As we ring in the new year, it is helpful to recap where we are on three different HMDA fronts: 1) data collection, 2) ensuring data quality within the private data, and 3) disclosure and analysis of public data. In each area, I’ll describe the major developments over the last year or so and discuss the outlook for 2019.
Data collection by financial institutions
The 2018 Filing Instruction Guide (FIG) from the CFPB, reflecting an update based on S.2155, is here. The 2019 FIG is here. There are no substantive collection changes between 2018 and 2019. However, future years’ data collection may change as a result of a rule making that is expected in spring 2019. The CFPB said here that they will publish a rule including a “reconsideration of the 2015 HMDA rule”. The CFPB will revisit the collection of fields that the CFPB had used its discretion to require. Fields added by the CFPB under this discretionary authority include: the debt-to-income ratio, combined loan-to-value ratio, discount points, and origination charges, and about twenty other fields by my count.
Data quality of private data
In late 2017, the CFPB issued a statement advising that there would be no penalties for data quality issues in data collected in 2018 and reported in 2019. Other federal banking regulators published similar statements (for example, this one). Throughout 2018, we’ve seen a large amount of lenders’ HMDA data that fail many edit checks. At the time of writing, the CFPB portal that tests whether lender data passes those edit checks is in beta testing. The CFPB substantively changed the edit checks as recently as August 2018. An open question is whether regulators will assess penalties based on data collected in 2019 and reported in 2020.
Disclosure and analysis of public data
In September 2017, the CFPB published “proposed policy guidance” on the public release of 2018 HMDA data. That guidance indicated which fields the CFPB would modify or redact prior to public release. The CFPB has not updated and finalized the guidance, though they have said they will “in the next few months”. Also, as I wrote previously, the disclosure of 2017 HMDA data is still not settled. The CFPB has said that sometime in 2019 it will finalize the dataset. Finally, we are expecting at least an initial release of the 2018 HMDA data to come around April 2019. Much to look forward to in 2019!