CFPB Warns Financial Institutions About Potential Mortgage Lending Reporting Failures

The agency has put 44 mortgage lenders and brokers on notice that they may be required to report mortgage data

Home mortgage loan application
Image: Pexels
October 31, 2016

The Consumer Financial Protection Bureau (CFPB) is issuing warning letters to 44 mortgage lenders and mortgage brokers. The Bureau says that is has information that appears to show they may be required to collect, record, and report data about their housing-related lending activity, and that they may be in violation of those requirements.

"Financial institutions that fail to report mortgage information as required make it harder to identify and address discriminatory lending," said CFPB Director Richard Cordray. "No mortgage lender that is required to report their loan data can avoid this responsibility."

The Home Mortgage Disclosure Act (HMDA), which was originally enacted in 1975, requires many financial institutions to collect data about their housing-related lending activity, including home purchase loans, home improvement loans, and refinancings that they originate or purchase, or for which they receive applications.

Annually, these financial institutions must report to the appropriate federal agencies and make the data available to the public. The public and regulators can use the information to monitor whether financial institutions are serving the housing needs of their communities, to assist in distributing public-sector investment so as to attract private investment to areas where it is needed, and to identify possible discriminatory lending patterns.

According to the CFPB, this data transparency helps to ensure that financial institutions are not engaging in discriminatory lending practices or failing to meet the credit needs of the entire community, including low- and moderate-income neighborhoods. Financial institutions that avoid their responsibility to collect and report mortgage loan data hinder regulatory efforts to enforce fair lending laws.

The CFPB says that it identified the 44 companies by reviewing available bank and nonbank mortgage data. The warning letters flag that entities that meet certain requirements are required to collect, record, and report mortgage lending data. The letters say that recipients should review their practices to ensure they comply with all relevant laws.

The companies in question are encouraged to respond to the CFPB to advise if they have taken, or will take, steps to ensure compliance with the law. They can also tell the Bureau if they think the law does not apply to them. The CFPB, in sending these letters, made no determination that any legal violation has, in fact, occurred.

In October 2015, the CFPB finalized a rule updating the reporting requirements of the Home Mortgage Disclosure Act regulation. The rule will improve the quality and type of data that is collected and reported, including shedding more light on consumers' access to credit. Most of the provisions of the final rule will take effect on January 1, 2018.

In October 2013, the CFPB released a bulletin putting mortgage lenders on notice about the importance of submitting correct mortgage loan information.

For mortgage loan questions or to submit a complaint, consumers can contact the CFPB at (855) 411-2372.

Get Connected with Consumer Connections

Stay up-to-date about issues that really matter! Get the Consumer Connections newsletter!

We're committed to providing you with information you need to make you a better, more informed consumer. Whether it's a vehicle recall, a product recall, or a new scam, we feature it in Consumer Connections.

So why not give it a try? Go on. All of your friends are doing it. It's completely free and comes just once a week.

So you're finally ready to trade in your current car for a new one! Congratulations on such an important step. If you've never bought a new car before, you may know nothing about the process. To begin with, there are a number of things you should do to get ready to buy the car before you ever step on the dealership lot.

Have you ever noticed that your bank account somehow had 'extra' money in it even though you knew for a fact it wasn't yours? If so, you are not alone. It happens more often than you would think. All it takes is for a bank teller to type in one wrong number at the time a deposit is being made.

Great rates do exist. But even if you are offered a low interest car loan, you can probably save more money by accepting a slightly higher rate and using rebates or other incentives or by getting your own financing and taking the rebates and incentives.

Many people feel like they just can't get ahead when it comes to money. What you may not know is that saving during tax season can start you on the path to financial security. We urge you to take advantage of tax season to prepare for unexpected emergencies or plan for the future. Here are some tips to help get started.