SAN FRANCISCO -
But Patelco Credit Union, which found out the hard way the kind of complications that can arise, has found a way to automate a major portion of the compliance reporting procedure, saving time and money.
The Home Mortgage Disclosure Act (HMDA) was enacted by Congress in 1975 and is implemented by the Federal Reserve Board's Regulation C. As part of Regulation C, HMDA requires lenders to provide annual reports to the public regarding the types of applications, and the actions taken on those applications.
The $4.2-billion Patelco CU underwrites thousands of mortgages for its members each year. Prior to implementing software to automate HMDA submissions, Patelco compiled and filed its annual HMDA report by hand. Just how big a drawback the manual filing could be was made all too clear in 2005, when a change in required HMDA formatting caused more than 5,000 of Patelco's submissions to be rejected.
Mat Stanfield, senior lending systems analyst at Patelco, told the Credit Union Journal the errors were a surprise, as Patelco had not been informed of the formatting changes. Shortly after, management began looking for software to better handle HMDA submissions, and approached Laguna Hills, Calif.-based QuestSoft, which had a "phenomenal" product at a reasonable price, according to Stanfield.
Patelco implemented QuestSoft's "HMDA Relief" in June 2006. Stanfield said it automates "as much of the process as can be automated. It takes a very manual process and allows us to automate it to the fullest extent."
For its 2006 HDMA submission, Patelco used QuestSoft's program to scan all loan records for potential errors, allowing one person to make batch edits and analyze the data to ensure complete compliance. A full-time HMDA staff person was reassigned to other duties, and Stanfield completed the filing himself thanks to the efficiencies gained.
"With a few clicks of the mouse, I can import all of our mortgage data from our loan origination system into the program," said Stanfield. "It handles all of the geocoding automatically, presents me with possible errors, and when completed, I can submit directly to the regulators."
Patelco has not yet calculated an exact ROI for the new software and procedure, but Stanfield said shifting a person who spent the majority of his time on HMDA compliance to managing other duties is an obvious benefit. Other cost savings were realized by reduced staff time on every loan filed, he said. "We don't have a person doing manual entries and double-checking prior to submission."
Implementation of the HDMA relief solution took less than 30 days. Stanfield said training was straightforward as the software is "very intuitive and wizard-driven." He said the cost to Patelco is $4,000 per year, including software and geocoding, plus customer service.
FOR MORE INFORMATION
www.patelco.org
www.questsoft.com
