HMDA’s Coming, Ready or Not!
HMDA’s Coming, Ready or Not!
Most of us are still in TRID and MLA overdrive and the 2018 HMDA rules seem miles away. But we are also in the final quarter of 2016 with the first of new HMDA data reporting requirements becoming effective on January 1, 2017. You need to start preparing now – if you haven’t done so already, form a working group to help lighten the load. Here are some tips to get you started.
1) Review the CFPB’s introductory webinar for HMDA compliance found at https://www.youtube.com/watch?v=Arm9XL-Am9M&feature=youtu.be to familiarize yourself. You’ll need one hour for this step.
2) Review the CFPB’s HMDA Small Entity Compliance Guide at http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/hmda-implementation/ .
3) Determine your 2017 HMDA coverage using the CFPB guide at http://files.consumerfinance.gov/f/201510_cfpb_2017-hmda-institutional-coverage.pdf . If you answer “yes” to all 5 questions, you must report HMDA under the 2017 reporting rules. These include an Asset Test; Location Test; Loan Activity Test; Federally Related Test; and Loan Volume Test. Note: The 2016 asset-size test won’t be updated until later this year but there was no change for the 2015 test ($44 Million).
4) There are no data collection changes for most of 2017 – The Government Monitoring Information data will remain the same.
5) However, there is a new data submission process for which you’ll need to prepare. Financial institutions will file data using the new CFPB platform for data collected on January 1, 2017 and after. The CFPB has issued a new “FIG” (Financial Institution Guide) at http://www.consumerfinance.gov/data-research/hmda/static/for-filers/2017/2017-HMDA-FIG.pdf for which you’ll need to prepare. The FFIEC website will no longer be an option. The new CFPB filing software includes validity edits that will need to be corrected or validated before data can actually be transmitted.
6) Check with your vendors to see what provisions they are making to accommodate the new software filing requirements.
Another change to make note of is that your lobby notices will need to be changed. Banks will no longer be required to provide a disclosure statement or modified LAR to the public upon request. Instead, you will post a notice that the disclosure statement and modified LAR are available on the CFPB’s website. This change applies to data collected on or after January 1, 2017 and reported in 2018. The suggested text for the new poster is near the bottom of the page at https://www.bankersonline.com/regulations/12-1003-005 .
The more complicated requirement will come later in 2017. For applications taken in 2017 but final action is not completed until 2018, the Bank complies if it collects demographic data in accordance with the requirements in affect at the time it was gathered even though those requirements changed before the date of final action {1003.4 Comment 4(a)(10(I)(2)}. For a peek at the new “Demographic Information” Form go to http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/hmda-implementation/ and scroll to the bottom of the page.
Preparing for 2017 data filing is your first step toward 2018 HMDA compliance. Jump in!
Evelyn I. Dehmey | HMDA's Coming | Ready or Not!