CFPB Issues Proposal to Clarify Mortgage Data Collection Rules
the data collection is used as a safeguard against discriminatory lending practices
The Consumer Financial Protection Bureau (CFPB) has announced clarifications to policy that will help financial institutions comply with the 2015 updates to the Home Mortgage Disclosure Act (HMDA) rule.
"The Home Mortgage Disclosure Act shines a much-needed spotlight on the mortgage market, which is the largest consumer financial market in the world," said CFPB Director Richard Cordray. "Today's proposal reflects the Bureau's ongoing and substantive engagement with stakeholders in the marketplace, and will help industry meet its new reporting obligations."
The clarifications will give guidance to firms by making clear what information they are required to collect and report about their mortgage lending.
The HDMA requires many lenders to report information about the home loans for which they receive applications or that they originate or purchase. This allows the public and various regulators to monitor whether financial institutions are properly serving the housing needs of their communities and identify potential discriminatory lending tendencies.
The proposal contains a number of clarifications, technical corrections, and minor changes to the HMDA regulation. These include clarifying certain key terms, such as "temporary financing" and "automated underwriting system." The proposal would establish transition rules for reporting certain loans purchased by financial institutions. Another proposed change would facilitate reporting the census tract of a property, using a new geocoding tool the CFPB plans to provide online.