Warren Traiger Interviewed in the Scotsman Guide Article, "Revamped HMDA is a Game Changer"
August 30, 2016
Warren Traiger was interviewed in Victor Whitman's Scotsman Guide article, "Revamped HMDA is a Game Changer," on August 30, 2016.
The Consumer Financial Protection Bureau (CFPB) published a final rule last year that greatly expanded the loan data that lenders will have to gather and report to the government beginning in January 2018 to comply with the Home Mortgage Disclosure Act (HMDA). Warren Traiger, a senior counsel in the Manhattan office of the law firm BuckleySandler, spoke with Scotsman Guide News about why this will be a game changer for fair-lending enforcement, and why lenders should prepare for the rule now.
Could you explain what the Home Mortgage Disclosure Act is and why it was enacted?
It was originally enacted back in the mid-1970s, and it was part of an effort to confront redlining, that is, the failure of mortgage lenders to make loans in certain communities, usually inner city minority communities. The idea was that if certain types of reporting were required from lenders, that the government would better be able to monitor where loans were being originated and where there might be indications of redlining. Since that time, there have been significant changes to the law, requiring the reporting of more information application by application, and the public disclosure of that information. So it has become the primary fair-lending tool in the mortgage-lending context.
Why has the CFPB expanded the data collection requirements recently?
One of the provisions of the Dodd-Frank [Wall Street Reform and Consumer Protection] Act created the Consumer Financial Protection Bureau, and transferred various authorities to it, including administering the HMDA rule, which was previously administered by the Federal Reserve. Congress directed the bureau to revise the regulation enforcing HMDA, and actually mandated that there be certain new fields of data collected, and gave the bureau the authority even to go beyond the required fields with an eye toward what is most useful to enforce our fair-lending laws, and to help make sure that lenders are in compliance.