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CFPB issues filing guides for 2020 HMDA data
On September 25, the CFPB released the Filing Instructions Guide for HMDA data collected in 2020 that must be reported in 2021. The guide references changes to the submission process, and includes a reminder that, starting in 2020, “covered institutions that reported a combined total of at least 60,000 applications and covered loans in the preceding calendar year are required to report HMDA data quarterly. Instructions for quarterly reporting can be found in the Supplemental Quarterly Reporting Guide, which was issued the same day. The file format for submitting the HMDA data, along with the required data fields to be collected and reported, have not changed.
CFPB requests comments on using Tech Sprints
On September 18, the CFPB published a notice in the Federal Register seeking comments on the use of Tech Sprints—forums which gather “regulators, technologists, financial institutions, and subject matter experts from key stakeholders for several days to work together to develop innovative solutions to clearly-identified challenges”—as a means to encourage regulatory innovation and collaborate with stakeholders on forming solutions to regulatory compliance challenges. The Bureau notes that Tech Sprints have been successfully used by the U.K.’s Financial Conduct Authority, which has organized seven Tech Sprints since 2016, resulting in a pilot project on digital regulatory reporting. The Bureau is interested in using Tech Sprints to, among other things: (i) leverage cloud solutions and other developments that may reduce or modify the need for regulated entities to transfer data to the Bureau; (ii) continue to innovate the HMDA data submission process; (iii) identify new technologies and approaches that can be used by the Bureau to provide more cost-effective oversight of supervised entities; and (iv) reduce other unwarranted regulatory compliance burdens. Comments must be received by November 8.
CFPB updates HMDA webinars
On August 29, the CFPB updated two HMDA webinars to reflect amendments made by the Economic Growth, Regulatory Relief, and Consumer Protection Act, and the interpretive and procedural rule issued by the CFPB in August 2018. (Previous InfoBytes coverage on the amendments and the interpretive and procedural rule available here.) The Bureau also released a new HMDA webinar to provide an overview “on reporting certain application or covered loan features, pricing information, features of the property, and transaction indicators.”
FFIEC releases 2018 HMDA data; CFPB issues mortgage activity reports
On August 30, the Federal Financial Institutions Examinations Council released the 2018 Home Mortgage Disclosure Act (HMDA) data on mortgage lending transactions covering information submitted by financial institutions on or before August 7. The data will not remain static, but instead will be updated on an on-going basis to reflect late submissions and resubmissions. The data currently includes information on 12.9 million home loan applications, 7.7 million of which resulted in loan originations, and 2 million purchased loans. Observations on the data include: (i) the total number of originated loans decreased by roughly 12.6 percent; (ii) refinance originations decreased by 23.1 percent; (iii) the share of refinance loans to low- and moderate-income borrowers increased from 22.9 percent to 30 percent; and (iv) nondepository, independent mortgage companies accounted for 57.2 percent of first-lien owner-occupied home purchase loans (up from 56.1 percent in 2017).
On the same day, the CFPB also released two data point articles describing mortgage market activity based on data reported under HMDA. The first article presents a report providing a “first look” at mortgage application and origination trends within the 2018 HMDA data. The second article introduces a report introducing the “new and revised data points in the 2018 HMDA data” and discussing the Bureau’s initial observations on the mortgage market based upon those new or revised data points.
CFPB reopens comment period for certain aspects of HMDA rulemaking
On July 31, the CFPB announced that it is reopening the comment period for certain aspects of its May Notice of Proposed Rulemaking (covered by InfoBytes here), which would permanently raise coverage thresholds for collecting and reporting data about closed-end mortgage loans and open-end lines of credit under the HMDA rules. The comment period originally closed on June 12, but to allow for the submission of comments that reflect the national loan level dataset for 2018 (which will be released “later this summer”), the Bureau is reopening the comment period for certain aspects of the May proposal. Specifically, the Bureau is reopening comments on (i) the proposed changes to the permanent coverage threshold for closed-end mortgage loans, which would permanently raise the reporting threshold from 25 loans in each of the two preceding calendar years to either 50 or 100 closed-end loans in each of the preceding two calendar years; (ii) the proposed changes to the permanent coverage threshold for open-end lines of credit, which would extend the temporary threshold of 500 loans for calendar years 2018 and 2019 to January 1, 2022, and then permanently lower the threshold to 200 open-end lines of credit after that date; and (iii) the appropriate effective date for any change to the closed-end coverage threshold. Comments are due by October 15.
