WASHINGTON — The Consumer Financial Protection Bureau sent letters Thursday to 44 mortgage lenders warning them of potential reporting violations related to their mortgage lending activities — infractions the bureau is increasingly pushing lenders to take seriously.
The agency did not name the firms, but published a sample letter that detailed the accusations against them. In the letter, the CFPB noted that the Home Mortgage Disclosure Act, as amended by the Dodd-Frank Act, requires certain mortgage lenders to collect and submit information about their lending activity to federal regulators. Failure to do so makes it more challenging for watchdogs like the CFPB to detect fair lending violations and other illegal activity, said CFPB Director Richard Cordray.
"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."
Financial institutions are subject to the reporting requirement if they have engaged in more than $25 million in home mortgage loans in the preceding year, or if the lender's mortgage origination activity amounted to more than 10% of the firm's total lending activity.
A lender is also subject to the reporting rule if it has an office or branch in a census-designated Metropolitan Statistical Area , has more than $10 million in assets and has originated or refinanced more than 100 home loans in the preceding year.
Recipients of the letter were advised to either contact the CFPB with additional information on the firm's compliance with HMDA or an explanation as to why compliance was not required. No deadline for a response was indicated. CFPB did not immediately respond to a request for additional details on recipients.
The CFPB's letter comes as the agency has sought industry comment on how particular it needs to be about HMDA submissions. The agency last year finalized a new rule adding 25 new data points to HMDA submissions and modifying another 14 — vastly expanding the breadth of data required from lenders. Though those submissions are not set to go into effect until 2018, the letter suggests that the agency is already concerned that some lenders subject to HMDA reporting rules may not be preparing themselves.