The CFPB's Proposed HMDA Rule: "Getting It Right" in Light of Major Changes to HDMA
The Review of Banking & Financial ServicesWarren W. Traiger
The Consumer Financial Protection Bureau’s (the “Bureau” or the “CFPB”) proposed rule to amend Regulation C (the “HMDA Proposal”) to implement changes to the Home Mortgage Disclosure Act (“HMDA”) will drastically expand the amount of mortgage loan application data that lending institutions will be required to report to financial regulators and, potentially, to the public. The Bureau is acting pursuant to its authority under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), which transferred rulemaking responsibility for HMDA from the Federal Reserve Board (“FRB”) to the CFPB.
The proposed rule will double the number of data fields required to be reported under HMDA from 36 to 72 and is certain to result in heightened fair lending scrutiny for mortgage lenders. Moreover, the HMDA Proposal suggests that much of the data will become publicly available, raising significant concerns about the reputational risk that could result when that data suggest discrimination to the media or advocacy organizations.
Originally published in The Review of Banking & Financial Services; reprinted with permission.