By Jeff Bater
Oct. 27 — The Consumer Financial Protection Bureau is pressing mortgage lenders on meeting their obligations to report data the agency uses to identify discriminatory lending.
The CFPB issued warning letters to 44 mortgage lenders and mortgage brokers about their potential noncompliance with the Home Mortgage Disclosure Act (HMDA), according to a news release.
The companies were identified by CFPB review of available bank and nonbank mortgage data. The bureau made clear that in sending the letters, it had made no determination that a legal violation did, in fact, occur.
“The bureau has information that appears to show they may be required to collect, record, and report data about their housing-related lending activity, and that they may be in violation of those requirements,” the CFPB said.
HMDA was enacted in 1975 to require banks, thrifts, credit unions and nonbank mortgage companies to disclose data to federal regulators about mortgage loans they make and applications they receive. Last year, the CFPB finalized a rule expanding the amount of information that must be reported (200 Banking Daily 200, 10/16/15). Most provisions of the rule take effect Jan. 1.
Congress passed HMDA out of concern over credit shortages in certain urban neighborhoods and the possibility that some financial institutions may have contributed to those shortages. HMDA's stated purposes were to assist regulators in determining whether lenders were appropriately serving the credit needs of their communities and to assist public officials in making housing-related investments. The Dodd-Frank Act granted the CFPB broad authority to expand the HMDA dataset as it saw fit (21 Banking Daily, 2/2/16).
The CFPB called on the 44 letter recipients to review their practices to ensure they comply with all relevant laws. The agency did not name the companies in the news release.
“The companies are encouraged to respond to the bureau to advise if they have taken, or will take, steps to ensure compliance with the law,” the agency said. “They can also tell the bureau if they think the law does not apply to them.”
Richard Cordray, the CFPB director, said financial institutions that fail to report mortgage information as required make it harder to identify and address discriminatory lending.
“No mortgage lender that is required to report their loan data can avoid this responsibility,” he said.
To contact the reporter on this story: Jeff Bater in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Mike Ferullo in Washington at email@example.com
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)