The Consumer Financial Protection Bureau (CFPB) has finalized its Home Mortgage Disclosure Act (HMDA) rule on October 15, which will place banks and credit unions in the fair lending crosshairs.
According to the agency, mortgage lenders will be required to provide more information about mortgage loan underwriting and pricing, such as an applicant’s debt-to-income ratio, credit score, the interest rate of the loan, points and fees, loan term, prepayment penalty, and discount points.
In addition, lenders will be required to gather more demographic information about the borrower. For examples, lenders must report the age of the borrower and permit borrowers to self-identify their ethnicity and race using disaggregated ethnic and racial subcategories.
This information will enhance the ability for the CFPB and its consumer allies to monitor lenders for possible fair lending problems.
Read the press release.
The only concern I would have with this would be for smaller community banks and smaller credit unions. How do they continue to keep up with the ever increasing regulatory burden?
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