2018 HMDA Prep: Examiner Guidelines for Testing HMDA Data

10/31/2017 - By Jennifer Paradise, CRCM

The Federal Financial Institutions Examination Council (FFIEC) issued HMDA Examiner Transaction Testing Guidelines for validating Home Mortgage Disclosure Act (HMDA) data collected in or after 2018. The number of files sampled and the error threshold for resubmission will vary based on the number of entries on the institution’s Loan Application Register (LAR).  Examiners will focus on 37 “Designated Key HMDA Data Fields” during transaction testing.  These fields were announced on October 17, 2017.   Information regarding all data fields (a.k.a. “FIG fields”) are detailed in the HMDA Filing Instructions Guide (FIG)

Tolerances for minor errors involving dates (up to 3 calendar days for application and action taken date) or dollar amounts (up to $1000 for loan amount and gross income) will not count toward error thresholds for resubmission.  Data fields for ethnicity and race will be grouped (i.e. if one or more of the six Ethnicity FIG fields have errors, they would count as only one error for that data field group).  Understanding the method for determining sample sizes and the resubmission thresholds is key to a successful HMDA data validation by your examiners.  

On the bright side – we’ve never had a tolerance for dates or dollar amounts!  So I suppose we should thank the regulators for giving us some breathing room.

Preparing for the 2018 HMDA changes can seem overwhelming. If you have any questions or concerns about these or other issues, email me or any member of our Financial Institutions Consulting Team.

About the Author  |  Jennifer Paradise, CRCM

Jennifer is a consultant in the Financial Institutions Advisory Group at Saltmarsh, Cleaveland & Gund and has been serving the financial institutions industry since 1990. She is primarily involved in performing fair lending, loan internal audit, loan compliance, and other consulting services for the firm's financial institution clients throughout the region. 

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