Concerned that proposed reporting rules required by the Home Mortgage Disclosure Act (HMDA) could result in increased costs and potential privacy breaches for reverse mortgage lenders, the National Reverse Mortgage Lenders Association (NRMLA) is pressing the Consumer Financial Protection Bureau (CFPB) to delay further implementation of the rule until certain concerns have been addressed.
In a letter addressed to Monica Jackson of the CFPB’s Office of the Executive Secretary, NRMLA submitted comments to the agency, expressing its qualms with proposed HDMA reporting rules that “woefully underestimate the cost to implement and comply” with the revised regulation.
On August 29, the CFPB published a proposed rule in the Federal Register amending Regulation C to implement amendments to the HMDA made by section 1094 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Under one component, the CFPB is proposing to better align requirements of Regulation C to existing industry standards, such as data reporting under MISMO standards or uniform GSE data sets.
The trade group also raised concerns about both the privacy of information of consumers as well as mortgage industry participants’ potential exposure and liability for fraud and identity theft, as it applies to another HMDA proposal that would require financial institutions to make reporting data available for public viewing.
These concerns, NRMLA writes, point to a “compelling need” for the CFPB to conduct further analysis and solicit additional comments and feedback prior to finalizing a revised HMDA rule.
Lastly, NRMLA urged the CFPB to consider an exemption for covered non-depository institutions with $10 million or less in assets in the previous fiscal year, and modify its proposed coverage test for these institutions by replacing its proposed loan volume or amount test from a 25-loan volume test to a 100-loan volume test.
Given the small reverse mortgage market today, which is expected to originate approximately 55,000 loans in fiscal year 2014, according to NRMLA, the impact that the CFPB’s proposed rule changes could have serious consequences on the industry as a whole if not fully considered and revised.
“[W]e strongly believe that any delay in gathering further data on reverse mortgages under HMDA is greatly outweighed by the burden that would be imposed o the industry by not providing the above exemptions or additional time,” NRMLA wrote.
View NRMLA’s letter to the CFPB.
Editor’s note: A previous version of this article reported that reverse mortgage lenders were not covered under HMDA reporting requirements when, in fact, they are. RMD regrets the error.
Written by Jason Oliva
