Master HMDA Compliance with this Underutilized Resource
Written by: Bill Dolan, CMB, AMP
Over the years, we’ve had many conversations with our community bank and credit union clients, and it’s clear that you recognize your vital role in ensuring equitable access to credit in your communities. As you continue navigating the Home Mortgage Disclosure Act (HMDA) complexities, we want to draw your attention to a powerful yet often underutilized resource that can significantly bolster your compliance efforts: The Interagency HMDA Examination Procedures.
Two Primary Advantages of Leveraging Interagency HMDA Examination Procedures
There are two primary advantages of leveraging interagency HMDA examination procedures. First, they guide your efforts to ensure the accuracy, completeness, and timeliness of your institution's HMDA Loan Application Register (LAR). Second, they provide clear direction for evaluating your institution's compliance with HMDA disclosure requirements. By incorporating these procedures into your compliance program, you can proactively identify and address discrepancies within your institution's HMDA data and HMDA processes, ultimately fostering transparency and fairness in your lending practices.
Conduct a HMDA CMS Self-Assessment
An important component of the examination process involves a thorough review of your institution's HMDA-related Compliance Management System (CMS). Since HMDA data serves multiple purposes, a robust CMS is critical in ensuring success. The strength of your CMS program is assessed based on its alignment with your institution's lending activity, size, structure, complexity, and risk profile. Board and management oversight also plays an essential role in HMDA compliance. From the designation of individuals responsible for HMDA oversight to adequately trained staff and accessible procedures, controls, and resources, a comprehensive approach to administration ensures that HMDA compliance efforts remain effective and adaptive.
Proactively Set the Set the Tone for Your Next HMDA Exam
One of the unique aspects of HMDA examinations is that the initial data integrity review begins 30-60 days before the on-site exams. This critical, stand-alone component of the HMDA examination often sets the tone for the entire exam. A positive initial data review that reveals strong data integrity reinforces the institution's commitment to its regulatory responsibilities. Conversely, when the initial review reveals data integrity issues, it can open the door to an expanded exam scope and/or required data scrubs and resubmissions.
SCA will partner with you to elevate your institution's HMDA compliance strategy. Our consultants bring a wealth of HMDA and regulatory expertise, ensuring your approach to compliance seamlessly aligns with interagency examination protocols. With SCA, you get compliance support and a partner who will tailor solutions to your unique makeup, turning HMDA compliance into a strategic advantage.
If you would like to know more about how SCA can help you prepare for your next HMDA examination, reach out to our Director, Bill Dolan, via email (WDolan@scapartnering.com) or by phone (617-694-2617).
