HMDA Resubmission Schedule and Guidelines released by CFPB
New Home Mortgage Disclosure Act (HMDA) Resubmission Schedule and Guidelines, and factors the Consumer Financial Protection Bureau (CFPB) may consider when evaluating whether to pursue a public enforcement action for HMDA violations, are outlined in a new bureau release. There are also tips on how best to run an effective HMDA compliance system.
The resubmission guidelines detail the error thresholds that CFPB examination teams will use to determine when institutions should correct and resubmit their HMDA data.
"CFPB examination teams will use different guidelines when they conduct HMDA reviews at banks and nonbanks that have 100,000 or more mortgage loans to report," the bureau wrote. It noted that low error rates at larger institutions can reflect a larger number of HMDA data errors than similar errors at smaller institutions.
The new resubmission guidelines will apply to HMDA reviews that begin on or after January 18, 2014, the CFPB said.
Employee training, internal audits, and data reporting procedures are essential to effective HMDA compliance, the CFPB added.
Factors the CFPB may consider when determining whether or not to take enforcement actions include:
- The size of the financial institution or nonbank's mortgage lending activity;
- The institution's HMDA error rate;
- The history of previous HMDA supervisory activity, including the history of any violations; and
- Whether the institution self-identified or self-corrected any errors.
These factors may also be considered as the CFPB determines the size of a potential civil penalty, the bureau noted.