Insights gathered will support a fairer mortgage market
Today, the Consumer Financial Protection Bureau (CFPB) issued a Request for Information (RFI) to seek input on rules implementing the Home Mortgage Disclosure Act (HMDA). The CFPB plans to review recent changes to the rule and evaluate their effectiveness. This evaluation will strengthen the CFPB’s ability to maintain a fair, competitive, and non-discriminatory mortgage market.
HMDA, which was originally enacted in 1975, requires many lenders to report information about the home loans for which they receive applications or that they originate or purchase. The public and regulators can use the information to monitor whether financial institutions are serving the housing needs of their communities, to assist in distributing public-sector investment so as to attract private investment to areas where it is needed, and to identify possible discriminatory lending patterns. The CFPB maintains an online tool that provides access to the public loan data, allowing users to filter information, create summary tables, download the data, and save their results.
The CFPB finalized changes to the HMDA regulations in 2015, expanding the types of data reported by lenders to improve overall market information and help with monitoring for fair lending compliance. The 2015 rule also improved the reporting process by aligning requirements with industry data standards, significantly enhancing the technological interface, and easing requirements for some small banks and credit unions.
The CFPB is seeking comment from the public to ensure the Bureau can use the data collected under the HMDA Rule to most effectively meet the rule’s goals.
The CFPB is seeking comments on its plans to assess the effectiveness of the HMDA Rule. Specifically, the CFPB will focus on:
- Institutional coverage and transactional coverage;
- Data points;
- Benefits of the new data and disclosure requirements; and
- Operational and compliance costs.
The CFPB welcomes the public’s input, and the RFI will remain open for 60 days after publication in the Federal Register.
The RFI follows an August 2021 HMDA report, which found that mortgage lenders more often deny credit and charge higher interest rates to Black and Hispanic applicants than they do to white applicants, and a July 2021 CFPB analysis of mortgage lending patterns within the Asian American Pacific Islander (AAPI) communities. The July 2021 CPFB analysis, using the expanded reporting of racial and ethnic data made possible by the 2015 HMDA rule, found considerable heterogeneity among AAPI communities, with some subgroups showing mortgage denial rates similar to those of Black and Hispanic borrowers. The CFPB has also made use of the enhanced data in a May 2021 report studying the financing of manufactured housing loans.
The CFPB’s online HMDA tool is available at: consumerfinance.gov/hmda/