If you are an HMDA Bank, you are fully aware of how the CFPB’s 2018 HMDA Rule shook things up! It comes as no surprise, then, that HMDA data collection and reporting errors are one of the most common findings we see in our bank reviews.
From a loan officer’s perspective, it is important to ensure the scenario at the time of application is well-documented.
Remember, HMDA is an application regulation. While most loan officers are pretty comfortable with collecting Demographic Information and completing the form, there are still quite a few areas that could be documented at the time of the application that would make the review and reporting process much easier.
While some things may seem perfectly obvious and may not warrant writing them down, these can become sticking points later in the year. For example, consider a mixed-use property that has both commercial and residential space. The determination of whether the primary purpose of the mixed-use property is a dwelling or not may be obvious to the lender now, but trying to recall the reasons behind that thought process or determination may be a lot more difficult many months later. Remember, you have flexibility under Section 1003.2(f) when making a reasonable determination of whether you have a dwelling or not when it comes to mixed-use properties. It can be very helpful if that determination is made early and documented clearly!
Clear documentation of the specific application scenario, the type of loan that was applied for, and/or the reasons for the action taken can cut out a whole lot of guesswork down the road.
David’s banking career began as a field examiner for the FDIC in 1990. He later became a Compliance Officer and Loan Officer for a small bank. In 1993, he established Banker’s Compliance Consulting. Along with his amazingly talented Team, he has written numerous compliance articles for prestigious banking publications and has developed compliance seminars that Banker’s Compliance Consulting produces.
He is an expert in compliance regulations. He is also a motivational speaker and innovative educator. His quick wit and sense of humor transforms the usually tiring topic of compliance into an enjoyable educational experience. David is on the faculty of the American Bankers Association National Compliance Schools and has served on the faculty of the Center for Financial Training for many years. He also is a frequent speaker at the ABA’s Regulatory Compliance Conference. He is also a trainer for hundreds of webinars, is a Certified Regulatory Compliance Manager (CRCM) and has been a BankersOnline Guru for many years. The American Bankers Association honored David with their Distinguished Service Award in 2016.
David and his wife Karen have three adult children, four grandchildren (none of whom live at home!) and two cats (of which Dave is allergic … the cats, not the children!). They recently moved to an acreage outside of Lincoln, Nebraska where he gets to play with his tractor. When possible David can be found fishing, making sawdust in his shop, or playing the guitar and piano. He also enjoys leading worship at his church.