Mortgage Compliance

Happy New Year from CFPB

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cfpb-new-year-HMDA-resolutions-2018The CFPB is welcoming the new year with a change of heart on the collection of the new HMDA data. According to Acting Secretary Mulvaney, CFPB will offer lenders a safe harbor from enforcement action arising from reporting errors for the new 2018 data. A big win for lenders!

Further, according to Mulvaney, the CFPB plans to reduce the burdens of over-regulation inflicted on financial institutions by former Secretary Cordray. Don’t get too excited, but Mulvaney says he plans to scrap what is not required by statutes, such as loan underwriting and pricing information.

He said they may:

  • Reexamine lending activity criteria that determine whether institutions are required to report mortgage data
  • Look at adjusting the new requirements to report certain types of transactions, and
  • Reassess the additional information that the rule requires beyond the new data points specified under the Dodd-Frank Act

All good news for lenders, albeit that many have already spent lots of time and money getting ready for the new HMDA.

Nonetheless, the safe harbor will now allow lenders some time to go through what could be likened to a trial run before hitting the big HMDA reporting stage. A little more time to work out some of the kinks. Thank you, Mr. Mulvaney and President Trump. Don’t pass up this opportunity.

 

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This action signals a new regulatory environment and signs that maybe lenders and the CFPB can work together toward better consumer protections in a non-adversarial way. One can only hope.

As a byproduct, the concerns with the privacy of certain consumer information that may have been made available to the public through the new HMDA reporting rules may now be alleviated with the collection and reporting of less information. That’s known as consumer protection. The primary role of the CFPB. That’s a good thing.

Don’t rest on your laurels. There is still much to do when it comes to gathering and reporting your required HMDA data. A safe harbor won’t protect you if your information is consistently incomplete and, more importantly, inaccurate. Whatever is required must be reported timely and accurately.

This is the information that will be used by the CFPB to identify any bad actors. Make sure that what you report is an accurate reflection of who and what you are. Otherwise, safe harbor or not, you may end up on the wrong side of a CFPB investigation.

Are you ready to HMDA?

Michael Vitali

About the Author

Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.
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Michael Vitali

About Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.
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