HMDA Alert

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HMDA 2020

Now that you have filed your 2019 Home Mortgage Disclosure Act (“HMDA”) data, it is time to focus on 2020. The CFPB has issued the new 2020 Filing Instructions Guide (“FIG”) for submissions and data collection which can be found on the FFIEC website.  The 2020 updates incorporate changes to the HMDA Rule issued by the Consumer Financial Protection Bureau in October 2019.  The 2020 FIG can be found at https://www.ffiec.gov/hmda/guide.htm

While there are no substantial changes as to how you compile and submit your data, it is important to point out that we are seeing regulators requiring resubmissions and rescrubbing of HMDA data if it is not completed correctly. If you struggled with compiling and scrubbing last year’s HMDA data, Regulatory Solutions is here to help. Using our proprietary HMDA software, we compare your source documents in the loan file to the data points recorded on the HMDA LAR and provide you with an exception report detailing data points which need correction.   Contact us today to begin your 2020 HMDA LAR Data Scrub.

HMDA – Getting it Right 2020

The Federal Financial Institutions Examination Council (FFIEC) issued the 2020 “A Guide To HMDA Reporting: Getting it Right!”.  This guide is to be used for HMDA Submissions due March 1, 2021.  Culp QC, using its proprietary HMDA Software, has scrubbed over 9,000 HMDA loans/applications for financial institutions comparing the data on their 2019 and 2018 HMDA LARs to source documentation.  Do not wait until 2021 to begin your HMDA scrub, contact Culp QC today.  Let us provide your HMDA scrubs on either a monthly or quarterly basis so next year you will be ready to submit your HMDA LAR.   The 2020 “A Guide To HMDA Reporting: Getting it Right!” can be accessed at https://www.ffiec.gov/hmda/guide.htm

HMDA Final Rule Update (10-19)

On October 10, 2019, the CFPB issued a final rule that could affect your HMDA reporting for 2020. The first part of the rule extends the 500 threshold for open-end lines of credit until January 1, 2022. This means that institutions that originate fewer than 500 open-end lines of credit in the two preceding calendar years will not be required to report these lines of credit on their 2020 and 2021 LARS.

This final rule also incorporates the partial exemptions that were laid out in EGRRCPA into Regulation C. It also incorporates clarifications that smaller institutions have encountered when collecting their data to comply with the partial exemptions. Such as, whether a partial exemption applies after a merger or acquisition.

A copy of the final HMDA rule can be found below.

https://files.consumerfinance.gov/f/documents/cfpb_hmda_final-rule-2019.pdf

At Regulatory Solutions, we have developed HMDA software in order to complete full HMDA scrubs, including for those who qualify for partial exemptions.

HMDA Scrub Sample Size

What percentage of loans or applications on the HMDA LAR should I scrub?

This is a question we get asked quite often and my response is that you should look to the percentage examiners scrub. The Federal Financial Institutions Examination Council’s (FFIEC) HMDA Examiner Transaction Testing Guidelines (Guidelines) describe the validation process which examiners use and the circumstances in which examiners may direct institutions to correct and resubmit HMDA data.  The examiners select a random sample of loans/applications to test using the following sample sizes and thresholds as indicated in the Guidelines at https://files.consumerfinance.gov/f/documents/201708_cfpb_ffiec-hmda-examiner-transaction-testing-guidelines.pdf:

 Total Sample Size (A) Initial Sample Size (B) Initial Sample Threshold (C) Resubmission Threshold (D)
# %
25-50  30* 15 2 3  10.0*
51-100 30 20 2 3 10.0
101-130 47 29 2 3 6.4
131-190 56 29 2 3 5.4
191-500 59 30 2 3 5.1
501-100,000 79 35 2 4 5.1
100,001+ 159 61 2 4 2.5

*If less than 30 LAR lines, the institution should use the full sample size and the resubmission threshold remains at 3.

Let us scrub your HMDA data against source documents and provide you with an exception-based report indicating the percentage of errors by data point. You select your sample size either using the Guidelines or a certain percentage of HMDA loans/applications.  Contact us today to discuss your HMDA scrub.

CFPB Proposed Rule for HMDA Reporting Requirements

The CFPB issued a proposed rule on May 2, 2019 that would change the HMDA reporting requirements and could have a significant impact on smaller financial institutions. The proposed rule would increase the closed-end coverage threshold from 25 to 100 loans originated in the previous two years. Additionally, it proposes to extend the current open-end threshold of 500 lines of credit until January 1, 2022. The proposed rule would also incorporate new interpretations and procedures into Regulation C. If this were to become part of the HMDA regulation, it would not take effect until January 1, 2020.

https://www.consumerfinance.gov/policy-compliance/rulemaking/rules-under-development

 

Guide to HMDA Reporting: Getting it Right!

The FFIEC has released the 2019 edition of the “Guide to HMDA Reporting: Getting it Right!” which is available at https://www.ffiec.gov/hmda/.  The new edition contains information regarding the amendments made to HMDA by the Economic Growth, Regulatory Relief, and Consumer Protection Act and updated HMDA interpretive and procedural rules issued by the Consumer Financial Protection Bureau.  2019 is the year to Get it Right!  Regulatory Solutions has developed proprietary HMDA scrub software and has the expertise to scrub your HMDA data on a monthly or quarterly basis.  Our HMDA scrubs compare your HMDA LAR to source documents. An exception report is issued to enable you to make corrections and a summary of exceptions is provided to assist you in addressing any systemic issues.  Contact Regulatory Solutions today to begin your HMDA Scrubs.