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The Independent Community Bankers of America (ICBA) has called on the Consumer Financial Protection Bureau (CFPB) to ensure its proposed changes to the Home Mortgage Disclosure Act (HMDA) do not restrict community bank lending. In a comment letter, ICBA said that the CFPB’s proposal to expand data collection and reporting rules will compound existing regulatory and paperwork burdens affecting community banks, their customers and their communities.
“Regulatory compliance is continuing to deplete the resources of community banks, which directly affects their ability to compete in the marketplace and offer consumer alternatives to the one-size-fits-all products and services offered by big banks,” ICBA Vice President and Regulatory Counsel Elizabeth Eurgubian wrote. “We strongly urge the CFPB to finalize new HMDA requirements with a balanced approach that does not restrict the lending businesses of smaller and less complex banks.”
ICBA wrote in the comment letter that while it recognizes the significance of HMDA data in showing how financial institutions meet the housing needs of their communities, the costs of the CFPB’s proposed changes would outweigh the benefits. With community banks already facing new qualified mortgage, escrow, officer-compensation, servicing and disclosure requirements, the expanded data-reporting standards would further prevent community banks from making residential mortgage loans and supporting the housing recovery. Meanwhile, none of the additional data points proposed by the CFPB but not required by statute would add value to data the bureau already collects, ICBA wrote.
Instead, ICBA encouraged the CFPB to take a balanced approach to the rulemaking that does not require data reporting not specifically mandated by Congress. The association said extraneous data reporting does not necessarily provide a better understanding of lending practices, merely creates new data sources of questionable value, and can raise consumer privacy concerns.