FFIEC Publishes HMDA Data and List of Underserved Communities
A few weeks ago, the Federal Financial Institutions Examination Council (FFIEC) announced the availability of the 2021 Home Mortgage Disclosure Act (HMDA) Data. This HMDA data, released annually, serves as a report from a variety of mortgage lenders, including credit unions, and is used to examine how well financial institutions are serving their consumers in the mortgage market. This data is used by consumer groups, regulators, and other interested parties to identify fair lending risks and other trends in mortgage lending. Users of the data can compare loans made to protected groups, such as Black and Hispanic borrowers.
One trend noted by the FFIEC involves the share of mortgage loans made to minority borrowers: “the share of closed-end home purchase loans for first lien, one- to four-family, site-built, owner-occupied properties made to Black or African American borrowers rose from 7.3 percent in 2020 to 7.9 percent in 2021, the share made to Hispanic-White borrowers increased slightly from 9.1 percent to 9.2 percent, and those made to Asian borrowers increased from 5.5 percent to 7.1 percent.” The FFIEC notes this increased in loans to minorities in 2021, which may be a reflection of the market’s dedication to increasing loans to protected borrowers.
Another trend noted in the press release involves the increase in market activity by non-traditional lenders: “The share of mortgages originated by non-depository, independent mortgage companies has increased and, in 2021, accounted for 63.9 percent of first lien, one- to four-family, site-built, owner-occupied home-purchase loans, up from 60.7 percent in 2020.” This trend shows that mortgage companies, including mortgage FinTechs, have been much more active recently, as consumers do not always rely on traditional institutions, like credit unions. Fortunately, credit unions continue to partner with FinTechs and other local mortgage companies to help ensure access and stability for borrowers.
Additional resources have been updated to allow credit unions and other financial institutions to review and analyze this new HMDA data. These include:
- The HMDA Dynamic National Loan-Level Dataset – contains 2021 HMDA data and updated weekly to account for resubmissions
- Aggregate and Disclosure Reports – includes data for individual financial institutions
- The HMDA Data Browser - creates custom tables and datasets
- Loan/Application Registers for each HMDA filer of 2021 data, modified to protect borrower privacy
The FFIEC also published an updated list of distressed and underserved nonmetropolitan communities. These are geographic areas which are eligible for Community Reinvestment Act (CRA) consideration. Although the CRA does not apply to credit unions, often these areas may be deemed to be “underserved” or “investment” areas under NCUA’s rules and may be eligible for certain credit union activity. For example, some credit unions are eligible to add underserved areas to their field of membership in an effort to serve those populations. A credit union looking to serve any of these communities may need to check with their NCUA Regional office to determine its options. The full list of underserved areas can be found on the FFIEC website, along with previous years’ lists, and an explanation of the criteria used for designating these areas.
