It's official as of today. The CFPB has issued a proposed rule amending HMDA.

Announcement: http://www.consumerfinance.gov/newsroom/...20140724+regimp

Proposed Rule: http://files.consumerfinance.gov/f/20140...egulation-c.pdf

Enjoy!

Holy wow. The proposed rule is SIX-HUNDRED PAGES LONG!!!!

It'll take two years just to read it! Ha.

We knew it was coming...but still doesn't mean we have to like it

OK....I am reading the information on the CFPB website and it is confusing me. First it states:

Depository institutions, such as banks, satisfying HMDA’s general reporting requirements must submit HMDA data, even if they make only a single home-purchase loan or refinancing in a given year.

Then it goes on to say:

With the proposed standardized reporting threshold, small depository institutions that have a low loan volume—fewer than 25 mortgages a year—would not have to report HMDA data. For small banks with few staff members, this change could make a significant impact in easing compliance costs. The new threshold would reduce the overall number of banks required to report HMDA data by 25 percent, but, because those lenders receive a low volume of applications and originate a low volume of mortgage loans, the change would not compromise the usefulness of the dataset.

Is this not contradictory? You have to report if you have even one but yet banks with less than 25 are exempt? No where does it mention anything about being in a MSA. Is that part staying the same?

We are a small rural community bank and if we have to start reporting HMDA it would be a big headache and change for us! Let alone the cost and time involved.

ugh ... what a nightmare

QM, I think it's talking about the current reporting requirements vs. the proposed.

The one is the current rule, then they discuss the proposed.

Are they changing the MSA part of it? I just don't want to have to start collecting this information and reporting.

No, the MSA rule remains but only if you hit the 25 loan threshold, not 1 as it is now.

I'm half convinced that they deliberately make these proposed rules so large to discourage the industry from reading them and commenting on them. I mean, seriously, it's a struggle to read the final rules, let alone read the proposed rules as well.

It is long but mostly because of the discussion of information received from the meetings held and other comments from the industry, and details on why certain changes are proposed. I find that to be interesting and important but you could just go right to the proposal and skip the discussion and analysis.

See my comment here.

http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1945658&#Post1945658

Yes, it's interesting. But I tend to agree with Sinatra Fan about burying stuff. I'd hazard to say that the majority of us working compliance simply haven't got the time to devote to sitting down and reading something this voluminous, yet alone do so without constant interruptions and side tracks.

However, if regulators did not provide the discussion and analysis, they would be criticized for that. They can't just toss out the proposed rules without discussion of the reasoning and asking for comments.

It has always been a struggle for banks to stay on top of proposed and new regulations and they have to either provide for that in house or rely on external parties (like BOL).

Anyone have a summary available yet? haha

I am working on it! Sitting here reading right now.

Reading it and envisioning bankers falling in the aisles.

How about this...report the MLO identifier (SAFE Act) so that training deficiencies can by identified!

"The Bureau believes that implementing the Dodd-Frank Act
requirement for a mortgage loan originator unique identifier will improve HMDA data and assist in identifying and addressing potential issues, such as training deficiencies with specific loan originators, as well as strengthen the transparency of the residential mortgage market. The ability to identify an individual who has primary responsibility in the transaction will enable new dimensions of analysis, including being able to link individual mortgage loan originators or groups of mortgage loan originators to a financial institution."

I am chuckling here.

Here are the proposed fields. There is a lot of explanatory data that is key to when and what to report.

§ 1003.4 Compilation of reportable data.
(1) A universal loan identifier
(2) Insured Under National Housing Act
(3) Loan Type
(4) Preapproval
(5) Construction Method
(6) Principal Residence
(7) Amount
(8) There is no 8
(9) Location including address and geocoding
(10) Ethnicity Rate Sex and Age and Gross Annual Income
(11) Purchaser Type
(12) Rate Spread
(13) HOEPA
(14) Lien Priority
(15) Credit Score
(16) Denial Reasons
(17) Points and Fees
(18) Itemized Amounts Paid At or Before Closing
(19) Points to Reduce Rate
(20) Interest Rate if no points
(21) Interest Rate
(22) Prepayment Penalty Term in Months
(23) Debt to Income Ratio
(24) Loan to Value
(25) Term in Months to Maturity
(26) Months to First Interest Rate Change
(27) Negative Terms (Balloon, Interest Only, Negative Amortization)
(28) Property Value
(29) Manufactured Home – Real or Personal Property
(30) Manufactured Home – Land Owned or Leased
(31) Number of Dwelling Units
(32) Number of Affordable Housing Units if Multifamily
(33) Channel
(34) MLO NMLSR ID
(35) AUS System Name
(36) Reverse Mortgage Identifier
(37) Open End Line of Credit/HELOC identifier
(38) ATR and QM Identifier
(39) Amount of draw at account opening for HELOC and open end Reverse Mortgage

I think a key to commenting is to determine which of these pieces of info (several line items are multiple fields) are already captured by your system and could be fed to the LAR and what would be needed to do that).

Also, does your Core and/or origination system already support MISMO standards even if you have not been using it.

Basically, think it through before commenting.

What if there is no MLO for a specific transaction? Do they give the option of N/A?

Proposed instruction 4(a)(34)-2 in appendix A provides that, in the event that the mortgage loan originator is not required to obtain and has not been assigned an NMLSR ID, a financial institution must enter “NA” for not applicable.

Anyone have an idea yet on what the effective date of all of these changes would be?

I know that Dodd-Frank said that any new data that is required to be collected would not be required to be reported before the fist January 1 that occurs after the end of the 9 month period beginning on the date of the file rule, but that's only the new data elements. I have also seen comments in the proposal that talk about things like the quarterly reporting not taking effect until 1 year after the other elements taking effect. Anyone have a clear description of the actual proposed timelines for effectiveness at this point??

Thanks

I just received an e-mail from another source that expected it to be January 2016 according to Dodd-Frank.

The comment period does not end until October 22, 2014. If they got a final rule out December 31, 2014, the earliest could be 1/1/2016 to start collecting for 3/1/2017 reporting.

I wouldn't be surprised if that pushed out a year from those dates to allow for the extensive programming changes needed.

I assume that is the requirement to start collecting any new data elements? So, any new report including that data wouldn't arise until 2017??

As I said, collecting 1/1/2016 for reporting in 2017.