Democratic Representatives demand rescission of CFPB’s permanent HMDA threshold proposal
On June 11, House Financial Services Committee Chairwoman Maxine Waters and 64 other Democratic House members sent a letter to the CFPB urging rescission of its May proposal to permanently raise the coverage thresholds for collecting and reporting HMDA data and to retire its HMDA Explorer tool. (Covered by InfoBytes here.) In the letter, members argue that recent data “showed widespread discrimination in bank lending” and that redlining continues to be a pervasive problem. They note that HMDA data is an important tool for public officials to understand access to credit in their communities, and that the Bureau’s proposal would exempt “about half of lending institutions from reporting data about closed-end mortgages … [and] sacrifice information that can make a difference in the lives of creditworthy, lower-income consumers.” The members also ask for information regarding the new Federal Financial Institutions Examination Council (FFIEC) query tool that is to be used as a replacement for the HMDA Explorer tool and Public Data Platform API that the Bureau plans to retire, as previously covered by InfoBytes here.
CFPB publishes spring 2019 rulemaking agenda
On May 22, the Office of Information and Regulatory Affairs released the CFPB’s spring 2019 rulemaking agenda. According to a Bureau blog post, the information presented represents regulatory matters it “reasonably anticipates having under consideration during the period of May 1, 2019, to April 30, 2020.” The rulemaking activities include implementing statutory directives mandated in the Economic Growth, Regulatory Relief, and Consumer Protection Act (the Act), continuing certain other rulemakings previously outlined in the Bureau’s fall 2018 agenda (covered by InfoBytes here), as well as considering future projects and requests for information.
Key rulemaking initiatives include:
- Property Assessed Clean Energy Loans (PACE): On March 4, the Bureau published an advanced notice of proposed rulemaking (ANPR) and request for comments in response to Section 307 of the Act, which amended TILA to mandate the CFPB propose regulations related to PACE financing. The regulations must carry out the purposes of TILA’s ability-to-repay requirements, and apply TILA’s general civil liability provisions for violations. (InfoBytes coverage here.)
- Remittance Transfers: On April 25, the Bureau issued a request for information (RFI) on two aspects of the Remittance Rule that require financial companies handling international money transfers, or remittance transfers, to disclose to individuals transferring money the exact exchange rate, fees, and the amount expected to be delivered. The RFI seeks information related to the expiration of the temporary exception and whether to propose changing the number of remittance transfers a provider must make to be governed by the rule. (InfoBytes coverage here.)
- HMDA/Regulation C: On May 2, the Bureau issued a notice of proposed rulemaking (NPRM) to raise permanently coverage thresholds for collecting and reporting data about closed-end mortgage loans and open-end lines of credit under the HMDA rules. Specifically, the NPRM would raise permanently the reporting threshold for closed-end mortgage loans from 25 loans in each of the two preceding calendar years to either 50 or 100 closed-end loans in each of the preceding two calendar years. (InfoBytes coverage here.)
- Debt Collection Rule: On May 7, the Bureau issued a NPRM to amend Regulation F, which implements the FDCPA, covering debt collection communications and consumer disclosures and addressing related practices by debt collectors. The Bureau reports that the NPRM “builds on research and pre-rulemaking activities regarding the debt collection market, which remains a top source of complaints.” (InfoBytes coverage here.)
- Payday Rule/Delay of Compliance Date: On February 6, the Bureau released two NPRMs related to certain payday lending requirements under the CFPB’s 2017 final rule covering “Payday, Vehicle Title, and Certain High-Cost Installment Loans” (the Rule). The first proposal would rescind portions of the Rule related to ability-to-repay underwriting standards for payday loans and related products scheduled to take effect later this year, while the second proposal would delay the compliance date for those same provisions for fifteen months. The Bureau anticipates it will issue a final rule concerning the compliance date this summer and a final determination on reconsideration thereafter. (InfoBytes coverage here.)
Long term priorities include rulemaking addressing (i) consumer reporting; (ii) amendments to FIRREA concerning automated valuation models; (iii) disclosure of records and information; (iv) consumer access to financial records; (v) Regulation E modernization; (vi) rules to implement the Act, concerning various mortgage requirements, student lending, and consumer reporting; and (vii) clarity for the definition of abusive acts and practices.
