HMDA Implementation Lessons learned along the way
• New regulatory requirement to expand the rule currently in force to increase data gathering for the mortgage industry. AN • Dodd-Frank required the CFPB to pass these amendments. INTRO • The CFPB first published the HMDA rule in 2015. TO • The rule is effective Jan. 1, 2018. HMDA 2018
How does the rule compare to what financial institutions had to report before?
CHANGES TO EXEMPTIONS: THE • Increased loan volume threshold to 25 mortgage loans per year. Before, compliance was required if you CFPB originated just one mortgage per year. MADE • It used to be that institutions did not need to report for HELOCs. Now, reporting is required if you originate 500 SIGNIFICANT or more. CHANGES CHANGES TO DATA POINTS: • Affected 14 data points. IN INCREASED REPORTING: THREE • Covered institutions must now report 110 total data points. (That’s up from 39!) AREAS
How can an institution determine if it’s required to comply?
Step 1: Does your institution fit the definition of a depository or non-depository institution per the regulation? • Refer to the CFPB Institution Coverage Chart. • If you don’t fit the definition for either depository or non - depository institution, then you are exempt. THREE Step 2: Does your institution originate transactions that are covered by the rule? STEPS • Refer to the CFPB’s Transaction Coverage Chart . Step 3: If you are required to report, consult your mortgage partner to determine who handles reporting. • Refer to our resource here.
What parts of the rule most impacted you as our compliance officer?
Making sure all data points are properly reported required the most legwork. • Our loan origination system could not automate all data FROM points. • We created/implemented manual processes. A The regulation does not define “review.” COMPLIANCE • If a lender reviews a loan, they are required to report it under HMDA. OFFICER’S • In cases like this where a functional term is not defined in the regulation, we documented our definition for that term. This POINT allowed us to set our policy and procedure. OF VIEW
Who reports a mortgage transaction when one or more parties are involved?
• Only one institution reports a loan as an origination. • The institution that made the credit decision reports the loan REPORTING as an origination. (It doesn’t matter whether the loan closed in the institution’s name.) A • When no origination occurs – due to credit decision, withdrawal, or closed for incompleteness – an institution MORTGAGE must report when it reviews or makes a credit decision. (It does not matter whether the application came from an TRANSACTION applicant or from another institution, or whether another institution also reviewed and reported an action taken on the WITH same application.) ONE OR MORE PARTIES
What does this mean for me and my business with CU Companies?
• We will report all loans in which we make a credit decision. • For an origination, here's a breakdown of who reports by CU Companies mortgage channel: YOUR Delegated egated You report BUSINESS Corres espo pondent ndent CU Companies reports WITH Wholesale le CU Companies reports CU Retail il CU Companies reports COMPANIES
What else should financial institutions know about HMDA?
• Data is now submitted directly to the CFPB, even for 2017 reporting. Refer to the CFPB’s HMDA Rule Key Dates Timeline . • Data for 2017 will be submitted after Jan. 1 – after the new HMDA rule goes into effect. Data for 2017 will still be reported as required under the current rule. HMDA FYI’S
Answers to frequently asked questions about HMDA. CU COMPANIES’ Links to CFPB introduction videos. HMDA History of CFPB news released about RESOURCE HMDA. CENTER Find it at: cucompanies.com/hmda-resource-center (After Jan. 1, find it at myservion.com/hmda-resource- center)
Recommend
More recommend
