WASHINGTON—Credit unions support the mission of the Home Mortgage Disclosure Act (HMDA) mortgage reporting requirements, although the rule has disproportionately burdened credit unions despite no evidence of past wrongful conduct, according to a letter sent by CUNA to the CFPB.
“The current regulatory environment favors the largest banks and non-bank mortgage lenders. These large entities can afford to absorb the significant regulatory and compliance costs from the thousands of pages of new rules and regulations,” the letter reads. “It has made it significantly more difficult for credit unions to provide the affordable financial services credit union members depend on and deserve. It is increasingly difficult for credit unions to effectively participate in the mortgage lending market when they are forced to comply with rules not tailored to their size or structure.
Recommendations Offered
CUNA discouraged the CFPB from making further changes to the thresholds in the short-term and encouraged the Bureau to instead
- Carefully consider the enforcement and research value of the data which would be reported, and whether the associated costs and compliance burdens to small financial institutions are justified
- Consider the small size of the racial, ethnic, and sex data based on visual observation and surname and how it has made use of the substituted data in the past. CUNA believes this data is not sufficiently material to outweigh the significant problems for both lenders and applicants
- Evaluate the true cost related to regulatory changes, especially for small lenders
- Make a concentrated effort to ensure regulatory requirements do not push these community lenders out of the home equity line of credit market