The Home Mortgage Disclosure Act was enacted in 1975, and codified as the Federal Reserve’s Regulation C – Home Mortgage Disclosure Act (HMDA). In July 2011, rule-writing authority for Regulation C was transferred to the Consumer Financial Protection Bureau (CFPB). The HMDA requirements are intended to provide the public with data about certain applications for loans and their ultimate dispositions. The data can be used:
- To help determine if financial institutions are serving the housing needs of their communities;
- To assist public officials in distributing public-sector investment to needy areas as an inducement to private investment; and
- To assist in identifying potential discriminatory lending patterns and enforcing antidiscrimination statutes.
Regulation C requires a covered institution to report HMDA data to the appropriate Federal agency about home-secured loans that it originates or purchases, or for which it receives applications. It also requires those institutions to disclose certain HMDA data to the public. Regulation C and HMDA are considered part of the consumer protection laws and regulations; however, if the transaction meets the HMDA reporting requirements, it is covered whether the purpose of the application or loan is for consumer purpose or business purpose.
Covered institutions must collect data regarding applications for, and originations and purchases of, home-secured loans for each calendar year. The collected data must be recorded, within thirty calendar days after the end of the calendar quarter in which final action is taken (such as origination or purchase of a loan, or denial or withdrawal of an application), on a loan application register (LAR) in a prescribed format. The HMDA reporting requirements include timely and accurate compilation of the information and reporting the calendar-year data to the appropriate regulatory agency by March 1 of the following calendar year. Once the data has been submitted to the designated Federal agency (CFPB for data collected in 2018 for 2019 reporting), reviewed for accuracy and field validation, and any discrepancies have been resolved, the institution receives a report (disclosure statement) compiled from its submission. The institution must post a notice in its offices about the availability of the report.
The CFPB has issued a final rule for Home Mortgage Disclosure Act (HMDA) reporting. Enhanced data collection under the rule begins January 1, 2018, and the new data points will first be reported in 2019. There are 25 new data points, 14 fields modified from previous requirements, and nine unchanged, bringing the total to 48 unique data fields.