Removing Barriers Blog

CUNA Sends Letter to CFPB on Burden of new HDMA Rule
Posted January 11, 2016 by CUNA Advocacy

Last week, we sent a regulatory comment letter responding to an OMB review of the CFPB's Information Collection Activities concerning the Home Mortgage Disclosure Act (Regulation C) (HMDA).The letter expressed our belief that the huge expansion of HMDA data beyond Dodd-Frank requirements is not necessary for the CFPB to carry out its mission, and shared our numerous concerns about the negative impact on credit unions.

The CFPB finalized the HMDA rule in October, adding requirements to report on a staggering 48 data fields, far more than the 17  required by law. While Congress did authorize the CFPB to collect 'such other information as the bureau may require,' it is unlikely this grant is an unbridled delegation to the CFPB to more than double the amount of express data points that Congress had indicated for the bureau to collect.

We are also concerned that the CFPB has failed to articulate what HMDA data will be made public. Dodd-Frank explicitly directs the CFPB to develop regulations to determine which data points will be made public.

Our letter expressed our view that CFPB only adopted a 'balancing test' to balance the importance of releasing the data to accomplish HMDA's public disclosure purposes against the potential harm to an applicant or borrower's privacy interest that may result from the release of the data without modification. Input solely on a nebulous balancing test is in fact a blatant disregard of the statutory requirement to provide regulations, in consultation with other banking regulatory agencies, to determine which data points will be public.

The letter argues that HMDA data under the old regime, and under the new rule, cannot establish discrimination, as is its stated intent. The reporting does not contain credit or employment history, assets or other key elements of pricing, nor does is contain credit union field of membership restrictions that can affect a lending decision.

We also asked for an extension of the compliance deadline to Jan. 1, 2018 with reporting commencing Jan. 1, 2019; an exemption for institutions issuing 500 covered closed-end loans and 1,000 covered open-end loans; and for a safe harbor period for good-faith efforts to comply. The CFPB announced Friday it is seeking feedback on resubmission of HMDA data, due to changes in the finalized rule. The bureau seeks comments on whether the resubmission guidelines for incorrect information, and when supervised institutions will be expected to correct and resubmit data.