Even at an overview level, the new Home Mortgage Disclosure Act is intensive, as evidenced by insights from two panelists at the Consumer Bankers Association’s CBA LIVE conference, who zeroed in on the new act’s impact on home equity lines of credit (HELOCs).
After John Brotherton, senior vice president and product executive for Black Knight Financial Services, gave attendees an overview on the upcoming changes, Meredith Calcagni, manager with PwC, unpacked the consequences.
Calcagni said that up until this point, there haven’t been any major changes to HELOCs. They weren't in the major flood reform talks or covered under TRID.
She noted that the industry, instead, had an optional choice to report HELOCs. However, now it will be mandatory. She added that she knew few lenders before that actually opted to report.
With HMDA on the Consumer Financial Protection Bureau’s radar, there is little room for error despite the longer implementation timeline, she said.
From here, Calcagni said, “The regulatory expectations are extremely high.”
“The CFPB has flexed its HMDA enforcement muscle,” she said, “and that’s going to continue on.”
While most of the provisions of the final rule will take effect on Jan. 1, 2018, Calcagni said that lenders need to be in compliance much earlier.
She said the industry's target date to be in compliance should be October, which includes:
- Technology changes
- Procedure changes
- Staffing changes, including adding staff if necessary
This means, she said, the industry has less than six months. “The bar is set extremely high and there’s no room for error,” she said.
The sense of urgency came across in Calcagni’s presentation and yet few in the room had any questions for the two panelists. The mood toward HMDA seemed like the exact opposite of the last formal session at Ellie Mae’s Experience conference earlier this year. Instead, that Q&A did not disappoint, as lenders came forward with a lot of concerns on the act. Check out the full coverage on that HMDA session here.