CFPB sends notice about HMDA address errors
In recent weeks the NAFCU Compliance Team has heard from a handful of credit unions about a notice they’ve received from the Consumer Financial Protection Bureau (CFPB or Bureau) relating to the data they reported under the Home Mortgage Disclosure Act (HMDA). The notice announces that the CFPB’s “HMDA Operations team” reviewed the credit union’s HMDA Loan/Application Register (LAR) for 2020, 2021 and 2022 and concluded that the data “may contain invalid entries” in the “Street Address” field.
The notice states that the CFPB is contacting institutions whose HMDA LARs contained errors such as reporting “multiple addresses, multiple property numbers, missing street names, placeholder addresses (e.g., TBD Condo or 000 Street), information that should be listed in other fields (e.g. zip codes) or listing street intersections.” It appears that the issue here may be that some credit unions reporting the address in a manner that did not technically conform to the specific guidance provided by the CFPB for reporting this data field. Let’s review that guidance:
Section 1003.4(a)(9) requires a credit union to report the property address in the HMDA data. Notably, the FFIEC’s guide HMDA: Getting it Right! states that a credit union can report the property address as “NA” if the address is unknown, indicating that entries which were initially reported as “TBD” or with a street number of “000” most likely should have been reported as “NA.”
For properties in which the address was known, the staff commentary to section 1003.4(a)(9) provides guidance on how the address should be formatted in the LAR. Some credit unions theorized that they may have received this notice because they reported a multi-unit property (such as a duplex) as an address range (for example, “1200 – 1400 Main Street”). The staff commentary states that when the loan is secured by multiple properties or is made on a multifamily dwelling with more than one postal address, then the credit union should report “the covered loan or application in a single entry on its loan/application register and provides the information required by § 1003.4(a)(9) for one of the properties taken as security that contains a dwelling” (emphasis added). The staff commentary provides this example:
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