Earlier this week, the CFPB issued a Request for Information (RFI) regarding an assessment of the significant amendments to the Home Mortgage Disclosure Act rules, known as Regulation C, adopted in October 2015 and subsequently revised in several additional rulemakings (the “HMDA Rule”). Responses to the RFI will be due 60 days after it is published in the Federal Register. It is clear from the title of the CFPB’s press release announcing the assessment, “CFPB Seeks Input on Detecting Discrimination in Mortgage Lending,” that the CFPB is treating this assessment as an initiative addressing fair lending.
Under the Dodd-Frank Act, the CFPB must conduct an assessment of each significant rule or order it has adopted under federal consumer financial law and publish a report of each assessment no later than five years after the effective date of the rule or order. The CFPB advises that while it determined that the HMDA Rule is not a significant rule for purposes of the Dodd-Frank Act, the CFPB “considers the HMDA Rule to be of sufficient importance to support the [CFPB] conducting a voluntary assessment.” The CFPB plans to issue a report of its assessment not later than January 1, 2023 (most of the October 2015 amendments became effective on January 1, 2018).
The CFPB advises that it intends to focus its evaluation on the following primary topic areas: (1) institutional coverage and transactional coverage, (2) data points, (3) benefits of the new data and disclosure requirement, and (4) operational and compliance costs. The CFPB’s public guidance that sets forth the balancing test used to determine whether and how HMDA data should be modified prior to its disclosure to the public to protect applicant and borrower privacy is outside the scope of the assessment. With regard to operational and compliance costs, the CFPB notes that it “will work from the methods and findings it published with the cost-benefit analysis in the 2015 HMDA Final Rule [and] will also use comments responding to this request for information to determine whether those methods and findings remain valid.”
The CFPB requests information on a number of specific issues, including:
- Data and other factual information that the CFPB may find useful in executing its assessment plan and answering related research questions, particularly research questions that may be difficult to address with the data currently available to the CFPB.
- The specific data points reported under the HMDA Rule that help meet the objectives of the Rule.
- Data and other factual information about the benefits and costs of the HMDA Rule for communities, public officials, reporters, mortgage industry participants, or other stakeholders, the effects of the rule on transparency in the mortgage market, and the utility, quality, and timeliness of HMDA data in meeting the Rule’s stated goals and objectives.
- Data and other factual information about the accuracy of estimates of annual ongoing compliance and operational costs for HMDA reporters, or the analytical approach used to estimate these costs, as delineated in the Small Business Review Panel Report issued by the panel that the Bureau convened and chaired in 2014 pursuant to the Small Business Regulatory Enforcement Fairness Act. In particular, the CFPB seeks comments:
- Related to the nature and magnitude of any operational challenges in complying with the HMDA Rule, and whether they are significantly different from those delineated in the published Report of the Small Business Review Panel.
- Delineating and describing the ongoing costs incurred in collecting and reporting information for the HMDA Rule, and whether they are significantly different from those delineated in the published Report of the Small Business Review Panel.
- Recommendations for modifying, expanding, or eliminating any aspects of the HMDA Rule, including but not limited to the institutional coverage and loan-volume thresholds, transactional coverage, and data points.