Consumer Financial Protection Bureau (CFPB) chief Richard Cordray announced on Thursday that his agency had issued warning letters regarding reporting under the Home Mortgage Disclosure Act (HMDA) to 44 financial institutions.  The letters advised the companies, which included both mortgage lenders and mortgage brokers that they appear to be in violation of HMDA requirements.

CFPB identified the 44 companies through a review of available bank and nonbank mortgage data. The letter reads in part, "While we have not made a determination that [Name of Company] is in violation of HMDA filing requirements, we urge you to review your practices to ensure that you comply with all relevant laws. You may find it helpful to review the text of HMDA, Regulation C, and CFPB guidance documents available on the CFPB's website. We encourage you to advise us of the steps you have taken or will take to ensure compliance with the laws identified above or, if you believe these legal requirements do not apply to you, to provide an explanation."

HMDA was originally enacted in 1975 and requires many institutions to collect data about their housing-related lending including home purchase mortgages, refinancing, and home improvement loans which they originate or for which they receive applications and to report them to their appropriate federal regulators and make the data available to the public.  This will allow the public and regulators to determine whether the institutions are serving the housing needs of their community, identify possible discriminatory patterns and assist in the appropriate provision of public resources to attract private investment where it is needed.

The rules updating reporting requirements under HMDA were finalized by CFPB in October of last year.  Most provisions of the final rule will go into effect on January 1, 2018.

"Financial institutions that fail to report mortgage information as required make it harder to identify and address discriminatory lending," Cordray said.  "No mortgage lender that is required to report their loan data can avoid this responsibility."