BY JASON SKEMP
Is your credit union ready for the expanded data collection requirements the Home Mortgage Disclosure Act is about to add? These three tips will ensure the Big Data revolution doesn’t turn into big headaches for CUs that participate in mortgage lending.
It seems everyone wants to participate in the Big Data revolution. Even U.S. lawmakers are getting in the game, expanding requirements to collect more information from financial consumers. For its part, the Consumer Financial Protection Bureau (CFPB) has said it will add up to 22 new fields to its Home Mortgage Disclosure Act (HMDA) data collection requirements come late summer. The idea is to have a better grasp on the nation’s fair lending practices to ensure a healthy and diverse mortgage lending environment.
The fact is some credit union loan officers already have difficulty meeting HMDA data collection requirements. With even more complexity on the horizon, now is the time to make sure your policies, procedures, software and staff are a finely tuned, well-oiled HMDA reporting machine.
Double Check Data Collection Procedures.
First things first – is your credit union properly collecting data from both approved and denied applicants? Staff members taking the applications must understand their responsibilities specific to HMDA regulations. One of the common missteps we see is staff being unaware that they still have to report some data even when an applicant says he or she does not wish to supply that data. This is true only when a loan officer is taking the application in person. The loan officer is then required to designate the applicant’s race, ethnicity and gender based on surname and/or visual observation.