Added on May 8, 2017
The implementation of the CFPB 2018 HMDA changes is now about a year and a half away. The new changes will more than double the number of reportable HMDA data fields that institutions must collect, edit and submit. In analyzing the new fields that were added to the HMDA requirement, we have identified 14 fields that presently exist within RATA Comply HMDA/CRA and 39 fields that will need to be created. The new fields to be added are for automated underwriting, expanded race and ethnicity as well as general loan and property data points.
The submission format for the 2016 data will be unchanged from the last few years. The 2017 submissions will contain the exact same data but they will be wanting to receive it in the new pipe-delimited format. We guess they are just wanting institutions to get used to using that format but we believe it will cause confusion. For the next three years' submissions institutions will use three different formats to submit the data!
As yet to be determined are the required edit changes for the 2018 reporting year. These edits will likely be substantial, given the new fields and the number of enumerated values for those fields, as well as the rules regarding the combining of the field values. We foresee a significant increase in the number of edits, both Quality and Validity, which will need to be incorporated upon release. As yet, there has been no public activity on the CFPB's part in regards to new edits.
The Universal Loan Identifier (ULI) has been a source of concern for many clients. Due to its requirement in the submission file we have come up with a solution that will help institutions standardize the ULI in Comply. RATA will be adding Legal Entity Number to Reporting Entity Properties in Comply. During an import, the process will automatically determine if an application number is already in the ULI format or not. If it is in the format it will break it down into its individual components. If the application number does not contain a ULI it will be automatically calculated in Comply. On the application screen Comply will show the application number separately and will also show a read-only field with the calculated ULI with Lender number including the check digit. So basically Comply will have the ability to use an existing ULI if available from your loan origination system(s), or in event you do not have one, it will be created for you.
Many of the comments regarding the final changes expressed serious security concerns with the new fields being captured and submitted; the reporting of Age, Credit Score, Combined LTV and Debt-to-Income for example could be used for any number of improper purposes. Since the Comply software is housed within your infrastructure, the data will be secured using your facility's security measures, so there is no concern from the Comply perspective. From the perspective of the CFPB however, this is still an open issue. Many industry commenters have remarked on the need for enhanced security and redaction of certain data when disseminating it to the public. The CFPB simply states that they will take a balanced approach in determining what data to distribute and will make that determination at a later date.
Learn more about the upcoming 2018 HMDA changes on the CFPB HMDA Rule Implementation page.