The Consumer Financial Protection Bureau (CFPB) issued a release on March 16, 2022, announcing modifications to its supervisory operations that expand its monitoring of discriminatory lending and servicing practices. The CFPB stated that it “will scrutinize discriminatory conduct that violates the federal prohibition against unfair practices” at banks and non-bank companies across the U.S. The [...]
Guidance on the Home Mortgage Disclosure Act (HMDA) provides instructions for how lenders should report each Loan Application Register (LAR) field. For most fields, the instruction is specific and leaves no room for differing interpretation or options for lenders to choose when reporting their LAR. For a handful of LAR fields, however, there is some [...]
The Consumer Financial Protection Bureau (CFPB) expressed in a February 4, 2022, blog post its concern that some appraisers may not be aware of the non-discriminatory laws affecting the appraisal industry. Further, the CFPB opined that The Appraisal Foundation (TAF), a non-governmental entity that sets appraisal standards, has not sufficiently addressed discriminatory prohibitions in its [...]
This week, the Consumer Financial Protection Bureau (CFPB) said it plans to review recent changes to the Home Mortgage Disclosure Act (HMDA) rules and has requested public input on those rules. The CFPB said in a statement Tuesday that it would evaluate the effectiveness of recent rule changes as a way to strengthen the agency’s [...]
Download This Article In two past Knowledge Center posts (Post 1 and Post 2), we discussed eight common errors that lenders encounter when satisfying reporting requirements under the Home Mortgage Disclosure Act (HMDA). The errors that we reviewed included: Failing to capture all HMDA-reportable transactions Reporting the incorrect loan amount Assigning the wrong geographies via [...]
The Justice Department has announced a settlement with Houston-based Cadence Bank to resolve allegations that the bank engaged in lending discrimination by ‘redlining’ predominantly Black and Hispanic neighborhoods in the Houston area. The Department alleged that the bank engaged in redlining between 2013 and 2017 by avoiding providing loans and other home mortgage services in majority-Black [...]
The U.S. Department of Housing and Urban Development (HUD) recently charged a California business for allegedly targeting Hispanic homeowners with illegal and discriminatory mortgage modification services. HUD said that The House Lawyer, based in Redwood City, California, collected fees from Hispanic borrowers for loan modification services prior to completing the services, a violation of California law, while [...]
Download This Article Withdrawn applications reflect an increasing proportion of non-approved first-lien mortgage applications as denials have become relatively less numerous. A decade ago, based on 2009 HMDA data, denials comprised just over one-half (53 percent) of non-approved first-lien applications. Denials fell to less than one-third (31 percent) of non-approvals a decade later. Over the [...]
On January 1, 2021, Congress passed the National Defense Authorization Act (NDAA), addressing a variety of defense and national security matters, including the most substantial and sweeping legislative reforms to US anti-money laundering (AML) and counter-terrorism financing (CFT) laws since the USA Patriot Act of 2001. The NDAA introduces these AML/CFT amendments and enhancements in [...]
Download This Article With the transition between presidential administrations, new regulations, and the ongoing effects from the pandemic and corresponding economic crisis, lenders are facing a dynamic environment in 2021 with respect to managing compliance risk under Fair Lending laws and the Community Reinvestment Act (CRA). There is another factor, however, receiving less attention but [...]
