HMDA Implementation Guidance | Wolters Kluwer
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HMDA Resource Center

  • Implementation Guidance

    In the short term, capturing, compiling, reporting, and analyzing the new HMDA report will strain every part of your lending and compliance teams. In the long term, new fields provide regulators, advocacy groups, and the industry with new opportunities and challenges. Prepare now for both. Project plans should be well underway for the HMDA expansion.

    Key focus areas should include:

    • Use technology solutions for automating the collection of the expanded HMDA data set – manual or paper processes will no longer suffice. The goal is to prepare accurate data for the below submission milestones:
      • 2017 data collected under current rules is submitted to CFPB.
      • 2018 data collected under the new, expanded scope rules is submitted to CFPB.
    • Engage key stakeholders early and often to ensure they understand the new requirements and their responsibilities; and
    • Create or update your HMDA Compliance Management System (CMS), policies, procedures, process flows, controls, QC, and start training, before 2018. This will come in handy for your first exam.

    Recommended Guidance for 2017

    Prepare for March 1, 2018 submission: Get familiar with the new submission procedures. The 2017 file format is changed to pipe delimited. The 2017 data will be submitted to the CFPB instead of the FFIEC. The CFPB will be issuing a new submission portal in the summer of 2017. Be sure to allow enough time in February during your year-end process to include time to answer these edits before you submit.

    Prepare systems to collect 2018 data: The number of data fields to collect roughly double in the year 2018, and points of data may total over 100 on any given file. Ensure all systems are updated and controls are in place to collect the data needed in 2018. Prepare LOBs to collect new categories of 2018 data: In general, the 2018 changes will relate to four categories of new or modified data points. Engage key stakeholders and put QC and controls in place to ensure that accurate data is collected on the following:

    • Information about applicants, borrowers and the underwriting process, such as age, credit score, debt-to-income ratio, reasons for denial if the application was denied, the application channel, and automated underwriting system results, as well as expanded categories for race.
    • Information about the property securing the loan, such as construction method, property value, lien priority, the number of individual dwelling units in the property, and additional information about manufactured and multifamily housing.
    • Information about the features of the loan, such as additional pricing information, loan term, interest rate, introductory rate period, non-amortizing features, and the loan type.
    • Certain unique identifiers, such as a universal loan identifier, property address, loan originator identifier, and a legal entity identifier for the financial institution.

    Ensure 2016 and 2017 submissions are accurate: Test 2016 and 2017 data for quality and accuracy, then resubmit and update training as necessary. Once 2018 arrives, your important HMDA resources need to focus forward, not backwards correcting past submissions.

    Recommended Guidance for 2018

    New Data Fields are being collected, and on March 1, 2018, the submission process changes to the CFPB. There may be some changes relating to geocoding and summaries for quality edits. Ensure that you have QC and second and third lines of defense monitoring for data quality and integrity.

    Recommended Guidance for 2019 and 2020

    Ensure the data integrity of the new data, and analyze data for the impact on fair lending, CRA and UDAAP. Certain institutions will prepare for Quarterly Submissions in 2020.