Implementing revised HMDA rules is a monumental task by any measure. The first phase is to determine scope and coverage, collect the data, and submit it to the CFPB. The second phase involves analyzing the data and determining the story told by that data.
The scope of institutions covered by the revised rules has changed. The types of loans that are HMDA-reportable under the revised rules has changed. The list of information that must be collected for each reported loan has changed. The rules for submitting the data in a timely fashion to the CFPB has changed a small amount. These changes during Phase I will keep all HMDA reporting institutions very busy from now until the 2018 Data is submitted in early 2019.
Phase II, determining the story told by your HMDA data, begins in early 2018. As your institution begins to collect the revised data it should analyze that data to detect any adverse trends.
Once published the revised HMDA disclosure format will reveal new areas of concern, such as:
- With the collection of the applicant’s age, we expect tables that explore the issue of age discrimination.
- With the addition of TRID-related data, we expect expanded data pricing discrimination based on an expanded base of data, such as discount points. Will the TRID data also be used to identify TILA violations?
- With the addition of race and ethnicity subcategories, we expect the disclosure will consider discrimination within categories such as a Japanese-owned bank discriminating against a Chinese applicant.
The CFPB has not revealed the format of the revised HMDA disclosure form or provided a date by which the disclosure format will become available. Once published, every HMDA-reporting institution will need to shift part of their attention to Phase II.
It would be incompetent to initiate all of these changes without determining in advance how all of the new information would be used. We would prefer to believe that the CFPB is not incompetent, so we encourage them to release the format information that was developed several years ago. The industry needs that information sooner rather than later.