Let’s recap what has happened in 2023 on three different fronts: HMDA, fair lending, and CRA (the Community Reinvestment Act). I count eight important developments. These are listed in no particular order below:
1. OMB released a new MSA list in July 2023, which will be incorporated by FFIEC in 2024.
2. The 2022 HMDA Snapshot data were released in June 2023. A couple of observations:
a) Generally high-interest rates led to a precipitous drop in refinancings in 2022. The number and volume of refinancing loans decreased by 70% and 67%, respectively, between 2020 and 2022. There was also a much smaller decline (19%) in the number of home purchase loans between 2021 and 2022.
b) Institutions that originated between 25 and 100 closed-end loans were technically required to report HMDA data for the 2022 calendar years, but as a practical matter, there will be no penalties for failure to report. The 2023 Snapshot, expected to be released in June 2024, should include more of these smaller reporters.
3. DOJ enforcement actions: The Combatting Redlining Initiative, announced by the DOJ, CFPB, and OCC in 2021, led to the noteworthy resolution of six redlining enforcement cases in 2023. In total, DOJ consent orders have led to more than $100 million in penalties. All six of the institutions alleged to have redlined in 2023 were banks.
4. CFPB enforcement actions: In 2023, there were three noteworthy actions related to fair lending and Reg C. One was a complaint against a mortgage company for misreporting HMDA data over several years. There were also two consent orders involving large banks, one related to inaccurate reporting of GMI in HMDA data and failure to request GMI and another involved discrimination on the basis of national origin in credit card lending.
5. In May 2023, the CFPB issued a Final Rule implementing Dodd-Frank Section 1071, which covers small business lending data collection. There are currently multiple legal challenges to this rule, and the Supreme Court may weigh in before the rule becomes enforceable.
6. In October 2023, the Federal Reserve issued a draft Final Rule affecting the regulations that implement the Community Reinvestment Act (CRA).
The final text of the rule is not yet published in the Federal Register.
7. HMDA Filing Instruction Guide (FIG) updates: The most recent revision to the 2024 FIG came in November 2023.
Contact the team at ComplianceTech today to find out how we can help you stay up-to-date on the issues that matter to you.
Recent Comments