HMDA preparers are very busy getting ready for two new life-changing events:
- Using a new technology from the CFPB to file 2017 data which has not yet been released.
- Preparing their data collection for 2018 for the newly added or changed fields.
The CFPB just released additional documentation this month to help the preparers get ready.
Updates in July are:
- Modifications have been made to the Technology Preview
- Filing Instructions Guide for data collected in 2017
- Filing Instructions Guide for data collected in or after 2018
- Frequently Asked Questions (FAQs)
The CFPB outlines the steps necessary to use the system and the steps you will need to take to file your company data. It is important to keep in mind that the validation feature will require a filer to submit data and likely clean it up before the system will take it. This means that last minute filings may result in data being submitted late if your data is not corrected in the proper time frame.
There are all sorts of tools and documentation available in the resource area, for the filers and their technology support teams.
The filing instructions update includes documentation for either the 2017 filing or the 2018 filing. As noted, the data that is required in 2017 are the presently collected fields. However, in 2018 those fields double! This means that your LOS systems or database of record systems need to be able to pull the new information. From there the data will need to be converted to HMDA coding in order to be acceptable. Certainly, this will be a major challenge for many lenders.
As with all guidance, the FAQ document is continually updated as questions get asked and answered about the process. Be sure to keep the newest version on hand in order to access it when you have a question.
HMDA Loan Scenarios
The CFPB issued HMDA Loan Scenarios dated July 2017 that gives the lender hypothetical examples and how those examples would ideally be filed. The scenarios are verbally described using “Bold” words to identify the data that would need to be extracted. Then the examples show you the data mapping that would need to occur. This is a great outline for Project Managers assigned to HMDA.
You can get access to the updates by clicking here!
Banks and Credit Unions-Home Equity Lines of Credit Proposal
If you are a small bank or credit union, you may have concerns about the reporting burden of HMDA when offering Home Equity Lines of Credit. The present rule requires you to submit your data if you do 100 or more. However, a proposal was published July 14, 2017, that would increase that limit to 500 or more. This would reduce the filing burden placed on small institutions but would still collect about 75% of the home equity line of credit market. The proposal is only open for comment until July 31, 2017, so if you have an opinion submit it prior to that date.
To comment on the proposal or read it, click here!