CFPB reveals what new HMDA data will, and won't, be made public

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The Consumer Financial Protection Bureau plans to modify or exclude from public disclosure one-third of the Home Mortgage Disclosure Act data that originators will begin reporting on their lending activity in 2018.

The CFPB proposal would exclude or modify loan-level data like property addresses and credit scores from being publicly disclosed to protect consumers' privacy, the agency said Wednesday. It's also proposing to exclude data that it says could be used, along with other public data, to reidentify consumers, such as the loan officer identification numbers issued by the Nationwide Multistate Licensing System.

Mortgage lenders long have been concerned that personal data, if disclosed publicly, could be used to identify individuals. Financial institutions are also concerned that advocacy groups and media outlets would use the publicly disclosed data to home in on differences in mortgage approval rates to allege discrimination against banks and mortgage lenders.

There are 11 HMDA data points that will be excluded entirely or obscured to reduce the likelihood of being used to identify a consumer. For example, the new property value field will appear as "the midpoint for the $10,000 interval into which the reported loan amount falls," the agency said, adding "for a reported loan amount of $117,834, the Bureau would disclose $115,000 as the midpoint between values equal to $110,000 and less than $120,000."

For another five data points, the CFPB will exclude content provided in free-form text fields, such as race, ethnicity and the name and version of the credit scoring model used to generate a credit score or make a credit decision. The new HMDA data set includes 48 total data points, including 25 new and 12 modified fields.

Despite the exclusions, the CFPB said its HMDA proposal will "make the bulk of this information public." The bureau is seeking public comment on the proposal.

"The Home Mortgage Disclosure Act helps shine a light on how consumers are treated in the nation's largest consumer financial market," CFPB Director Richard Cordray said in a press release. "The Consumer Bureau is committed to promoting fair lending and protecting consumer privacy, and will continue working to ensure that the rules work as intended."

The CFPB also has proposed assigning age ranges to applicants, such as from 25 to 34, or 35 to 44, on up. Loan-to-value ratios and total monthly debt-to-income ratios also will be reported by a range, such as greater than or equal to 40% and less than 50%.

The CFPB also finalized a proposal from March that eliminates inconsistencies between HMDA and the Equal Credit Opportunity Act, allowing lenders to use consistent forms with expanded requests for information on a consumer's ethnicity and race.

Regulators routinely mine HMDA data to identify possible discriminatory lending patterns and to monitor whether financial institutions are lending in certain communities.

The CFPB finalized a rule in October 2015 that requires lenders collect more information from mortgage applicants to satisfy tougher mortgage-reporting requirements. Financial institutions will begin collecting in January 2018 the expanded HMDA data including the property value, the interest rate on a loan and an applicant's debt-to-income ratio. To protect consumers' privacy, the CFPB has proposed excluding some data fields and only giving a range for others, such as a mortgage applicant's age.

The public comment period will be open for 60 days after the proposal is published soon in the Federal Register, the CFPB said.

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