HMDA Small Entity Compliance Guide

The CFPB has released an updated version of the HMDA Small Entity Compliance Guide.  We’re not certain why it’s called a “small entity” guide, as any institution subject to HMDA would benefit from reviewing it. It also has nothing to do with small entities and is certainly not small being it’s 138 pages long!

 

The guide was updated to reflect the “small filer” exemptions granted earlier this year (loans between 25-499 in each of the last 2 years). There are also some clarifications to other parts of the regulation.  For example, Section 4.1.2 clarifies which transactions count when determining if a loan-volume threshold has been met.  Section 5.8. clarifies the loan amount to report when a counteroffer is made.  There are other numerous technical corrections throughout the Guide, as well.

 

We encourage you to review the Guide to ensure you are on the right track! If you need more HMDA training, we’ve got the solutions! We’ve conducted several webinars in 2018 and have more planned for 2019 that can provide with you an in-depth training on the requirements of this complicated regulation.  Check out our store for these great training opportunities!

 

Published
2018/11/05

HMDA Filing Instruction Guides

The Bureau of Consumer Financial Protection (the BCFP, formerly known as the CFPB, but I digress) has released a new Filing Instruction Guide (FIG) to help you file your HMDA-LAR data.  That’s a lot of acronyms in one sentence! J  But this new FIG is not for your 2018 data!  It’s for your 2019 data.  The last FIG for 2018 data was dated September 2018.  The new FIG is dated October 2018, but again, only for your 2019 data.  This seems a little confusing, so allow me to explain.

 

If you don’t already know, the FIG is the way the BCFP announces technical changes to HMDA.  For instance, if there are no origination fees, do you enter “0”, leave it blank, report “NA” or is there a code to represent this?  The answer can only be found in the FIG and there are inconsistencies between various data fields.  For example, if there are no origination fees, you enter “0”, but if there are no discount points, you leave it blank. The answers to these questions can vary from FIG to FIG, so you have to check the latest edition (or the last one relevant to the year you are reporting) carefully.  You can check out all the FIGs that have been released (as well as other HMDA resources) here.

 

We’re almost a full ten months in with collecting the expanded HMDA data, which means your first HMDA-LAR submission isn’t that far off.  How are you auditing your HMDA data to ensure it’s correct?  If you need some guidance, tips, trick and or problem areas to focus your efforts, be sure to check out our Auditing HMDA webinar on October 31st!

 

Published
2018/10/29
David Dickinson

Cruise into Compliance with Banker’s Compliance Consulting!

January 25 – February 1, 2020

You know the Banker’s Compliance Consulting team produces fun and educational compliance training events.  If you’ve been on a cruise, you know they are exciting.  We are combining these two great events into one amazing conference!

 

 

 Here are the details you’ve all been waiting for!

 

  • We will be sailing with Celebrity Cruise Lines on the “Equinox” from January 25-February 1, 2020.  This 7-day cruise will depart from Ft. Lauderdale, Florida, with stops at Key West, Costa Maya, Cozumel, and Grand Cayman.
    • Cruising is exciting like no other vacation. It’s virtually a floating hotel taking you to exotic locations for a whole week! Celebrity’s cruise line is top-notch and like no other cruise line. You are going to be treated like a “celebrity”!
    • Two full days of training while we’re at sea where you will receive compliance training from some of the best instructors in the nation: Dave Dickinson and Jerod Moyer (from Banker’s Compliance Consulting) and Paul Osborne (from Crowe LLP).
    • Shorter (flash & Q&A) sessions on the days we are in port.
    • The trainers will be available each night of the entire cruise so you can network with them and get your questions answered.
    • You’ll have nearly 20 hours of CRCM-approved compliance training!  Most national conferences don’t pack that much training in a 3- or 4-day format.
    • You’ll have numerous opportunities to network with the trainers and other compliance professionals and just simply relax!

Register NOW – space is limited!

  • We will be providing the latest in regulatory compliance training while enjoying warm islands and beaches!  This cruise will be educational and loaded with fun!  Here’s the lineup:
  • We are limiting this to the first 200 conference registrants to ensure that we have comfortable space in the meeting rooms for the participants.  A spouse, significant other, friends and/or children can also join you by paying only for the cruise ship portion.
  • You’ll need to register separately for both the conference and cruise ship:
  • Be sure to get your passport now (or get it renewed, if necessary)!

What is the cost?

If you’ve ever attended a national conference for 3-4 days, you know they are expensive.  Registration, lodging (typically $250-300/night) and food, easily add up to over $3,000.  What’s great about this cruise is you get all the food you want to eat, a room to yourself and great training sessions – it’s all included! You also get a 7-day cruise on top of the great compliance training!

  • The price of the Cruise and Conference is $2,630 which is based on an inside stateroom with single occupancy.  This fee includes all meals and lodging on the ship, taxes, gratuities, and the conference registration fee.  Our cruise consultant informed us of the price of the ship will likely go up as we get closer to the sailing date.
  • Want to upgrade your room, bring someone with you, or explore various cruise packages (such as unlimited drinks, Wi-Fi, port excursions, and others), simply contact Sherry. She can help you choose which cabin suits your budget and can even arrange a monthly payment plan for your cruise portion of this training at sea.

Questions?

 

Published
2018/10/03

HMDA Audit Webinar

Join us for our HMDA Audit on September 31, 2018. We will answer all the questions submitted during the live webinar, in writing, such as:

 

Question: We qualify for the HMDA Small Filer exemptions.  Do we even need to worry about auditing the exempt fields on our LAR?

