On October 15, 2015, the Consumer Finance Protection Bureau (CFPB) finalized its new rule that changes the data and reporting requirements of financial institutions that report their mortgage data under the Home Mortgage Disclosure Act (HMDA).
Under the new rule, which is effective on January 1, 2018, HMDA reporters must include several new variables for each application, such as applicant age, credit score, property value, loan term, interest rate, debt-to-income ratio and discount points. In an effort to ease the reporting requirements of smaller institutions, a new loan volume threshold will be established that will reduce the overall number of HMDA reporters by an estimated 22 percent. In addition to these changes, open-end lines of credit will now be considered reportable activity.
In its announcement of the new rule, the CFPB also discussed its collaboration with other agencies to modernize the HMDA reporting process:
The Bureau is working with the other members of the Federal Financial Institutions Examination Council and the Department of Housing and Urban Development to modernize the HMDA data submission process to collect information more efficiently. Feedback from financial institutions and their vendors has helped the Bureau identify ways to reduce the burden of this information collection on industry. The Bureau has completed a pilot of a new web-based tool to collect HMDA information more efficiently. Industry stakeholders have tested the pilot and the feedback has been very positive – the new tool is simple and easy to use. Implementing this technology will reduce manual and paper-based systems currently used by regulators and reporting financial institutions.
The CFPB anticipates these technological improvements will reduce the compliance costs associated with HMDA reporting.