CFPB updates ethnicity, race data collection rules for mortgagors

by Francis Monfort22 Sep 2017
Mortgage lenders will see more flexibility in the collection of ethnicity and race information from consumers following a modification of Equal Credit Opportunity Act (ECOA) regulations by the Consumer Financial Protection Bureau.

The agency announced the changes along with a call for inputs on how to publicly disclose Home Mortgage Disclosure Act (HMDA) data.

The CFPB regulation implementing the ECOA included limitations on lenders’ ability to ask consumers about their race, color, religion, national origin, or sex, except in certain circumstances. Under the modifications, lenders will not be required to maintain different practices depending on loan volume and other factors. They will now be allowed to use applications forms with expanded requests for ethnicity and race information.

According to the CFPB, the update provides individual lenders compliance flexibility while at the same time supporting consistency in forms and compliance practices throughout the broader industry.

Additionally, the CFPB called for inputs to a proposed policy guidance regarding the public disclosure of HMDA data that the agency is planning to make available beginning 2019. Under the CFPB’s regulations implementing HMDA, financial institutions will start collecting and reporting in 2018 consumer information including property values, loan interest rates, and applicant debt-to-income ratios.

Under the proposed guidance, the CFPB has described the loan-level data that it proposed to make available beginning. As it plans to disclose a bulk of the data, the agency said it proposes modifications to the information to protect consumer privacy. These modifications included exclusion of certain data fields from public disclosure, such as property address and applicant credit score, as well as reducing the precision of certain information such as using an age range instead of a specific number.

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