The Home Mortgage Disclosure Act underwent certain changes and to evaluate whether it is meeting the stated goals of detecting discrimination in mortgage lending the Consumer Financial Protection Bureau is seeking comments.
The CFPB requests for assessment of the mortgage disclosure law and checks if it meets the objectives of the Dodd-Frank Act.
To abolish discrimination in mortgage lending in 1975 the Congress enacted .
The bureau said the request comes after an August report found that mortgage lenders as compared to white applicants were charging higher interest rates and denying credit to Black and Hispanic applicants.
The bureau said that with this evaluation the CFPB will be able to maintain a fair, competitive, and non-discriminatory mortgage market.
They added that the assessment is an opportunity for the Bureau to get an idea if the earlier HMDA rulemakings have improved upon the data collected, thereby reducing loans on financial institutions, and streamlining and modernizing the way in which financial institutions collect and report HMDA data.
A regulatory relief bill was signed by former President Donald Trump in 2018, giving 85% of all banks relief from expanded HMDA data fields authorized by Dodd-Frank.
In 2020 a final HMDA rule was issued by former CFPB Director Kathy Kraninger easing the reporting requirements for closed-end mortgage loans to 100 loans, up from 25, in the previous two years for small lenders.
Yet few provisions of the 2020 rule, including the increase in the open-end coverage threshold, were not considered under this assessment.
Under Regulation C, HMDA’s implementing regulation, the financial institutions are required to collect and report 22 data points with optional reporting of the reasons for the denial of a loan.
The recent input request focuses on four areas:
Transactional coverage, Institutional coverage and loan-volume thresholds, Data points, and Disclosure and reporting requirements.
Reference Source: American Banker
https://www.compareclosing.com/mortgagenews/public-feedback-requested-by-cfpb/
