HMDA data is a key focus of fair lending analysis.
While many institutions analyze HMDA for fair lending performance throughout the year, there are others who wait until year end or even until after submission of annual data by March 1st. The delay in analysis until after March 1 worked to some extent because data was not released publicly until September of each year. Of course, any ability to address shortcomings mid-year is lost by waiting until year end.
This will all change with the new fully automated HMDA submission process beginning with the 2017 submission in early 2018. The current plan is for the CFPB to publish the public HMDA data quickly, possibly as early as 30 days after submission. This will be possible because all edits will be managed online and there is only one submission method, a fully automated paperless process.
HMDA data will be in the hands not only of institutions and examiners within 30 days of submission, but also will be available to community groups and software vendors who download that data into programs that provide instant fair lending analysis.
What does this mean to HMDA reporting institutions? It means that it is more important than ever to be always on top of your HMDA data and the fair lending story it tells. If you analyze data at year end, give serious consideration to analyzing throughout the year, uncovering any shortcomings and making needed changes to improve results or at least understand reasons for performance.
Don’t wait and undertake a last minute mad scramble to review the data submitted to prepare explanations of potential disparities such as different outcomes of similar applicants, pricing differences, and geographic penetration shortcomings. All data, other than any held back from the public files, will be published for the world to see in early second quarter.
This new publication schedule will likely begin with the 2017 data submitted in early 2018, the first year under the new automated process. We do not know at this point if there will be any grace period for 2017 data, given it will be the first year with the new process.
The 2018 data submitted in early 2019 will, of course, contain greatly expanded HMDA data, making early analysis even more important.
Contact us if you have any questions on this or other HMDA issues.
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