Compliance Center: CFPB Releases Insight into Potential HMDA Charges

The Consumer Financial Protection Bureau has released a Fact Sheet that provides insight into changes the bureau is considering for the Home Mortgage Disclosure Act (HMDA).  The CFPB breaks the new requirements down into three different areas:

  • Requirements of the Dodd-Frank Act: In the Dodd-Frank Act, Congress directed the CFPB to update HMDA regulations by having lenders report specific new information that could alert regulators to potential problems in the marketplace. This includes: the length of the loan; total points and fees; the length of any teaser or introductory interest rates; and the applicant or borrower’s age and credit score.
  • Developments in the market: The CFPB is considering additional information that would give regulators a better view of developments in all segments of the housing market. The CPFB is considering asking financial institutions to include more underwriting and pricing information, such as the interest rate, the total origination charges, and the total discount points of the loan.
  • Monitoring access to credit: The CFPB is considering new requirements that would more accurately capture access to credit in the mortgage market. The CFPB is considering requiring institutions to include an explanation of rejected loan applications. The CFPB is also considering including whether the lender considered the loan to be a “Qualified Mortgage.” Additional information, such as the borrower’s debt-to-income ratio, also is being considered.

Because it can be cumbersome for lenders to collect and submit HMDA information, the CFPB is comprehensively reviewing reporting requirements. The CFPB is asking for feedback on ways it can:

  • Streamline reporting: Many financial institutions are collecting the same or similar data for their own processing, underwriting and pricing of loans, or for the sale of loans on the secondary market. The CFPB is considering methods to align the HMDA data requirements with well-established data standards already in use by a significant portion of the mortgage market.
  • Standardize the threshold: Currently, all banks, savings associations and credit unions that meet certain conditions must submit annual HMDA reports even if they make only a single loan. However, nonbank mortgage lenders may be required to report only if they make 100 or more loans and meet other conditions. The bureau is considering proposing a rule requiring banks and nonbanks to report if they make 25 or more loans in a year if they meet other conditions.
  • Improve data entry: In addition to seeking feedback through the SBREFA process, the CFPB is consulting with other federal agencies about improvements to the HMDA data reporting and disclosure process. One idea is to create web-based HMDA data-entry software so that financial institutions have more flexibility in reporting their information.

Question of the Week

Q: When opening an account for a minor, how does the credit union verify the minor’s identity?

If the minor opens the account himself, you can verify his ID using documentary methods such as a state-issued ID card, driver’s license, or work permit.  If these are not available, you can use non-documentary methods such as verification by an existing member or using public databases. If you have an adult opening an account for a minor, you must verify the ID of the adult, not the minor.  Either way, your BSA and CIP policy must specify what types of identification you will accept and under what circumstances.

Legal Briefs

National Credit Union Administration (NCUA)

The NCUA announced that it will be hosting a free webinar on Wednesday, Feb. 19, titled “Field of Membership Strategies for Federal Credit Unions.”

Consumer Financial Protection Bureau (CFPB)

The CFPB released a new mortgage data tool that individuals can use online to obtain basic mortgage statistics for counties and cities across the U.S.

The CFPB also announced that it is looking at different ways to increase HMDA reporting, including collecting more data, streamlining reporting, and making it easier for institutions to report data. (See story above.)

Federal Reserve Board (FRB)

The February 2014 issue of FedFocus is now available.

The FRB published a rule that would amend Reg CC to the Federal Register. The amendments impact the collection of checks and substitute checks, as the FRB tries to encourage the sending of return checks electronically.

Testimony was delivered by Gov. Daniel Tarullo to the Senate Committee on Banking, Housing and Urban Affairs regarding the Dodd-Frank Implementation.

Office of Foreign Assets Control (OFAC)

OFAC has updated the SDN list as of Feb. 7. The last update prior to this was Feb. 6.


Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Compliance News, NCUA.