Community banks say that a warning from a civil rights group about pending legislation to overhaul the Dodd-Frank Wall Street Reform and Consumer Protection Act is much ado about nothing.
A press release issued over the weekend by the National Association for the Advancement of Colored People warned about the potential elimination of an anti-mortgage discrimination tool.
According to the organization,
section 104 of S. 2155, Economic Growth, Regulatory Relief, and Consumer Protection Act, would exempt 85 percent of banks from the reporting requirements of the Home Mortgage Disclosure Act.
“Exempting lenders from reporting the expanded HMDA requirements means that we will lose data on loan characteristics (such as interest rate, loan term, introductory rate period, and other features) and on borrower characteristics (including age, credit score, debt to income ratio),” the NAACP’s announcement said.
An amendment to S. 2155 is reportedly being offered by Sen. Catherine Cortez Mastro (D-Nevada)
that would strike section 104.
“If Senator Cortez Mastro is allowed to offer her amendment, and if it is accepted, the bill will move forward without harming HMDA,”
the statement said.
But
the NAACP is promoting a misconception, according to a statement Monday from the Independent Community Bankers of America.
The proposed law will not disrupt HMDA’s required data collection and reporting on the ethnicity, race and sex of borrowers, the ICBA said. Instead, it would actually maintain these HMDA data fields.
“Those community banks that have been required to collect and report HMDA data on covered mortgage loans will continue to do so and report on an annual basis as they did for decades until the Consumer Financial Protection Bureau dramatically expanded reporting mandates in 2015,” ICBA President and CEO Camden R. Fine said in the statement. “S. 2155 takes a common-sense approach to ensure necessary data will continue to be reported without overburdening low-volume lenders.”
The ICBA said the bill would still require lenders to report the 23 HMDA data fields in place before the CFPB’s 2015 mandates.
Low-volume community bank home lenders with satisfactory or better Community Reinvestment Act ratings would only be exempted from the 25 additional data fields mandated by the 2015 rule.
The exemptions proposed in the legislation would only apply to community banks with fewer than 500 closed-end mortgages or 500 open-ended lines of credit originated per year.
