CUNA Regulatory Comment Call

July 7, 2010

HMDA Hearings and Request for Comment

  • The Federal Reserve Board (Fed) will conduct four public hearings on potential revisions to Regulation C, the Home Mortgage Disclosure Act (HMDA). HMDA requires credit unions and others to collect and report data on home mortgage loans, home improvement loans, and applications that do not result in loan originations.

  • These hearings will take place on July 15, 2010 in Atlanta, August 5, 2010 in San Francisco, September 16, 2010 in Chicago, and September 24, 2010 in Washington, DC. Credit union representatives who recommended by CUNA will participate in these hearings.

  • The issues discussed during these hearings are part of an overall review of the HMDA rules. During this review, the Fed will consider whether certain data elements should be added, modified, or deleted. Although additional information may improve the usefulness of the HMDA data, the Fed also recognizes that this would increase compliance burdens and costs, as well as pose risks to consumer privacy.

  • In conjunction with these hearings, the Fed has requested public comment on the various issues that will be the subject of these hearings. After these hearings, a proposal may then be issued that incorporates changes that were addressed in these hearings and the comments received in response to this request.

  • Comments are due by August 20, 2010. Please submit your comments to CUNA by August 13, 2010.

Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Senior Vice President and Deputy General Counsel Mary Dunn at mdunn@cuna.coop and to Senior Assistant General Counsel Jeff Bloch at jbloch@cuna.coop; or mail them to Mary and Jeff c/o CUNA’s Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, Suite 600, Washington, DC 20004-2601. You may also contact us at 800-356-9655, ext. 6732, if you would like a copy of the request for public hearings. You may also access here.

QUESTIONS TO CONSIDER REGARDING THIS REQUEST FOR COMMENTS
(The Fed has specifically requested comment on these issues)

  • What, if any, additional data should be collected? What are the costs, benefits, and privacy issues associated with requiring lenders to report, for example: 1) underwriting data such as the borrower’s credit score, loan-to-value ratio, combined loan-to-value ratio (that includes both the loan and other debts), and the borrower’s debt-to-income ratio; 2) borrower’s age; 3) loan originator channel (whether the loan is originated directly by the lender or through a third-party, such as a broker or correspondent); and 4) rate spreads for all loans, instead of only for higher-priced loans, as currently required?











  • Should any existing data elements be modified? If so, how? For example, what are the costs, benefits, and privacy issues associated with requiring lenders to report total income, rather than income relied on by the lender? Do you believe that measuring total income in a way that generates consistent, meaningful data would be difficult since lenders may not collect information on applicants’ total income in all cases and do you believe that this information may be questionable since it may not be verified?











  • Should any existing data element be eliminated? If so, why?











  • Should mortgage brokers and non-lender loan purchasers be required to report HMDA data? What other types of institutions should be required to report?











  • Should any types of institutions be exempt from reporting?











  • Should the rules governing who must collect and report HMDA data be revised in other ways, such as making the threshold for nondepository lenders the same as for other types of lenders? How else should they be revised?











  • Currently, lenders must report information on home purchase loans, home improvement loans, and refinancing of home purchase loans. Should any other types of mortgage loans be reported? Should any types of mortgage loans currently being reported be excluded from reporting? Should the rules governing which mortgage loans are subject to reporting be revised in other ways? If so, how?











  • Regulation C currently requires lenders to collect and report data regarding requests under a preapproval program if the preapproval request is denied. Requests approved, but not accepted by the applicant, may be reported at the lenders option. A preapproval program is defined as a program when the lender, after a comprehensive review of the creditworthiness of the applicant, issues a written commitment to the applicant to extend a home purchase loan up to a specified amount, which is valid for a specific period of time. Do you use preapproval programs under this definition? Is there a benefit to requiring lenders to report on these programs? How could this definition be modified so that it is easier to apply and would make reporting more useful?











  • What are the most common compliance issues you face under HMDA and Regulation C? What parts of Regulation C would benefit from clarification or additional guidance? Are there technical issues regarding Regulation C that should be resolved?











  • Are there any emerging issues (technological or otherwise) likely to affect the usefulness and accuracy of HMDA data? Are there any other changes to Regulation C that the Fed should consider? For example, are there any obsolete provisions or provisions that pose undue or unnecessary burdens?











  • Other comments?











Eric Richard • General Counsel • (202) 508-6742 • erichard@cuna.com
Mary Mitchell Dunn • SVP & Deputy General Counsel • (202) 508-6736 • mdunn@cuna.com
Jeffrey Bloch • Assistant General Counsel • (202) 508-6732 • jbloch@cuna.com
Luke Martone • Senior Regulatory Counsel • (202) 508-6743 • lmartone@cuna.com
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