Wow! Can you believe it's already the week before Christmas? Many of you may be scurrying around looking for those last minute gifts or still trying to decide what to buy that one person on your list who already has everything. Ugh... there's always one, right? Since we're talking about giving gifts, this week's newsletter may be a bit of a gift... maybe even a SURPRISE gift for some of you. This week I'm going to discuss the CFPB's Loan/Application Register (LAR) Formatting Tool. I'll tell you what it is, where to find it (yes, it IS already out there!) and how to complete it. For some of you, this may not be much of a gift as you may already be using third party provided software to house and extract your 2017 HMDA data or your LOS systems may be capable of housing and extracting your 2017 data into the required pipe delimited text file format. If that's the case, skip ahead to the bottom and read my "Update on Implementation Delay" as this may very well be a gift that everyone receives for this holiday. For those of you who are not so fortunate or who were not even aware that this tool was already available, HAPPY HOLIDAYS!!!
Present #1 - What is the Loan/Application Register (LAR) Formatting Tool?
The LAR Formatting Tool is a tool intended to help institutions create an electronic file that can be submitted to the HMDA Platform if they have no other option available (vendor software or LOS option). It is meant to be used by those institutions with small volumes of covered loans and applications; however, it can be used by larger volume reporters if no other option is available. The LAR Formatting Tool is basically an Excel spreadsheet with two rows of data information to be entered. The first row is information about the financial institution such as the Respondent ID#, Parent Name and Address and contact information for someone at the financial institution who has knowledge of the information being submitted. The second row contains the 33 data fields for the information reported under the current rules. You will use this worksheet to enter your 2017 data, using one row per loan. Once all data has been entered, you will save and export the file into the pipe delimited text format document ready to upload to the CFPB's HMDA Platform.
Present #2 - Where is the LAR Formatting Tool?
The LAR Formatting Tool is found on the CFPB's Resources for HMDA Filers website, which is located here. When you get to this website, scroll down until you see "Loan/Application Register (LAR) Formatting Tool" and then click on LAR Formatting Tool. On the next screen, you will see "Download the HMDA 2017 LAR Formatting Tool" and you will click this and choose "Open." After the worksheet opens, click on the "Data" tab at the bottom and you'll be ready to start loading data.
Present #3 - How Do We Complete the LAR Formatting Tool?
Present #1 contained a bit of an intro for how you're going to complete the LAR Formatting Tool, but let's get down to specifics. Once you open the worksheet and click on the "Data" tab, you're ready to start inputting your data. This will work just like any other Excel worksheet; you will move from column to column, cell to cell, entering the correct information for each data field. Each data field is formatted with the options you may choose from in reporting the information. For example, in the Property Type data field/cell, you will see "Property Type" and the options "1 - One to four family (other than manufactured housing; 2 - Manufactured housing; 3 - Multifamily" and you must pick one of these three choices. The principal is still the same as the FFIEC software... it's just in an Excel spreadsheet format now. You will complete the full row for each reportable loan. So, if you have 50 reportable loans, you'll have 55 rows, because actual inputting starts on the fifth row. Once you finish inputting all of your loan data, you click on "Create LAR File" in the top left cell (A1) and save it to your computer in an easily accessed (and remembered) location. It automatically saves the file as a "text file" which is THE format a file must be in before it will upload to the HMDA Platform. You now have your data file ready to be uploaded!
I have given you three presents by telling you what the CFPB Loan/Application Register (LAR) Formatting Tool is, where to find it, and how to complete it. Here is one last "goody" for you. If you hurry and get your loans input now, you can create your account and upload the file to the CFPB's Beta HMDA Platform for testing by visiting their website. This will allow you to make sure there are no glitches in your data related to the way you have entered it and you can check for any other errors (remember those validity and syntactical errors?). You don't want to wait until you're ready to submit the "real" file to find out there's a problem with the data. But the testing period ends on December 31 so if you have not created the delimited text file, you better gather your own set of elves and get to work! Any data entered between now and midnight on December 31 will be removed from the CFPB's system when the filing period for HMDA data collected in 2017 opens on January 1st, 2018.
Update on Implementation Delay
I wanted to give you all a quick update on what I'm hearing on about any possible delays in implementation. The clock is still ticking and with the upcoming holidays, if we are going to get the BEST holiday present (a delayed implementation date) it has to happen soon. On December 14, Representative Tom Emmer introduced a bill that would delay the effective date for data collection until Jan. 1, 2019, and the reporting deadline until Jan. 1, 2020. It would also prohibit the CFPB from publicly publishing any information collected under HMDA except in an aggregate form. This bill has support from a LOT of bigger names, like the ABA and CUNA, so it is possible... and chances are by the time this gets published, we may have already heard news of a delay. Here's hoping we all get a holiday miracle!
In wrapping this up, I would like to speak on behalf of the entire Temenos Compliance Advisory Team and wish you all a very happy and blessed holiday season.