IMPLEMENTING HMDA REPORTING
CHANGES IN YOUR INSTITUTION…
BY KATHY KELLER
LENDERS SHOULD ALREADY
BE IMPLEMENTING THE
UPCOMING HMDA CHANGES.
IMPLEMENTATION IS
COMPLEX,
AND THE
TIME TO
START HAS
PASSED.
Just as the mortgage industry has
started to emerge from the
challenges of “Know Before You Owe” (TRID),
revisions to the Home Mortgage Disclosure Act
(HMDA) are fast approaching. The good news: We
can take the lessons learned from TRID and apply
them to implementation of the HMDA changes.
The industry should not repeat some key mistakes:
underestimating the rule’s complexity, failing to
thoroughly plan ahead, and excessive reliance
on software vendor solutions. Like TRID, HMDA
impacts much more than just software and data.
expand the
data set. The
resulting HMDA
data set includes
new information and modifies previously reported
information to allow interested parties to look at the
data in new and potentially important ways.
Good implementation strategies require
considerations beyond just data. It is also critical
for lenders to examine their business process,
technology, and organization to effectively
implement the change.
HMDA’s fundamental purpose has not
changed—the law fosters transparency about who
has access to mortgage credit in the United States.
The revised reporting provides significant additional
data to the government and advocacy groups to
help with their assessments of mortgage lending
patterns. The Dodd-Frank Act expanded the HMDA
reporting requirements to further these objectives.
CFPB published the new rule in October 2015
and has used its administrative authority to further
HMDA-reportable data is created and changed
through business processes, collected and tracked
through technology, and solicited from consumers
by people. It comes from a variety of sources—
third parties, vendors, business channels, etc.—any
of which may use different systems. Staff must
be trained on system changes and be prepared
to communicate differently with consumers. The
HMDA reporting implementation warrants a deeper
examination and a disciplined implementation
approach.
