November 2015 A Regulatory & Legislative Advisory for Compliance Professionals
Inside . . .
2 Small Bank Views
2 ABA Opposes Plan
for Overdraft Survey
3 Final Campus Bank
3 Cautions on Payday
4 Four Largest Banks
Bank Secrecy Act
5 OFAC General
Liquidation of Banco
6 2d Issue of SAR
6 Statement on Iran
7 Risks of Transaction
7 Warning on Cyber
CFPB ISSUES FINAL HMDA EXPANSION RULE
The Consumer Financial Protection Bureau on October 15 finalized a rule required by
the Dodd-Frank Act that expands the data lenders are required to collect and report
under the Home Mortgage Disclosure Act. Most of the provisions of the final rule
will take effect on January 1, 2018. Lenders will collect the new information in
2018 and then report this information by March 1, 2019. High-volume originators
will file quarterly beginning in 2020.
The new required information includes the property value, loan term and the duration
of any introductory interest rates, as well as underwriting and pricing details, such as
an applicant’s debt-to-income ratio and the loan’s interest rate and discount points.
The rule also requires that covered lenders report information, with some exceptions,
about all applications and loans secured by dwellings, including reverse mortgages
and open-end lines of credit. One important exception – which ABA and the state
associations advocated for vigorously – is for dwelling-secured transactions made for
commercial purposes. Lenders do not need to report data for such loans.
In response to feedback, the CFPB eliminated several data points, such as the “
risk-adjusted, pre-discounted interest rate,” that it had included in its original proposal. In
addition, the Bureau responded to ABA and state association requests to provide
sufficient transition time.
Small depository institutions that are located outside a metropolitan statistical area
remain excluded from coverage. In addition, the CFPB adopted a uniform loan volume
threshold that exempts institutions that made fewer than 25 closed-end mortgage
loans or fewer than 100 open-end lines of credit in each of the two preceding calendar
years. This threshold will reduce the number of institutions required to report HMDA
data by an estimated 22 percent, the Bureau said.
The CFPB is working with other federal agencies to modernize and streamline the
HMDA data submission process to collect information more efficiently. The Bureau
has completed a pilot of a new web-based tool to collect HMDA information. Industry
stakeholders have tested the pilot and the feedback has been positive. Implementing
this technology can reduce manual and paper-based systems currently used by
regulators and reporting financial institutions.
“We appreciate the time and attention the Bureau has applied in considering industry
comments to prepare the final HMDA rule,” ABA’s Frank Keating said in a statement.
“We are pleased that the Bureau has extended the compliance date and excluded the
collection of data on most commercial transactions, as ABA advocated.” He added,
however, that ABA continues to be concerned about the privacy of bank customers’
data and the significant expansion of data collection requirements. Read an executive
summary of the final rule. Read the final rule. CFPB implementation resources.