Independent Banker - January 2019 - 25

required for that period unless errors are found
to be material. One of the best resources for
HMDA data collection and reporting continues
to be the Federal Financial Institutions Examination
Council's A Guide to HMDA Reporting:
Getting It Right!
" Expect more compliance
management system
The Consumer Financial Protection Bureau
(CFPB) adopted a new safe harbor provision to
protect financial institutions that satisfy certain
conditions from liability for HMDA and Regulation
C violations for errors and omissions
in submitted data. If a financial institution
makes a good-faith effort to record all required
data fully and accurately within 30 calendar
days after the end of each calendar quarter,
and some data are nevertheless inaccurate or
incomplete, the inaccuracy or omission is not a
violation provided that the institution corrects
or completes the data prior to submitting its
annual loan application register.
" Nonetheless, we're not done with HMDA, "
cautions Barbara Boccia, senior director of
advisory services and regulatory relations at
Wolters Kluwer. " The CFPB will still need to
decide what data will be public. Acting director
Mick Mulvaney has signaled the bureau will
also revisit all of the 2015 changes in 2019. "
S.2155 included some changes to HMDA
reporting, most notably a reduction in the data
that smaller financial institutions must collect
and report. Because banks began preparations
for the expanded HMDA reporting following
the 2015 rule, many financial institutions wish
the passage of the regulatory relief legislation
mid-2018 would have come sooner.
" It will be interesting to see how banks that
do not have to implement the new data fields
will handle the change, " says Julia De France, a
director at RSM US LLP. " We'll also need to see
how the loan software vendors deal with it. They
may have to have two products, one for banks
required to collect and report all the data, and
one for banks that are not required to report all
the data and desire reduced data collection. "
De France encourages community banks to
fully evaluate the changes. How will this affect
banks to undo just part, but not all, of what was
changed for 2018? Regulatory guidance and its
timing will be key factors. Depending on the
timeliness, could the political landscape have
focus from regulators. "
-Julia De France, RSM US LLP
changed before the reforms can be effectuated?
From a change management and operational
standpoint, how many times can a community
bank change direction on its staff and keep
their confidence level and technical abilities up
to par?
De France also observes that, from a fair
lending standpoint, there could now be two
sets of industry data. How might that affect
data analysis and peer comparisons when you
don't have apples to apples anymore?
TILA threshold adjustments
The CFPB is required to annually calculate the
inflation-adjusted dollar amounts for several
provisions in Regulation Z, which implements
the Truth in Lending Act (TILA). On Aug.
27, 2018, it published a final rule amending
Regulation Z under the Credit Card Accountability
Responsibility and Disclosure Act of
2009 (CARD Act), the Home Ownership and
Equity Protection Act of 1994 (HOEPA) and
the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Dodd-Frank Act). The
adjustments are based on the annual percentage
change reflected in the Consumer Price
Index (CPI) in effect on June 1, 2018, and are
effective Jan. 1, 2019.
Quick stat
62%
of banks and
credit unions
don't anticipate
a likely reduction
in regulatory
burden, despite
the passing of
S.2155
Prepaid accounts under EFTA and TILA
As Independent Banker reported in January
2018, the rule primarily amended Regulation E,
which implements the Electronic Fund Transfer
Act (EFTA), and made a minor modification
to Regulation Z (TILA) for accounts with an
overdraft feature. While the original rule was
effective on Oct. 1, 2017, it has been extended
twice, which brings the effective date to April
1, 2019. The CFPB is finalizing modifications
to several aspects of that rule, including error
resolution and limitations on liability for prepaid
accounts where the financial institution
independentbanker.org Q 25
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Independent Banker - January 2019

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