To avoid potential monetary penalties financial institutions must have reasonable policies and procedures associated with the accuracy of HMDA reporting.
Both HMDA and Fair Lending rules and enforcement are in transition: from the recent changes in reporting requirements with HMDA to new developments at the Consumer Financial Protection Bureau (CFPB) regarding Fair Lending enforcement.
In this time of uncertainty, it is important for lenders to continue to hold the greatest standard of regulatory compliance to ensure fair and equal treatment of borrowers and the adequate and effective reporting of such lending activities.
Implications of Expanded HMDA Data and Fair Lending:
Greater transparency into Fair Lending activities will occur with the increased scope of reportable fields such as credit score, total points and fees, and loan features. Therefore, errors in reporting will not only cause inaccuracies on the HMDA LAR (Loan Application Register), but also may create Fair Lending anomalies where no such anomalies exist.
HMDA Industry Observations:
Navigant at Work:
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