Wolters Kluwer Financial Services Offers Four Tips Regarding New HMDA Rules
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  • Wolters Kluwer Financial Services Offers Four Tips Regarding New HMDA Rules

    Oct. 16, 2015

    Advance preparation will be critical, given law’s expanded scope

    With the finalization of new Home Mortgage Disclosure Act data collection rules, Wolters Kluwer Financial Services today issued its HMDA Readiness Project Plan tool to help lenders prepare for the enormity of change that the new rules entail. The Consumer Financial Protection Bureau released final rules that mandate the collection of a significant number of new and changed data fields.

    According to the company’s regulatory compliance experts, the extent and breadth of the required new fields will have considerable ramifications for financial institutions.

    “Collecting, analyzing and reporting the additional data fields now required under the law will bring significant technology, operational, staffing, and regulatory change management challenges for lenders,” said Timothy R. Burniston, executive vice president, Wolters Kluwer Financial Services. “Our first order of business will be to work closely with lenders to help them understand the scope of these changes and possible implications for their businesses, as well as to guide them on meaningful steps they can proactively take to prepare for the required changes and to improve their analysis of mortgage lending data.”

    While the new rules are effective January 1, 2018—with reporting of the newly finalized 2018 data fields by March 1, 2019—the company encourages lenders to initiate enterprise planning and readiness efforts early to best position them for complying with the new regulation requirements, including:

    1. Identify all lines of business that will be impacted by the HMDA changes. Develop a working group of affected business lines and departments—including  mortgage lending, information technology, and compliance—to determine how best to organize, coordinate and align these groups’ activities.
    2. Develop an implementation plan. Assign roles and accountabilities within the working group to ensure that individuals responsible for implementation are connected and developing a plan of action.
    3. Identify and prepare for any needed staff training and technology investments. Determine the enterprise methodology and approach. Begin to source and plan for the new HMDA changes. Outline the timeline and cost of the changes. 
    4. Strengthen and bolster the organization’s analytical capabilities. In addition to collecting and submitting quality data, lenders need to know what the implications of the data are for their institution. Analytics will be key to finding indications of potential disparate treatment or impact of protected classes, and an essential step in being able to conduct root cause analyses to determine the extent of problems—and providing a pathway for addressing them.

    Wolters Kluwer Financial Services recommends that organizations use the HMDA Readiness Project Plan tool to help aid their initial organizational assessments and planning.

    “Meeting the new HMDA requirements will be facilitated more readily for those organizations that have a strong compliance foundation in place,” said Burniston. “Given that the transition time for managing a regulatory change of this magnitude can never really be sufficient, lenders should take the long view and manage the time available to position their organization for a successful transition.”

    A copy of the HMDA Readiness Project Plan is available at www.wolterskluwerfs.com/HMDA

    About Wolters Kluwer Financial Services

    Wolters Kluwer Financial Services provides customers worldwide with risk management, compliance, finance and audit solutions that help them successfully navigate regulatory complexity, optimize risk and financial performance, and manage data to support critical decisions. With more than 30 offices in 20 countries, our prominent  brands include: AppOne®, AuthenticWeb™, Bankers Systems®, Capital Changes, CASH Suite™, GainsKeeper®, NILS®, OneSumX®, TeamMate®, Uniform Forms™, VMP® Mortgage Solutions and Wiz®. Wolters Kluwer Financial Services is part of Wolters Kluwer, which had 2014 annual revenues of €3.7 billion ($4.9 billion), employs 19,000 employees worldwide, and maintains operations in over 170 countries across Europe, North America, Asia Pacific, and Latin America. Wolters Kluwer is headquartered in Alphen aan den Rijn, the Netherlands. Its shares are quoted on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices.