The CFPB proposes to exclude certain loan-level data points, modify other data points prior to disclosure, and disclose other information without modification.
The trade groups say the disclosure of information will put the consumer at risk. Consumers provide lenders with a clear financial and demographic profile and the terms of their loans. Too much information to be disclosed to the public.
This will add to the potential for more identity theft and fraud; something the CFPB should working to avoid. After all, weren’t they created to protect the consumer? That was one of the reasons they cited for requiring more HMDA data.
Let’s face it, CFPB wants more HMDA information to carefully monitor and analyze lender activity.
- Are lenders lending responsibly and treating all consumers fairly?
- Is CFPB throwing the baby out with the bath water?
- Are they exposing consumer personal data rather than protecting it?
Does it really matter?
- With the consumer information all over the internet, will a few more data points about mortgages really matter?
- Do identity thieves need to spend the time and effort to analyze HMDA data to identify the consumer taking the loan?
- Couldn’t they just go to the courthouse and review the mortgage recordings?
The real challenges will come from the CFPB’s analysis of all the new HMDA information being reported. The more loan data they receive, the more analysis they can do. How far will they go before they start asking for more details?
The deeper they dig, the more chance they may find something that they believe is cause for concern. Are you thoroughly prepared to defend your lending activity, if challenged?
- Are you confident your HMDA data is complete and accurate in every detail?
- Do you have the capability to analyze your data before it’s reported?
- Are you sure all information in your LOS matches your loan documents?
I sure hope so. It will no longer be a matter of just submitting an LOS dump, without any missing data. The information reported must be a complete, accurate representation of your lending activity, across all channels.
Regardless of role reversals, changes at the helm of the CFPB, or disagreements over what should be disclosed to the public, the new, additional HMDA data will provide regulators with much more information.
Make sure yours is complete, accurate, and carefully analyzed before you report. You will and must be well prepared to defend what you do, the way you do it, and where, why, how it’s done.
When it comes to HMDA, lenders need to look out for themselves.