On Tuesday, November 16, 2021, the Consumer Financial Protection Bureau (“CFPB”) issued a request for information seeking input on rules implementing the Home Mortgage Disclosure Act (“HMDA”), to evaluate whether the rules currently meet HMDA’s stated goals. HMDA, originally enacted in 1975, requires qualifying lenders to collect, report, and disclose data about originations and purchases of mortgage loans, as well as mortgage loan applications that do not result in originations. The CFPB has stated that the purpose of HMDA is to “provide the public with loan data that can be used: (i) to help determine whether financial institutions are serving the housing needs of their communities; (ii) to assist public officials in distributing public-sector investment so as to attract investment to areas where needed; and (iii) to assist in identifying possible discriminatory lending patterns and enforcing antidiscrimination statutes.” (CFPB HMDA Rule Assessment, Consumer Financial Protection Bureau 7‒8). The Request for Information follows an August 2021 HMDA report and a July 2021 CFPB analysis, which found discriminatory lending patterns directed towards Black, Hispanic, and Asian American Pacific Islander applicants.
The CFPB’s evaluation will focus on the changes made to HMDA by the 2015 HMDA Final Rule, issued in October 2015, which expanded the types of data reported by lenders in order to improve overall market information and to help monitor fair lending compliance. In particular, the Bureau has stated that it seeks information regarding:
- institutional coverage and transactional coverage;
- data points;
- benefits of new data and disclosure requirements; and
- operational and compliance costs.
The CFPB views the assessment as “an opportunity to evaluate whether prior HMDA rulemakings have improved upon the data collected, reduced unnecessary burden on financial institutions, and streamlined and modernized the way financial institutions collect and report HMDA data.” (CFPB HMDA Rule Assessment, Consumer Financial Protection Bureau 5). Once published in the Federal Register, the request for information will remain open for public comment for 60 days.
This request for information is a valuable opportunity for current and potential HMDA reporters to provide feedback to the CFPB regarding HMDA data collection and reporting obligations. Notably, the CFPB is seeking information regarding the scope of HMDA reporting obligations–including loan-volume thresholds, institutional coverage, transactional coverage, and data points. As such, commentary regarding these issues from institutional stakeholders may play a role in any HMDA rule changes that emerge from this information request.