The HMDA Data “Getting it Right” is the thought, hope, and prayer of all lenders and regulators. The reality is that less than 50% of the HMDA data collected is correct now, and that is before the regulators doubled the fields that need to be collected. So 2018 data collection should be great fun for all!
The CFPB has told us that they have gone to great efforts to ensure that transmitting data required by HMDA will be easier, more efficient and will result in a higher degree of accuracy. For lenders, I hope that this is true because the AI (Artificial Intelligence) that is going to evaluate this data is going to look at this data as gospel. If you do not know your company “data story” which the expanded set of data will tell about your company, I strongly recommend that you test this out by running analytics on your 2016 data with the expanded set. Surprises next year are never in your best interests. It is much smarter to search for any patterns of practice that may be problematic now, and then put strategies in place to fix it this year, versus waiting for a regulator to find them and be blindsided by your data story.
The bottom line is this. Someone in your company needs to be exclusively focused on HMDA this year and parse through this document over and over again to actually “get it right” so that come 2019 you are not dealing with the tragedy of having a years worth of data that is incorrect. Now is the time to evaluate, test and work through any systemic issues and this booklet along with the plethora of tools on the CFPB site should help you pin that down. For the compliance folks, make sure that you document the due diligence your company has taken to implement the new HMDA data requirements. In an exam, if an examiner has an issue with your data or methods you can demonstrate the levels of detail that you went through to actually get it right. You will likely still have to fix it, but you will also likely have more leniency for the things you did not do well.
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