The Consumer Financial Protection Bureau ("CFPB" or "Bureau") has released a final rule that modifies the requirements of Regulation C, which implements the Home Mortgage Disclosure Act ("HMDA"), to amend: the types of institutions and transactions subject to the regulation; the types of data institutions are required to collect; and, the processes for reporting and disclosing collected data ("HMDA Rule"). These changes are significant in both scale and scope, and will require mortgage lending institutions subject to Regulation C to:
- Collect more data (25 new and 14 modified data points) on an expanded scope of loan transactions (to include most dwelling-secured transactions, with some exceptions), and to report that data through new web-based submission channels.
- Report and disclose the expanded HMDA dataset on a quarterly basis, when the lender meets the volume threshold identified in Regulation C (a combined total of 60,000 covered loans and applications, excluding purchased loans, in the preceding calendar year).
- Assess and upgrade, as needed, the capabilities of their compliance management systems to collect, validate, report, and disclose the expanded dataset on a timely basis, giving thought to policies, procedures, monitoring, corrective-action processes, and training, paying particular attention to data reporting issues, such as data integrity, systems constraints, manual reconciliations, resource constraints, analytical challenges, and governance requirements.
- Consider, from an internal perspective, managing and leveraging the expanded dataset to enhance other compliance functions (such as fair lending analysis) and safety and soundness concerns (such as those related to credit risk and regulatory reporting), and to consider, from an external perspective, the potential impact from heightened public scrutiny of more available key lending data.
Most of the new requirements will become effective January 1, 2018, with reporting beginning in 2019. Large-volume lenders must begin quarterly reporting in 2020.