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CFPB Seeks Insight On Creating A Fairer Mortgage Market

Navi Persaud
Nov 17, 2021
CFPB Seeks Insight On Creating A Fairer Mortgage Market

The Consumer Financial Protection Bureau has been actively looking to create a fairer mortgage market, free of discriminatory engagements. To do so, it issued a Request for Information to seek input on rules implementing the Home Mortgage Disclosure Act.

In its quest to create a fairer mortgage market, the CFPB is looking to review recent changes to the rule and assess the effectiveness of these changes. 

“HMDA, which was originally enacted in 1975, requires many lenders to report information about the home loans for which they receive applications or that they originate or purchase,” according to the CFPB.

“The public and regulators can use the information to monitor whether financial institutions are serving the housing needs of their communities, to assist in distributing public-sector investment so as to attract private investment to areas where it is needed, and to identify possible discriminatory lending patterns. The CFPB maintains an online tool that provides access to the public loan data, allowing users to filter information, create summary tables, download the data, and save their results.”

According to a recent press release, the CFPB finalized changes to the HMDA regulations in 2015, expanding the types of data reported by lenders to improve overall market information and help with monitoring for fair lending compliance. Additionally, the 2015 rule also improved the reporting process by aligning requirements with industry data standards, significantly enhancing the technological interface, and easing requirements for some small banks and credit unions.

Now, the CFPB is seeking comment from the public to ensure the Bureau can use the data collected under the HMDA Rule to effectively meet the goals set forth by the rule and ensure a fairer mortgage market.

Specifically, the CFPB will focus on:

  • Institutional coverage and transactional coverage;
  • Data points;
  • Benefits of the new data and disclosure requirements; and
  • Operational and compliance costs.

The RFI will remain open for 60 days after publication in the Federal Register. The RFI follows an August 2021 HMDA report, which found that mortgage lenders more often deny credit and charge higher interest rates to Black and Hispanic applicants than they do to white applicants, and a July 2021 CFPB analysis  of mortgage lending patterns within the Asian American Pacific Islander (AAPI) communities.

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