CFPB Begins Expansion of HMDA Reporting

The Consumer Financial Protection Bureau last week announced it was taking preliminary steps to expand the types of loan data that financial institutions must report under the Home Mortgage Disclosure Act (HMDA).

Though no details are known at this early stage, some of the changes the Bureau is considering will directly impact reverse mortgage companies.

As a first step in the rulemaking process, the CFPB will convene a panel of small businesses to seek feedback on the potential changes.

HMDA was passed in 1975 to provide the public and regulators with information they can use to monitor whether financial institutions are serving the housing needs of their communities and providing access to residential mortgage credit. Today, HMDA is the preeminent data source for regulators, researchers, economists, industry, and advocates studying and analyzing trends in the mortgage market. This enables them to assess such issues as housing needs, public investment, and possible discrimination.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) transferred rulemaking responsibility for HMDA from the Federal Reserve Board to the CFPB. Congress directed the Bureau to expand HMDA to consider adding more data points that would be helpful in spotting troublesome trends.

Among the proposals under consideration is requiring that HELOCs and reverse mortgages be identified by loan type to distinguish them from other categories of loans with different pricing structures and features.

CFPB’s HMDA announcement

Outline of proposals under consideration