Washington Federal Bank, N.A., already under a 2013 consent order addressing violations of Home Mortgage Disclosure Act (HMDA) reporting requirements, must pay a $200,000 civil money penalty and beef up its compliance management related to later violations under a consent order announced Tuesday by the Consumer Financial Protection Bureau (CFPB).
In the new consent order, the CFPB said that Washington Federal Bank, headquartered in Seattle, Wash., violated HMDA, its implementing regulation (Regulation C), and the Consumer Financial Protection Act of 2010 (CFPA) by failing to report accurate data related to mortgage loan applications in 2016 and 2017.
The bank reported HMDA data for more than 7,000 mortgage applications each of those years, the bureau said, which pointed to “significant” errors and said some samples had error rates as high as 40%.
The agency said it found that the errors in the bank’s 2016 HMDA data were caused by a lack of appropriate staff, insufficient staff training, and ineffective quality control, and that the errors in its 2017 HMDA data were directly related to weaknesses in Washington Federal’s compliance-management system. The bureau said weaknesses were specifically found in board and management oversight, monitoring, and policies and procedures.
“These significant errors in reported mortgage-application data violated Regulation C and HMDA,” the CFPB said. “These violations also constituted violations of the CFPA.”