A voluntary assessment of its Home Mortgage Disclosure Act (HMDA) rule – covering everything from the 2015 rule through last year’s revisions – is being undertaken by the Consumer Financial Protection Bureau (CFPB), which is inviting input to this effort until Jan. 21, 2022, according to a request for information (RFI) published Monday in the Federal Register.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) requires that the bureau conduct an assessment of any significant rule or order and report on it within five years of its effective date. It must invite public comment on recommendations for modifying expanding, or eliminating the rule/order before publishing a report on the assessment.
This assessment, the bureau said, is voluntary since the bureau has determined that the HMDA rule does not meet the definition of a “significant” for purposes of the Dodd-Frank Act, but it will conduct it in accordance with the statute’s provisions for required assessments.
That said, it noted that this assessment will address the 2015 HMDA final rule and the subsequent HMDA rules issued in 2017, 2018, 2019, and 2020. Given the difficulty in isolating the different effects of the 2015 rule and subsequent rules, it said it has decided that considering all of them together “will facilitate a more meaningful assessment” of the rule.
Since the 2015 rule, the CFPB notes that it has revised the institutional and transactional coverage thresholds that determine whether financial institutions are required to collect, record, and report any HMDA data on closed-end mortgage loans or open-end lines of credit; and published a study on thresholds that analyzed differences in lending patterns for lenders below and above the 100-loan closed-end threshold set by the 2020 HMDA final rule.
The bureau said that to assess the effectiveness of the HMDA rule, it intends to focus its evaluation on: (1) Institutional coverage and transactional coverage; (2) data points; (3) benefits of the new data and disclosure requirements; and (4) operational and compliance costs. It said it is incorporating into the assessment all rules that implicate calendar-year HMDA data beginning with data collected in 2018 through data collected in 2021.