Home Mortgage Disclosure Act (HMDA) New HMDA Data Collection Requirements
The Home Mortgage Disclosure Act (HMDA) requires many financial institutions to maintain, report, and publicly disclose information about mortgages. HMDA was originally enacted by Congress in 1975 and is implemented by Regulation C. The Dodd-Frank Act transferred HMDA rulemaking authority from the Federal Reserve Board to the Consumer Financial Protection Bureau (CFPB) on July 21, 2011. In late 2015, the CFPB significantly modified Regulation C by adopting amendments that will go into effect on the first day of January in 2017, 2018, 2019, and 2020. These changes will affect credit unions, and the time to start planning for them is… now!
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) has already profoundly affected residential mortgage lending operations (think “Qualified Mortgages,” “Loan Estimates”, and “Closing Disclosures”), but now it’s time for credit unions to plan and prepare to collect and report data about a broader range of products, and in more detail, than ever before.
How the NCUA and CFPB Work for Credit Unions
The NCUA, as the Federal Regulatory Agency specifically for federally insured credit unions having assets less than 10 Billion, and the CFPB as the Federal Regulatory Agency for all credit unions whose assets equal or exceed 10 Billion work together to ensure that filing deadlines are met.
The NCUA`s own Regulatory Alert 16-RA-01 summarizes the criteria for collection of HMDA during calendar year 2016 and the subsequent filing date. The NCUA also posted a separate link to the 2015 Home Mortgage Disclosure Act Data Filing Information which has further resources, including a link to “A Guide to HMDA Reporting: Getting it Right!” produced by the FFIEC.
Stay up to date and compliant with proposed rules given by either the NCUA or the CFPB. Here is CFPB`s recent proposal on arbitration agreements in consumer loan documents.
CFPB`s Proposed Prohibition:
If you review the CFPB proposal on expanding the prohibition on mandatory arbitration, you will find some clauses that can affect all documents.
You can search the NCUA`s website high and low, and will not find any details on the proposed arbitration clauses. This is because the NCUA has yet to issue any regulatory alerts and/or guidance on this topic.
Oak Tree is standing by, ready to provide support to all existing clients and offer new clients compliance support when a credit union purchases one of our lending packages.
Also, in an effort to make reporting as easy as possible, the FFIEC allows credit unions to submit reporting data three different ways. Listed below are the filing options.
HMDA Filing Options as Described by the FFIEC
Submission via Paper Form. Credit unions with 25 or fewer entries on their Loan Application Register (LAR) may report and submit the data in paper form. Credit unions with more than 25 entries on their LAR must submit their reports in an automated form, either via Web, E-mail, or diskette/CD-ROM, as discussed on the NCUA’s HMDA page within the FFIEC website.
Submission via Web. FRB prefers receiving the LAR data through the Submission via Web option.
*Please note transmissions by methods other than Submission via Web or E-mail may be delayed due to FRB security protocols.
For credit unions that must collect and report HMDA data under the new rules, the level of sophistication that must be employed when collecting loan data will have a profound effect on your closed-end mortgage lending operations, and, for the first time, your open-end home equity line of credit loans. Credit unions that have not already begun to take the steps to comply should quickly develop a strategy to ensure that they will be in a position to satisfy the data collection and reporting requirements that will be phased in over the next few years.
We at Oak Tree will do our part by ensuring that our documents remain compliant with all applicable data collection requirements, as well as state and federal guidelines, laws, and regulations. That will leave you with one less thing to worry about. Contact us today if you would like more information or need assistance. Oak Tree offers your credit union Data Linking Services, so that your credit union member`s data is "linked" or "mapped" properly into lending forms we provide to your credit union. We’re always happy to clarify or help.
Also, we’d love to get your feedback if you’ve had a great experience dealing with the NCUA or CFPB on these changes. We’re all in this together!
Truth in Lending Act (Regulation Z) Adjustment to Asset-Size Exemption Threshold
The Bureau is amending the official commentary that interprets the requirements of the Bureau’s Regulation Z (Truth in Lending) to reflect a change in the asset-size threshold for certain creditors to qualify for an exemption to the requirement to establish an escrow account for a higher-priced mortgage loan based on the annual percentage change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the 12-month period ending in November.
The adjustment to the escrow`s exemption asset-size threshold will also decrease a similar threshold for small-creditor portfolio and balloon-payment qualified mortgages. Balloon-payment qualified mortgages that satisfy all applicable criteria, including being made by creditors that have (together with certain affiliates) total assets below the threshold, are also excepted from the prohibition on balloon payments for high-cost mortgages. The exemption threshold is adjusted to decrease to $2.052 billion from $2.060 billion. Oak Tree forms support any changing rates and fees at no additional cost to the credit union.
Disaster Planning and Response
The purpose of this program is to emphasize to all credit unions the necessity of taking steps to prepare for the next potential disaster.
Credit unions have a responsibility to put in place a disaster recovery plan. You may have also experienced circumstances that make your credit union rethink and perform reviews on what plans for disaster are in place, and how your credit union would respond.
These plans should be commensurate with the credit union’s complexity of operations, and focus on minimizing interruptions of service to members and maintaining member confidence in times of emergency. Oak Tree offers your credit union options for disaster recovery.
Chat with us to get your forms package with a disaster recovery program.