All in HMDA

One might think that using the HMDA partial exemption for small filers would make life easier.  Much easier. Well, for the most part, that is true. The CFPB’s interpretive and procedural rule provides relief for certain “small HMDA filer” so that they are exempt from reporting about half of the data fields (22 out of 48 total data fields).  The problem with the HMDA partial exemption, however, is that the rules to comply with the partial exemption are actually quite confusing. For example, the CFPB interpretive and procedural rule provides a number of different ways to report exempt data fields, and even creates some confusion on one particular data field: the State data field.

The new HMDA rules have created a whirlwind of challenges for HMDA reporters as reporters have had to learn which knowledge they could retain from the prior rules and which knowledge they had to adjust - not to mention the new elements that had to be learned.  The reality is that it takes time to get all of the “kinks out” when learning a new, especially one that is as complicated as HMDA and Regulation C. A prime example of the challenges that are created due to the implementation of a new rule is the HMDA loan amount when there has been a counteroffer.

On October 23, 2018, the CFPB released the Filing Instruction Guide (FIG) for data collected in 2019.  This guide comes less than two months after the most recent version of the guide (August 2018), but is designed to be used for data collected during 2019.  The FIG is considered to be a “technical resource to help financial institutions file HMDA data collected in 2019 and reported in 2020.”

One of the biggest challenges that came with the January 1, 2018 HMDA changes relates to the difference between a refinance and a cash-out refinance.  On the surface, it would not seem to be that difficult but the specifics can actually get quite complicated. Therefore, it is imperative that each HMDA reporter fully understand the difference between a cash out refinance and a refinance.

HMDA Partial Exemption Resources

In this atypical Compliance Clip (video), Adam explains why those who qualify for the HMDA partial exemption will probably want to use it as quickly as possible. He also manages to relate one of his most embarrassing stories to HMDA.

For years, HMDA has caused all kinds of headaches.  In fact, the acronym “HMDA” itself could just as easily stand for Head Migraine Day Again.  The reason for this, of course, is that HMDA is an infinitely detailed rule, but the rules don’t address every situation which often leaves those responsible stuck between a rock and a hard place, which I commonly refer to as the “gray area” of HMDA.  One area that seems to be in this category relates to how an interest buyout should be reported for HMDA purposes. This article attempts to break down the HMDA purpose reporting requirements for “interest buyout” loans.

Demographic Information for HMDA & Regulation B

What's the difference between government monitoring information and demographic information? This Compliance Clip (video) explains the differences in information collection under Regulation B and HMDA while also explaining when a bank must comply with one rule or the other for collecting information. In an attempt to make things easier to understand, Adam provides a number of common exemptions for collecting the GMI/DI information.