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NAFCU's Regulatory Compliance Counsel Reginald Watson gives an overview of the NCUA's Home Mortgage Disclosure Act (HMDA) review observations in a new post on the Compliance Blog. The NCUA gave an update of its 2019 examination activities during the Federal Reserve's 2019 Fair Lending Interagency Webinar.

Earlier this year, the NCUA included consumer compliance in its primary areas of supervisory focus for 2019, indicating that the agency would continue to perform reviews for HMDA compliance. In the blog, Watson notes that the agency "appears to have followed its 2019 supervisory priorities by reviewing for good faith efforts to comply with the new HMDA reporting requirements."

"It is our understanding that NCUA will conduct more expansive fair lending reviews in 2020, in part because collection of the new data points enables the agency to conduct greater analysis of possibly discriminatory lending patterns since it’s now possible to control for more variables," writes Watson.

Watson details a number of issues that the NCUA identified, including:

• failure to report originations;
• reporting preapproval requests;
•  withdrawn applications; and
•  reporting inconsistencies.

Watson also highlights that the agency attributes HMDA reporting errors to "weaknesses in a credit union's compliance management system."

"NCUA further interprets a failure to understand when and how to report covered applications as a reflection of poor oversight and recommends additional training, monitoring of the collection process and corrective action to address deficiencies," adds Watson.

Later this month, the NCUA will host another webinar on a variety of consumer protection topics, including further findings from reviews of HMDA loan and application registers. Additionally, the CFPB is currently working to lessen the law's reporting burden while still addressing discriminatory lending.

Learn more about the NCUA's HMDA observations and helpful resources for credit union compliance in Watson's blog. NAFCU's Compliance Team publishes a new blog every Monday, Wednesday, and Friday on key regulatory issues affecting credit unions. Sign up to receive new Compliance Blog posts.