HMDA: The Income Field

When it comes to auditing HMDA, one of the most common errors we see cited by examiners and auditors is the income field.  It is confusing. 

What numbers should the loan officer use?

Is it what the applicants put on their application, is it taken from a tax return or W-2, or even some other verification document? The answer is, it’s none of those things.  The correct answer is that you report whatever the loan officer used or relied upon to make the credit decision.

Listen to the video as Dave explains more.

We hope you’ll join us for our webinar “Auditing HMDA”, on October 17, 2019, which is geared to those of you responsible for auditing/verifying the accuracy of data on your HMDA-LAR. We will get into the most current trends and hot spots that we’re seeing from the examiners. 

Dave Dickinson

CFPB Issues HMDA Final Rule

The CFPB issued a Final Rule that addresses portions of their May 2019 Notice of Proposed Rulemaking.  That particular Proposal is not to be confused with the Advanced Notice of Proposed Rulemaking that was also issued in May 2019. Both have comment deadlines of October 15th.  Our September 16th blog helps sort these out a bit.

What the Final Rule does:

1. Incorporates the Small Filer exemptions, granted by the Economic Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA), into the HMDA regulation (12 CFR 1003);

2. Extends the temporary threshold for open-end lines of credit (currently 500) until January 1, 2022.  In other words, the open-end lines threshold for determining if an institution must collect/report HMDA data for open-end lines in 2020 and/or 2021 will be 500. 

These changes are effective January 1, 2020.

The Final Rule does NOT address the proposed permanent threshold changes for either closed-end or open-end credit.  The comment period for these proposed changes remains open until October 15th.  The CFPB will address these with a separate Final Rule later in 2020.


HMDA: We’ve Got You Covered!

2018 was the first year of reporting under the new HMDA data requirements. We’d be lying if we said the transition was easy. 

Far from it! 

To add to the difficultly, there were several little tweaks along the way.  We are over halfway through year two of the new requirements.  Are you finding you’ve hit your stride with HMDA in 2019? Or, is it still a challenge for your institution?

If you need help with HMDA, we’ve got you covered!  We have a wide range of HMDA webinars available on-demand in our training library.  Choose from HMDA topics ranging from coverage and data reporting to demographic information and large and small filers you are bound to find what you are looking for.  Some of the topics are even available in one-hour formats. We also have an “Auditing HMDA” webinar coming up live on October 17th

Give one of our webinars a try and we guarantee you won’t be disappointed.  But don’t take our word for it, take it from bankers like you…

Auditing HMDA

Another great webinar by David Dickinson and Banker’s Compliance Consulting.  His knowledge and presentation of the HMDA guidelines make his webinars easy to follow and understand.   The outline provided provides a great reference document and having unlimited access to the video is an added bonus.  I would recommend Banker’s Compliance to anyone looking for educational opportunities. – Laurie J.
Great information as always and an easy to understand manual.  I refer to your manuals for information on a daily basis. – Vicky Z.
HMDA Action Taken Deep Dive
YAH! I’ve been struggling with differentiating Approved Not Accepted and Withdrawn, but I now have a clear understanding of the difference. Dave does a great job explaining the regulations in plain English which, for me, made this 60 minutes worth every minute! – Joanne B.
HMDA Demographic Information Collection
Great comprehensive overview of a topic that is often misunderstood.  Love the one-hour formats. – Sheldon H.

Did you know, that in addition to our HMDA training webinars we also do HMDA reviews/data scrubs?  Contact us today to find out how we can help you with the accuracy of your HMDA data!



Want to find HMDA Tools? Check out our Free Lending Tools!

HMDA Income

Question:  If a commercial officer uses net income to underwrite the loan, should we report Net Income instead of Gross Income on the HMDA-LAR?

Answer:  While the regulation specifies “gross” annual income, it goes on to say, that is relied on in making the credit decision…We believe you should report the income that is used in the credit decision, even if it is not gross.  Thus, you should report the net income since that is what the loan officer used.


Join us for the AUDITING HMDA Webinar. We will answer all the questions submitted during the live webinar, in writing.

Want more HMDA Tools? Click HERE!

Don’t Forget to Comment on HMDA!

On May 3rd, we alerted you to an Advance Notice of Proposed Rulemaking (ANPR) seeking comment on whether any changes should be made to existing HMDA data fields.

The ANPR specifically requests comment on the following:

1. Whether changes should be made to…any new data point or any data point revised to require additional information…for which the cost…does not justify the benefit…Specifically address any operational challenges, ongoing costs (including the impact of the CFPB’s new submission process), the value of the information from a HMDA perspective and whether the information would be regularly collected anyway;

2. Costs and benefits and proposed alternatives to free-form text fields;

3. If there are any other considerations to take into account in proposing whether to eliminate or revise any new or revised data; and,

4. If there are any new or revised data points for which more explanation is needed.  

Comments are also specifically requested on whether there is a benefit to reporting business loans to a non-natural person that are secured by a multifamily dwelling.  The CFPB seeks information on the following in relation to these types of loans:

5. The value of the data;

6. Other benefits; and,

7. The burden imposed.

If you have thoughts on these items, we strongly encourage you to submit your comments to the CFPB.  The CFPB does request that when responding to an issue, you indicate the number that we’ve provided above.  We’ve prepared a comment letter and have made it available in the Free Lending Tools on our website, not only to encourage you to comment but also to help guide you in the process.  Feel free to add to and/or revise it as you wish.

Comments were originally due by July 8th; however, the CFPB later announced they were extending the deadline.  Comments must now be submitted to the CFPB by October 15th.

Additionally, the CFPB announced their intent to reopen the comment period (which ended June 12th) regarding the permanent HMDA coverage thresholds for closed-end mortgage loans and open-end lines of credit, as well as the effective date for any change in the closed-end coverage threshold.  Since the comment period is being reopened, the CFPB does not look to finalize any change to the closed-end threshold by January 1st.  As a result, the CFPB is looking for comments on a mid-year effective date (e.g. May 2020) versus a January 1,2021, effective date.  Our comment letter for this proposal is also available in our Free Lending Tools.  Comments must now be submitted to the CFPB by October 15th.

Get your comments in today!