Over 35 years ago, Congress enacted the Home Mortgage Disclosure Act to increase public scrutiny of access to credit and residential mortgage lending. But due to the surplus in new regulations over the years, especially recently, HMDA reporting is not up to par anymore.
“Better public HMDA data would help us improve upon an important resource that already allows regulators, government agencies, housing groups and consumer rights groups to study and monitor the single most important consumer financial product in the United States: the mortgage loan,” Director of the Consumer Financial Protection Bureau Richard Cordray said.
As a result, the CFPB is taking added initiative to conquer realigning the mortgage information required under HMDA.
Dodd-Frank moved rulemaking authority to the CFPB, directing the bureau to expand the HMDA database to include additional loan information that would be helpful in spotting troublesome trends.
To start, the CFPB unveiled a new online tool that makes it easier to navigate the publicly available HMDA data. Users are able to filter the data better, download it, create summary tables and share the results.
But this is just the first step.
The bureau also wants to create: better information, better collection and better access to information.
“As a next step in the rulemaking process, the Bureau will convene a Small Business Review Panel, as required by the Small Business Regulatory Enforcement Fairness Act,” the bureau said.
The panel was charged with seeking early feedback from small lenders, including feedback on how data can be updated to better reflect what is happening in the market. Changes under consideration include: new developments in the market and monitoring access to credit.
In addition, bureau is searching for a better means for collection because it can be cumbersome for lenders to collect and submit HMDA information.
A few areas the bureau found room for improvement included streamline reporting, standardizing the threshold and improving data entry.
Finally, the government agency is also looking at better access to information since the current available information to too large and complex, which is what the newly launched tool is meant to address.
“Taken together, we believe these efforts can improve the quality of and access to mortgage loan data, even as we relieve many of the pain points for creditors in the current data collection process,” Cordray said.