WASHINGTON–The reporting exemptions on Home Mortgage Disclosure Act (HMDA) data for smaller financial institutions has had little effect on data availability, but additional information from lenders would help improve oversight, according to a new report from the Governmental Accountability Office (GAO).
The GAO report notes that banks and credit unions that do only limited mortgage lending are exempt from reporting HMDA data, including credit scores, debt-to-income ratios and more as the result of the Home Mortgage Disclosure Act (HMDA) in 2018.
“Although these exemptions minimally affected data availability, regulators still need to verify whether lenders are eligible to use them,” the GAO report states.
Additional Findings
GAO said it found 3% of the new HMDA data were not reported as a result of partial exemptions, for the 2018 and 2019 HMDA data reviewed. At the local level, the report states the vast majority of census tracts, at least 91% of data GAO reviewed, were available in 2019.
“Partial exemptions did not disproportionately affect the availability of HMDA data GAO reviewed for borrowers of any race, ethnicity, or income level,” the report notes.
But the data comes with a caveat, with GAO explaining regulators were unable to verify some lenders’ eligibility for partial exemptions because not all HMDA reporting included data on whether each loan is an open-end line of credit.
“This data point is one of the new data points required since 2018, and lenders with exemptions are not required to provide it,” the report states. “Without it, however, it is difficult for regulators to determine if the lender is below the loan volume level required for partial exemption eligibility.”
How Congress Could Help
According to GAO, the HMDA data lenders with partial exemptions need not report are set in statute, but if Congress were to make reporting of open-end lines of credit mandatory for all HMDA reporters, including those with partial exemption, regulators could more readily confirm lenders’ eligibility for partial exemption.
The GAO report did note the Consumer Financial Protection Bureau has other data that can be useful in determining lenders’ eligibility, such as type of lender.
“CFPB does not plan to analyze these data for the other regulators, stating that they have access to the data through other sources,” the GAO report reads. “However, it would be more efficient—and reduce duplication of effort among regulators—for CFPB to synthesize and share data with regulators to assist them in assessing lenders’ partial exemption compliance.”
The full report can be found here: