Agency dials back on HMDA data error penalties, signals reconsideration of reporting requirements ahead

Penalties for errors won’t be assessed for Home Mortgage Disclosure Act (HMDA) data collected in 2018 – and new rulemaking reconsidering aspects of 2015 HMDA reporting rules is coming, the federal consumer protection bureau said Thursday.

In a public statement, the Consumer Financial Protection Bureau (CFPB) said it does not intend to require data resubmission unless data errors are material, nor will it assess penalties with respect to errors for data collected in 2018 and reported in 2019. The agency said it also intends to open a rulemaking to reconsider the HMDA rules, “such as the institutional and transactional coverage tests and the rule’s discretionary data points.”

The CFPB statement noted that, under a rule adopted in 2015, financial institutions are required to collect and report additional mortgage information beginning on Jan. 1, 2018. In August 2017, the agency said, it issued a final rule making technical corrections, clarifying certain reporting requirements, and increasing the threshold for collecting and reporting data on home equity lines of credit for two years.

“The Bureau recognizes the significant systems and operational challenges needed to meet the impending requirements under the rule,” the statement reported. “Accordingly, 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 agency said that, accordingly, collection and submission of the 2018 HMDA data will “provide financial institutions an opportunity to focus on identifying any gaps in their implementation of the additional requirements and making improvements in their HMDA compliance management systems for future years.”

It added that the bureau expects that any supervisory examinations of 2018 HMDA data will be diagnostic, to help institutions identify compliance weaknesses, and will credit good-faith compliance efforts.

Regarding reconsideration of the 2015 rules, the statement noted that its potential rulemaking may re-examine lending-activity criteria that determine whether institutions are required to report mortgage data. “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,” the statement added.

CFPB said that for data collected this year, financial institutions will submit their data in 2018 under the current Regulation C. Further, for this year’s data, institutions will submit data using the Bureau’s new HMDA Platform, which will be used to upload financial institutions’ loan and application registers, review edits, certify the data, and submit the data for the filing year, the agency stated.

CFPB Issues Public Statement On Home Mortgage Disclosure Act Compliance