HMDA Implementation Lessons learned along the way New regulatory - - PowerPoint PPT Presentation

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.

• Dodd-Frank required the CFPB to pass these

amendments.

• The CFPB first published the HMDA rule in 2015.
• The rule is effective Jan. 1, 2018.

AN INTRO TO HMDA 2018

How does the rule compare to what financial institutions had to report before?

CHANGES TO EXEMPTIONS:

• Increased loan volume threshold to 25 mortgage loans

per year. Before, compliance was required if you

• riginated just one mortgage per year.
• It used to be that institutions did not need to report for
• HELOCs. Now, reporting is required if you originate 500
• r more.

CHANGES TO DATA POINTS:

• Affected 14 data points.

INCREASED REPORTING:

• Covered institutions must now report 110 total data
• points. (That’s up from 39!)

THE CFPB MADE SIGNIFICANT CHANGES IN THREE 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.

Step 2: Does your institution originate transactions that are covered by the rule?

• 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.

THREE STEPS

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

points.

• We created/implemented manual processes.

The regulation does not define “review.”

• If a lender reviews a loan, they are required to report it under

HMDA.

• In cases like this where a functional term is not defined in the

regulation, we documented our definition for that term. This allowed us to set our policy and procedure.

FROM A COMPLIANCE OFFICER’S POINT OF VIEW

Who reports a mortgage transaction when

• ne or more parties are involved?

• Only one institution reports a loan as an origination.
• The institution that made the credit decision reports the loan

as an origination. (It doesn’t matter whether the loan closed in the institution’s name.)

• When no origination occurs – due to credit decision,

withdrawal, or closed for incompleteness – an institution must report when it reviews or makes a credit decision. (It does not matter whether the application came from an applicant or from another institution, or whether another institution also reviewed and reported an action taken on the same application.)

REPORTING A MORTGAGE TRANSACTION WITH 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 BUSINESS WITH CU COMPANIES

Delegated egated You report Corres espo pondent ndent CU Companies reports Wholesale le CU Companies reports Retail il CU Companies reports

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

CU COMPANIES’ HMDA RESOURCE CENTER

Answers to frequently asked questions about HMDA. Links to CFPB introduction videos. History of CFPB news released about HMDA.

Find it at: cucompanies.com/hmda-resource-center (After Jan. 1, find it at myservion.com/hmda-resource- center)