Consumer Financial Protection Bureau Updates HMDA Guide
The Consumer Financial Protection Bureau (“CFPB”) has published an updated HMDA Small Entity Compliance Guide. You can access the updated guide at https://www.consumerfinance.gov/policy-compliance/guidance/hmda-implementation/.
Regulatory Solutions specializes in helping you scrub your HMDA data to ensure the data you are submitting on your HMDA LAR is correct. Contact us to discuss how we can assist you in this process. Read more here >
HMDA Scrub Sample Size
What percentage of loans or applications on the HMDA LAR should I scrub?
This is a question we get asked quite often and my response is that you should look to the percentage examiners scrub. The Federal Financial Institutions Examination Council’s (FFIEC) HMDA Examiner Transaction Testing Guidelines (Guidelines) describe the validation process which examiners use and the circumstances in which examiners may direct institutions to correct and resubmit HMDA data. The examiners select a random sample of loans/applications to test using the following sample sizes and thresholds as indicated in the Guidelines at https://files.consumerfinance.gov/f/documents/201708_cfpb_ffiec-hmda-examiner-transaction-testing-guidelines.pdf:
| Total Sample Size (A) | Initial Sample Size (B) | Initial Sample Threshold (C) | Resubmission Threshold (D) | ||
| # | % | ||||
| 25-50 | 30* | 15 | 2 | 3 | 10.0* |
| 51-100 | 30 | 20 | 2 | 3 | 10.0 |
| 101-130 | 47 | 29 | 2 | 3 | 6.4 |
| 131-190 | 56 | 29 | 2 | 3 | 5.4 |
| 191-500 | 59 | 30 | 2 | 3 | 5.1 |
| 501-100,000 | 79 | 35 | 2 | 4 | 5.1 |
| 100,001+ | 159 | 61 | 2 | 4 | 2.5 |
*If less than 30 LAR lines, the institution should use the full sample size and the resubmission threshold remains at 3.
Let us scrub your HMDA data against source documents and provide you with an exception-based report indicating the percentage of errors by data point. You select your sample size either using the Guidelines or a certain percentage of HMDA loans/applications. Contact us today to discuss your HMDA scrub.
Data Points Covered by Partial Exemptions
The Bureau of Consumer Financial Protection issued an interpretive and procedural rule on August 31, 2018, to implement and clarify section 104(a) of the Economic Growth, Regulatory Relief, and Consumer Protection Act, which amended certain provisions of the Home Mortgage Disclosure Act (HMDA). The rule allows certain insured depository institutions and insured credit unions (based on thresholds for the number of closed-end and/or open-end loans originated during a given year) to be partially exempt for certain data point reporting. Below is a chart detailing the data points covered by the partial exemptions and the correct code to use on the HMDA LAR to signify exemption.
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Data Points Covered by Partial Exemptions
| Data Points Covered by Partial Exemptions | Correct Code for Exemption |
|---|---|
| § 1003.4(a)(1)(i) – Universal Loan Identifier | Unique, within the insured depository institution, loan or application identifier that can be up to 22 characters |
| § 1003.4(a)(9)(i) – Property Address (street address, city, zip code) | Exempt |
| § 1003.4(a)(12) – Rate Spread | Exempt |
| § 1003.4(a)(15) – Credit Score | 1111 |
| § 1003.4(a)(15) – Name and Version of Credit Scoring Model | 1111 |
| § 1003.4(a)(16) – Reasons for Denial | 1111 (Leave the remaining Reason for denial data fields blank) |
| § 1003.4(a)(17) – Total Loan Costs or Total Points and Fees | Exempt |
| § 1003.4(a)(18) – Origination Charges | Exempt |
| § 1003.4(a)(19) – Discount Points | Exempt |
| § 1003.4(a)(20) – Lender Credits | Exempt |
| § 1003.4(a)(21) – Interest Rate | Exempt |
| § 1003.4(a)(22) – Prepayment Penalty Term | Exempt |
| § 1003.4(a)(23) – Debt-to-Income Ratio | Exempt |
| § 1003.4(a)(24) – Combined-Loan-to-Value Ratio | Exempt |
| § 1003.4(a)(25) – Loan Term | Exempt |
| § 1003.4(a)(26) – Introductory Rate Period | Exempt |
| § 1003.4(a)(27) – Non-Amortizing Features Balloon Payment Interest-Only Payment Negative Amortization Other Non-Amortizing Features | 1111 (enter code for each one) |
| § 1003.4(a)(28) – Property Value | Exempt |
| § 1003.4(a)(29) – Manufactured Home Secured Property Type | 1111 |
| § 1003.4(a)(30) – Manufactured Home Land Property Interest | 1111 |
| § 1003.4(a)(32) – Multifamily Affordable Units | Exempt |
| § 1003.4(a)(33) – Submission of Application | 1111 |
| § 1003.4(a)(33) – Initially Payable to Your Institution | 1111 |
| § 1003.4(a)(34) – Mortgage Loan Originator Identifier | Exempt |
| § 1003.4(a)(35) – Automated Underwriting System (AUS) | 1111 (Leave the remaining AUS blank) |
| § 1003.4(a)(35) – Automated Underwriting System Result | 1111 (Leave the remaining AUS results blank) |
| § 1003.4(a)(36) – Reverse Mortgage Flag | 1111 |
| § 1003.4(a)(37) – Open-End Line of Credit Flag | 1111 |
| § 1003.4(a)(38) – Business or Commercial Purpose Flag | 1111 |