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#1966842 - 10/03/14 02:21 PM How does YOUR bank collect HMDA data?
Anonymous
Unregistered

We've recently been asked by our examiners to revisit our HMDA data collection procedures. My question to you is, how does your bank do it?

Do you have one person handling collection of all HMDA reportable loans? What about non-originated loans? How do you ensure that you've collected data on each HMDA reportable loan? Using a smart report is a great idea when you look at purpose codes, collateral codes and etc but what happens when you have incorrect codes?

Does your bank have a centralized loan processing department or is this handled at the branch level?

What is your asset size?

How is the quarterly auditing handled?

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#1966898 - 10/03/14 04:16 PM Re: How does YOUR bank collect HMDA data? Anonymous
Moman Offline
Platinum Poster
Joined: Jul 2004
Posts: 505
WA
We are small enough that I monitor our production loan reports and pull each file (luckily we image). I also look through our adverse files each month for HMDA and fair lending and other compliance issues such as spousal signatures, guarantees and appraisal delivery rules. We are a relatively small bank (just passed $500Mil). Examiners made the comment that I could step down monitoring at the last exam, but to catch all HMDA, it's needed. If we did vanilla type residential loans, monitoring electronically would be much easier than it is with commercial lending. We have centralized processing. Quarterly audits are not required, however maintaining the register within 30 days after each quarter is. I report the status of LAR maintenance to our Compliance Committee each quarter.

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#1966928 - 10/03/14 04:47 PM Re: How does YOUR bank collect HMDA data? Anonymous
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,293
If the bank's codes are incorrect, that needs to be corrected immediately because those codes impact many things and just making corrections is a waste of staff time.

Inventory loan areas to determine where loans could be made that might be HMDA reportable (often virtually anywhere except an area that does not ever take any type of residential real estate as collateral).

The small to mid sized banks I work with generally have to develop a process where those inputting data (such as into an origination system) are held accountable for accuracy, and then centralize reviews and testing.

Banks tend to get this right after having problems.

Accountability for accuracy is important even if your LAR is hand prepared by one person. Files must contain correct easily identifiable data, and someone else should be checking the original input. I often have found errors that are purely typos, but errors nonetheless.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#1967518 - 10/07/14 03:06 PM Re: How does YOUR bank collect HMDA data? Anonymous
gacompliancegirl Offline
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Joined: May 2009
Posts: 234
hanging on by a thread
Loan officers/assistants are responsible for collecting required data for reportable applications and completing a HMDA data entry sheet. Monthly a member of the compliance department reviews all non-originated applications and a loan closing report from our core for HMDA reportable loans. She also looks for reportable loans that the loan personnel may have missed. She then pulls those files, reviews the data sheet (asks for it to be completed if they forgot) and makes sure that all documentation ties back to the file. Once we know the information on the data sheet is correct, and that all data sheets have been obtained, that person inputs the data into the LAR. Quarterly, I review the LAR, spot check a sample of the entries, and look for "inconsistencies" that might be errors (like a income code reported for a business).

We also keep a paper "package" on each loan on the LAR that includes a copy of the data sheet and any document from the file that evidences or backs up that data (rate spread calc or loan memo detailing income relied upon, for example). We also make notes of anything that we had to research or investigate so that if questions come up later, we have it there. We are a small insitution with fewer than 100 entries on the LAR. Our paper package might not be feasible for a larger bank, but we have found it invaluable. Anytime an auditor or examiner questions an entry on the LAR, we are able to quickly produce the package and show them exactly why we entered the data.

In mid January, we begin scrubbing each entry on the LAR. We go through every paper package and compare it back to the LAR.

We have very few errors (sometimes, none!) on our LAR with these procedures, but it may not work for a bank with a larger amount of entries.
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#1967782 - 10/07/14 08:07 PM Re: How does YOUR bank collect HMDA data? Anonymous
AllSmiles Offline
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Joined: Feb 2008
Posts: 290
Mayhem
Ditto Gacompliancegal. We are a small bank also and rely on the HMDA packet. We require a HMDA Input Recording Worksheet from the BOL Toolbox to be completed with all real estate loans reportable and non-reportable, including denials. Each worsheet provides the reason it is or is not reportable and all supporting documentation. Our process is centralized. A designated person inputs the info from the sheet into our loan doc system, the Loan Support Manager is responsible for comparing the info which is exported into the LAR. I pull a sampling to compare and then External Audit steps in. We use QuestSoft.
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CRCM, CAMS

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