Effective January 1, 2018, the Consumer Financial Protection Bureau (CFPB) has added 84 data fields that must be reported on the Loan Application Register (LAR) as required by the Home Mortgage Disclosure Act (HMDA). Since January 1, 2018, there have been 27 Enforcement Documents related to LAR from OCC, CFPB, and FDIC. The newly revised rule increases the collected fields by 73%. The Home Mortgage Disclosure Act was approved in 1975 and requires mortgage lenders to keep records of certain key pieces of information regarding their lending practices. This information includes the types of loans approved and denied along with ethnic and racial information of loan applicants. The primary purpose of HMDA is to help authorities monitor discriminatory and predatory lending practices, as well as to ensure government resources are allocated properly.
The new rule expands on the data collected from covered mortgage transactions as mandated by the Dodd-Frank Act and CFPB discretion for additional fields. Original data fields included; loan type, purpose, occupancy, loan amount, an action is taken (approved, denied, etc.), ethnicity, race, sex, census tract location, income, and lien status. The amendment has added fields such as; property address, age, credit scores, closing costs, interest rate, term, debt-to-income ratio, loan-to-value ratio, property value, and originator NMLS number. As banks scramble to comply with the massive data reporting changes soon to be in effect, there is the looming question yet to be addressed.