HMDA Proposal Would Increase Reporting Burden

The Consumer Financial Protection Bureau (CFPB) has issued a 573-page proposed rule that would significantly increase the reporting burden on Home Mortgage Disclosure Act (HMDA) filers.

The proposed rule would mandate financial institutions to report 37 new additional data fields under HMDA. In keeping with the Dodd-Frank Act requirements, the rule would require lenders to report for the first time property value, loan term, total points and fees, the duration of teaser rates and the age and credit score of the applicant or borrower. The CFPB also proposed that lenders submit data on an applicant’s debt-to-income ratio, interest rate and total points charged, which the bureau said would help it evaluate the impact of its mortgage rules. With only a few exceptions, all dwelling-secured loans would be subject to the rule.

The CFPB further proposed a single threshold -- 25 mortgages originated annually, excluding open-end lines of credit -- at which financial institutions become subject to the rule. The CFPB estimates that approximately 1600 depository institutions would no longer be subject to HMDA reporting, while almost 450 nondepository institutions would now have to report their HMDA data.

In addition, financial institutions that reported at least 75,000 covered loans, applications, and purchased covered loans, combined, for the preceding calendar year, would be required to report data quarterly. THE CFPB estimates 28 financial institutions would be subject to the new quarterly reporting requirements based on 2012 HMDA data.

While the proposal would reduce the reporting burden on banks and credit unions that originate few mortgages, for all other banks and credit unions the reporting burden will significantly increase.