May 16, 2014

NAFCU raises privacy, transparency concerns for mortgage database

May 19, 2014 – NAFCU Regulatory Affairs Counsel Angela Meyster wrote the Federal Housing Finance Agency about its request for comment on revising the National Mortgage Database Project, raising concerns about the level of transparency regarding how the agency will use this information, and how the agency will protect credit unions' privacy.

The FHFA is working with CFPB to collect information for the database, which aims to be the first comprehensive collection of detailed mortgage loan-level information. Meyster noted that more transparency is needed about what divisions of both agencies have access to the information being collected, and what it is being used for.

"NAFCU urges the FHFA and CFPB to select only robust and representative subsets of the data when they seek to use it to support particular policies or rulemakings," Meyster wrote. "Further, the agencies should incorporate into any analyses the important differences between the types of entities involved in the mortgage and housing markets. For example, credit unions have specific field of membership requirements that may influence the geographic and demographic makeup of their consumers."

Meyster also raised concerns about how the database might violate credit unions' privacy:

"While the agencies have said the database will not contain personally identifiable information and that precautions will be taken to ensure that individual consumers cannot be identified through the database or through any datasets that may be made available to researchers or the public, NAFCU remains concerned that potential breaches may occur and that raw data attributable to particular financial institutions may be leaked," she wrote. "The agencies should ensure they have in place advanced and adequately tested cybersecurity systems before including potentially sensitive and identifiable information."

NAFCU has a collection of resources about CFPB mortgage rules compliance on its website, including information about final rules, blog posts, articles and webcasts.