Recently, the CFPB released a blog post to remind mortgage lenders of its commitment to maintaining a fair, competitive, and nondiscriminatory market. The CFPB’s research found a small group of lenders and loan originators allegedly failed to report HMDA data, particularly demographic information for an abnormally large percentage of their total loan originations, which could be an indicator that this group was misreporting data. The Bureau’s analysis found thousands of loan officers who reported a lack of demographic information for 95 percent or more of their mortgage applications, raising concerns about potential discrimination. The CFPB noted its work against two major lenders for failing to report accurate data under the HMDA, one against a large mortgage lender (as covered by InfoBytes here) for allegedly submitting false mortgage lending information and imposed a $3.95 million civil penalty. The CFPB separately ordered another bank to pay a $12 million penalty for allegedly failing to collect accurate demographic information from mortgage applicants and reporting that applicants had chosen not to respond.
HMDA requires lenders to collect and report certain applicant data, including demographic information. If an applicant declines to provide this information in person, the lender must attempt to collect it through either visual observation or surname. Failure to comply with these requirements constitutes a violation of HMDA and Regulation C.
The CFPB has intensified its efforts to address HMDA compliance through enforcement actions and supervisory examinations. The agency emphasized its commitment to holding companies accountable for non-compliance and encourages employees who suspect violations to report them.