CFPB proposes permanent HMDA thresholds
On May 2, the CFPB issued a Notice of Proposed Rulemaking (NPRM), which would permanently raise coverage thresholds for collecting and reporting data about closed-end mortgage loans and open-end lines of credit under the HMDA rules. Specifically, the proposal would permanently raise the reporting threshold for closed-end mortgage loans from 25 loans in each of the two preceding calendar years to either 50 or 100 closed-end loans in each of the preceding two calendar years. As previously covered by InfoBytes, the CFPB temporarily increased the threshold for open-end lines of credit from 100 loans to 500 loans for calendar years 2018 and 2019. The current proposal would extend that temporary threshold to January 1, 2022, and then permanently lower the threshold to 200 open-end lines of credit after that date. Lastly, the proposal incorporates, with minor adjustments, the interpretive and procedural rule issued in August 2018 (2018 Rule), which implemented and clarified the HMDA amendments included in Section 104(a) of the Economic Growth, Regulatory Relief, and Consumer Protection Act (previously covered by InfoBytes here). The proposal includes additional interpretive information related to the partial exemptions in the 2018 Rule, including how the partial exemption rules apply after a merger or acquisition. The Bureau is proposing that these changes take effect January 1, 2020. Comments on the NPRM must be received within 30 days of publication in the Federal Register.
The Bureau also issued an Advance Notice of Proposed Rulemaking (ANPR) seeking information on the costs and benefits of reporting certain data points under HMDA. Additionally, the ANPR also seeks information about the requirement that institutions report certain commercial-purpose loans made to a non-natural person and secured by a multifamily dwelling. Comments on the ANPR must be received within 60 days of publication in the Federal Register.
Democratic senators concerned with CFPB retiring HMDA search tool
On April 29, nine Democratic Senators, led by Sherrod Brown (D-Ohio), wrote to the CFPB expressing “deep concern” regarding the Bureau’s plan to retire its tools for public exploration of HMDA data—HMDA Explorer Tool and the Public Data Platform API. In the letter, the Senators argue that retiring the tools with no plan for adequate replacements “threatens to undermine the statutory purposes of HMDA and does not live up the commitments to transparency and accountability” that Director Kraninger promised to uphold during her nomination hearing. The Senators cite to the Bureau’s decision to move the Office of Fair Lending and Equal Opportunity from the Supervision and Enforcement section to the Office of the Director and argue that “[r]reductions in available data and its accessibility, combined with weakened [fair lending] enforcement, is a disservice to the consumers the CFPB was created to protect.” The letter urges the CFPB to reverse course and requests that the Bureau provide a “detailed briefing” on the decision by May 10.
In the notice regarding the tools’ retirement, the Bureau states that the FFIEC “will publish a query tool for the 2018 data in the coming months.”
CFPB and Federal Reserve update HMDA examination procedures; CFPB updates ECOA baseline review procedures
On April 1, the CFPB and the Federal Reserve Board (Federal Reserve) issued revisions to the HMDA examination procedures covering data collected since January 1, 2018, under the HMDA amendments issued by the Bureau in October 2015 and August 2017, as well as section 104(a) of the Economic Growth, Regulatory Relief, and Consumer Protection Act (implemented and clarified by the 2018 HMDA Rule, which was covered by InfoBytes in August 2018 here.) According to the Federal Reserve’s CA 19-5, the HMDA examination updates include, (i) Narrative, Examination Objectives, and Examination Procedure sections that were developed by the Task Force on Consumer Compliance of the FFIEC; (ii) Review of Compliance Management System, Examination Conclusions and Wrap-Up, and Examination Checklist sections that were developed in consultation with the FDIC and the OCC; and (iii) sampling, verification, and resubmission procedures. With regard to HMDA data collected prior to January 1, 2018, institutions will continue to be examined according to the interagency HMDA examination procedures “transmitted with CA 09-10 and the HMDA sampling and resubmission procedures transmitted with CA 04-4.”
Additionally, in April, the CFPB also released updated ECOA baseline review procedures. The procedures consist of five modules: (i) Fair Lending Supervisory History; (ii) Fair Lending Compliance Management System (CMS); (iii) Fair Lending Risks Related to Origination; (iv) Fair Lending Risks Related to Servicing; and (v) Fair Lending Risks Related to Models. According to the Bureau, all exams will cover the Fair Lending CMS module and additional modules will be assigned depending on the scope of examination.