The Consumer Financial Protection Bureau plans to reconsider aspects of its mortgage data and prepaid rules. The CFPB also said that it does not intend to assess penalties for errors in mortgage data collected in 2018 and to delay the effective date of the prepaid rule. The prior actions had been issued under former Director Richard Corday, while the change in direction is taken under the leadership of new acting Director Mick Mulvaney.
HMDA reporting requirements. The Bureau will not require data resubmission under the Home Mortgage Disclosure Act unless data errors are material or assess penalties with respect to errors for data collected in 2018 and reported in 2019. The CFPB’s public statement recognizes significant systems and operational challenges that are needed to adjust to the revised regulation and the extended submission deadline is intended to help institutions identify compliance weaknesses. The Bureau will credit good-faith compliance efforts.
The Bureau also announced
it intends to open a rulemaking to reconsider various aspects of its 2015 HMDA
rule, such as the institutional and transactional coverage tests and the rule’s
discretionary data points. Beginning on Jan. 1, 2018, financial institutions
will submit HMDA data collected in 2017 and beyond using the Bureau’s new
online platform.
Similar statements regarding HMDA
implementation have been issued by the Federal Reserve
Board, Office
of the Comptroller of the Currency, Federal Deposit Insurance
Corporation, and National Credit Union Administration.
Legislative support. While
Sen. Mike Rounds (R-SD) is supportive of the CFPB’s action to delay enforcement
of the HMDA data reporting requirements, he hopes
that the temporary reprieve will give the Senate enough time to consider the
Banking Committee’s economic growth legislation. This includes Rounds’ provision
of an exemption for small financial institutions that originate 500 closed-end
mortgage loans or 500 open-end lines of credit from HMDA reporting
requirements. “This will allow banks to focus on servicing consumers rather
than on complying with unneeded federal reporting regulations.”
Expressing his gratitude to acting Director Mick Mulvaney,
Rep. Randy Hultgren (R-Ill) said
that the delayed enforcement will protect community banks and credit unions
from “burdensome” reporting requirements. Hultgren recently introduced the Home
Mortgage Reporting Relief Act with Rep. Tom Emmer (R-Minn), who also applauded
Mulvaney’s action, which would give community banks and credit unions
additional time to comply with the new HMDA reporting rules.
Industry support. Independent Community Bankers of America
President and CEO Camden R. Fine strongly supports
the CFPB’s actions, believing that if left unaddressed, these mandatory
reporting requirements would divert critical community bank resources that
would otherwise be used to serve American consumers.
Prepaid rule. The CFPB said that it expects to amend its
prepaid rule “soon after the new year” and delay
the effective date to allow additional time for implementation. The prepaid
rule would affect error resolution procedures for unregistered accounts
and digital wallet credit cards that are linked to prepaid
accounts. The CFPB’s anticipated action will be based on its review of comments
received on changes that had been proposed to meet industry concerns.
The rule had been scheduled to take effect on April 1,
2018, but in June the CFPB proposed amendments to Reg. E—Electronic Fund Transfers (12
CFR Part 1005) to address what prepaid companies described as “unanticipated
complexities” with the rule.
For more information about CFPB initiatives under new leadership, subscribe to the Banking and Finance Law Daily.