 

Answer: Even if you’re a Small Filer and taking advantage of the exemptions, you still need to make sure you’re reporting the correct exempt codes in the exempt fields.  This can vary and honestly, is more complex than we feel it needed to be.  Auditing is still important, even for Small Filers.

 

 

Register Now – https://store.bankerscompliance.com/link/HMDAAUDIT10-18

HMDA “Small Filer”

 

The wait is over!  On Friday, August 31st, the CFPB released a HMDA small filer exemption! At least that’s what we’re calling it.  Speaking of plain English, we’re going to take all of this information, digest it, and deliver it to you in a one-hour webinar on September 18th.  We’ll do the heavy lifting and you’ll get all the details, a complete manual, a video recording, questions and answers – so you can keep doing what you do best – serving your customers.  Sign up today! 

 

Let’s talk – July 5th the CFPB made a preliminary announcement that this was coming and I produced a video blog and a coverage chart (included in the monthly newsletter and the upcoming webinar).

 

If you originate less than 500 closed in loans or 500 lines of credit in each of the two proceeding calendar years, then you are a HMDA small filer!  If you qualify for the exemption, then you don’t have to report a bunch of data.  Lucky you!

 

Let’s dive into this just a little bit. Now, it could be that you qualify for the loans but not the lines, or the lines but not the loans. Apply this exemption to loans or just to lines. You’re not eligible if you messed up CRA. In other words, if you got a needs to improve in each of your last two CRA exams or a substantial noncompliance in your last CRA exam, you’re not eligible for the exemption. Even though you originate less than 500 loans or lines, you don’t get to take advantage of the exemption. Sorry!  Just don’t go there.

 

If we qualify, when can we start reporting less data? Well, basically May 24th, but the CFPB passed it back retroactively to January 1st.  All of your 2018 loan application registered entries are subject to this exemption. There are 26 items that you don’t have to report! I recommend viewing my July 5th video blog – the laundry list is there! If you get our monthly newsletter, we spelled them out there too. Or, go to page 18 of the final rule and you’ll see the list in two columns of those things that are exempt and those things that you still have to report. Things like rate spread, origination charges, discount points, interest rate, debt-to-income – they’ve knocked them all out!  You can voluntary report all this, but why? Maybe it’s a system issue.  The Filing Instruction Guide (FIG) was updated in August and now you use the word “exempt” or there’s a code “1111” that you’ll use depending on if it’s an alphanumeric or numeric value that you’ll enter that says we don’t have to report this. I recommend that you don’t report anything you don’t have to because if you’re wrong then it’s a citation. You might have some civil money penalties. You might have to rescrub and refile. If you want to still collect data great, but don’t report it.

 

I recommend that you still collect debt-to-income, loan-to-value, and credit score. That is defensive information that you can use in case you’re being questioned from a fair lending standpoint.  You can use this information to justify why you denied or charged somebody more, etc. But again, I would not report that information. Simply collect it and have it readily available in your defense.

 

Again, you can voluntarily report data, but if you decide you want to, there are 7 items that if you report one you’ve got to report them all. Let me explain. For example, property address, credit score, reasons for denial, total loan costs or total points and fees (5 data points), non-advertising features (4 data points), application channel, and automated underwriting…there’s not just one data point per each category. There’s two or three or up to five data points. So, if you decide to report any of the loan costs, you have to report all five data points in the loan costs category. If you report any of the non-advertising features, you have to report all four of them. If you go there, you must complete them all. It doesn’t mean that if you do credit score you have to do reasons for denial. Within reasons for denial, there’s more than one data point. You can’t just do half of it.

 

Here’s another couple of quirky things to keep in mind:

 

  • Reasons for denial is no longer something that the CFPB is requiring under HMDA, but the OCC does require it. Also, if you were regulated by the OTS, and you switched over to a FDIC charter, then you still have to report the reasons for denial. This is the way it was prior back in 2015. So, in other words, let me say it this way: banks regulated by the FDIC and the Federal Reserve that were not previously OTS do not have to do reasons for denial. But, all OCC and those FDIC that were OTS will have to do reasons for denial. Sorry, I just give you the plain English version, but I didn’t write the rule!

 

  • The Universal Loan Identifier is one of the exempt data pieces, but you still have to have some way to uniquely identify every application. The CFPB is calling it a non-universal loan identifier. Boy isn’t that creative? You don’t have to use your legal entity identifier. You don’t have to use a check digit. It can be up to 22 digits long. It can’t contain any information that would allow someone to be able to identify the applicant. So, it’s got to be confidential. If you’re a small filer and you sell a loan to a purchaser that is not a small filer, then they’re going to have to assign a ULI to it. So, they might make you use a ULI because they have to use a ULI.

 

I recommend that you do not report any of this optional data. Instead, report it as “exempt” or code “1111″, but again still collect debt-to-income, loan-to-value, and credit score, and information to defend your practices. There are 22 data points that are still required. Again, go to my July 5th video blog or page 18 of the final rule for the laundry list. The CFPB says they will be modifying Regulation C. Right now it’s just a narration, they haven’t codified it yet, but they will.  Go to the CFPB’s website and download the August 2018 version of the Filing Instruction Guide (FIG). Register for our one-hour webinar on Tuesday, September 18th for all the details, written questions and answers, and a recorded webinar to share with your team and view as many times as you’d like. We’ll see you there.

 

Published
2018/09/05
David DIckinson