The Consumer Financial Protection Bureau (CFPB) has unveiled its latest
portal created to satisfy changes to the Home Mortgage Disclosure Act
(HMDA). The agency gave the mortgage industry a first look at the gateway
on Thursday, August 3, 2017.
The CFPB portal will be useful for institutions seeking organized reporting
and transparency. Instead of providing obscure HMDA reports and modified
Loan Application Registers (LARs) to the general public, institutions
will be able to direct their patrons to the HMDA gateway where such information
will be uniform and readily available for viewing.
A new HMDA regulation was enacted on October 15, 2015. The regulation expanded
the amount of data that lenders are required to provide in their reports.
Nearly two years later, on April 25, 2017, the CFPB proposed a cleanup
rule that gave more clarity to the first regulation. The newest rule called
for lenders to report the names, ages, and credit scores of borrowers
along with other aspects such as debt-to-income (DTI) ratio and the combined
loan-to-value (CLTV) ratio. New regulations also required that lenders
provide such information in a database system that the CFPB had not yet
developed. Such is the primary reason for the agency’s latest creation.
Although the full web-based tool will not be available for use as soon
as some may have hoped, the CFPB plans to launch a Beta version of the
system near the end of the third quarter of 2017 that institutions can
use to input required information. Such data will serve to help the CFPB
further perfect the portal for a better user experience. The full version
of the system will not be released to the public until after such changes
are made, which will be well after the fourth quarter. Nevertheless, the
portal will still be productive as the CFPB is slated to release the geocoder
and universal loan identifier tools during the fourth sector of this fiscal year.
It is not until after the gateway’s full version goes live that financial
institutions will see the entire benefit and convenience of the new CFPB
portal. Those responsible for their company’s HMDA reports will
need to create an account before being granted access to the back-end
of the system. Once in the portal, users will have an opportunity to input
information and ensure proper formatting for delivery of accurate disclosures.
The CFPB system is designed to reject reports that are not correctly formatted
or lacking pertinent information. Such a feature makes the life of the
reporter easier in the long run since he or she will not have to revisit
flawed documents after they have been submitted to the bureau. There is
also a File Format Verification tool that allows users to test the configuration
of 2017 reports before receiving a system automated rejection notice.
The CFPB plans to release a new verification tool for documents created
for the 2018 disclosure year.
The goal of this new portal is to streamline and simplify the often-confusing
reporting process for those who hit the required thresholds. The new system
will relieve a major pain point for companies who face daunting year end
submissions and formatting of HMDA data.