THE CFPB Gives an Inside Look at Its New HMDA Portal

September 30, 2017 by Bryan P. Redington, Esq.

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.