CSBS Urges CFPB to Reduce Burden on Small Financial Institutions


WASHINGTON, D.C. – October 30, 2014 – (RealEstateRama) — The Conference of State Bank Supervisors (CSBS) submitted a comment letter Wednesday to the Consumer Financial Protection Bureau (the Bureau) concerning the Bureau’s proposed amendments to Regulation C, or the Home Mortgage Disclosure Act (HMDA).

In the letter, CSBS expresses concern that the new reporting requirements proposed by the Bureau would impose a disproportionate cost burden on community banks. To reduce this burden, CSBS asks the Bureau to consider a tiered approach to deciding which financial institutions must report HMDA data.

“The proposed attempt to create a one-size-fits-all threshold fails to take into account the relationship lending business model of small depository lenders,” said CSBS President and CEO John W. Ryan in the comment letter. “The Bureau should carefully consider whether the increased compliance burden resulting from the proposed reporting requirements could lead to a restriction of credit for consumers who are served by community banks.”

In addition, CSBS asks the Bureau to make the HMDA data collection process more transparent. To achieve this, CSBS urges the Bureau to release its model for analyzing HMDA data and encourages other federal agencies to do the same. As part of this increased transparency, CSBS also calls on the Bureau to provide more clarity on what will cause an enforcement action and provide a precise definition of what constitutes an error in HMDA reporting.

CSBS also encourages the Bureau to consider using the Nationwide Multi-State Licensing System (NMLS) when establishing identification numbers for HMDA reporters, as the NMLS system already gathers data on these institutions and provides them a unique identifier (NMLS ID). State regulators see this as a critical opportunity to relieve small banks and mortgage companies from additional cost or burden from new reporting requirements.

The full letter sent to the CFPB by CSBS is available here.
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Catherine Woody, Vice President of Media and Industry Relations, or 202.728.5733
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The Conference of State Bank Supervisors (CSBS) is the nationwide organization of banking regulators from all 50 states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands. State banking regulators supervise nearly 5,200 state?chartered financial institutions. Further, most state banking departments also regulate a variety of non-bank financial services providers, including mortgage lenders. For more than a century, CSBS has given state supervisors a national forum to coordinate supervision of their regulated entities and to develop regulatory policy. CSBS also provides training to state banking and financial regulators and represents its members before Congress and the federal financial regulatory agencies.

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