Better late than never, I guess. The Community Home Lenders Association sent a letter to acting CFPB Director Mulvaney seeking a delay in implementation of the new HMDA data collection and reporting requirements. That’s like betting on a long shot.
They believe the new requirements are an unfair burden on small independent lenders. Further, they want a safe harbor from enforcement actions when lenders are evidencing a true good faith effort to comply with the new rules.
This may be too little, too late. Lenders have had plenty of advance notice of the new HMDA requirements. Many have done what needs to be done to be ready to comply by January 1, 2018.
It would be tough for President Trump’s newly appointed Acting CFPB Secretary’s first official act to be a postponement of these new rules. That may not sit well with those who opposed this appointment.
As it’s doubtful this delay will be granted, lenders need to be ready for the new HMDA requirements in January. To do so, they’ll need the technology to identify, collect, validate, and report the new required data.
Otherwise, they’ll need to do it manually and that will take quite a bit of manpower and be prone to potential errors. Not a very wise plan.
Further, the new HMDA information will be beneficial to lenders. This is big data that they can mine for lending and process improvements. The information they can use to make things better, especially in the upcoming, more competitive market.
It may be a better plan to push for the safe harbor from enforcement. This would be something that Mr. Mulvaney could control that would surely benefit lenders that need a little more time.
Reporting of the new data is not required until 2019 so lenders can still work on HMDA compliance through 2018. As long as they can show a good faith effort toward compliance, the safe harbor would protect them against major enforcement actions.
The Community Lenders may need to be selective in picking their battles. Their final choice should be one they believe they can win. While fighting the good fight, they need to continue to explore their options for timely HMDA compliance.
Technology is the answer and LoanLogics can help.