but Mulvaney says he plans to scrap what is not required by statutes, such as loan underwriting and pricing information.
He said they may:
- Reexamine lending activity criteria that determine whether institutions are required to report mortgage data
- Look at adjusting the new requirements to report certain types of transactions, and
- Reassess the additional information that the rule requires beyond the new data points specified under the Dodd-Frank Act
All good news for lenders, albeit that many have already spent lots of time and money getting ready for the new HMDA.
Nonetheless, the safe harbor will now allow lenders some time to go through what could be likened to a trial run before hitting the big HMDA reporting stage. A little more time to work out some of the kinks. Thank you, Mr. Mulvaney and President Trump. Don’t pass up this opportunity.
This action signals a new regulatory environment and signs that maybe lenders and the CFPB can work together toward better consumer protections in a non-adversarial way. One can only hope.
As a byproduct, the concerns with the privacy of certain consumer information that may have been made available to the public through the new HMDA reporting rules may now be alleviated with the collection and reporting of less information. That’s known as consumer protection. The primary role of the CFPB. That’s a good thing.
Don’t rest on your laurels. There is still much to do when it comes to gathering and reporting your required HMDA data. A safe harbor won’t protect you if your information is consistently incomplete and, more importantly, inaccurate. Whatever is required must be reported timely and accurately.
This is the information that will be used by the CFPB to identify any bad actors. Make sure that what you report is an accurate reflection of who and what you are. Otherwise, safe harbor or not, you may end up on the wrong side of a CFPB investigation.
Are you ready to HMDA?