CFPB Files Complaint Against Mortgage Originator For Allegedly Inaccurate HMDA Reporting

On October 10, 2023, the Consumer Financial Protection Bureau (CFPB) announced that it filed a complaint​ against a residential mortgage loan originator and servicer alleging that the company violated the Home Mortgage Disclosure Act (HMDA), its implementing Regulation C, the Consumer Financial Protection Act (CFPA), and a recent 2019 consent order​. The company allegedly reported HMDA data in 2020 that contained widespread errors throughout the legally-required submission, prompting the CFPB to file a lawsuit in the Southern District of Florida seeking civil penalties and injunctive relief.

The 2019 consent order alleged that the mortgage company intentionally submitted mortgage-loan data for 2014 through 2017 that misreported certain HMDA data fields, such as applicants’ race, ethnicity, and/or sex. The settlement that accompanied the 2019 consent order required the company to pay a civil money penalty of $1.75 million and improve its compliance management to prevent future violations. Despite the settlement and consent order, the CFPB alleges that in 2020, the mortgage company “collected, recorded, and reported inaccurate HMDA data” and “did not maintain procedures reasonably adapted to avoid errors in its 2020 HMDA data submission.” Upon bringing this suit, CFPB director Rohit Chopra commented “[t]he CFPB will continue to focus on ending the cycle of misconduct by repeat offenders in the financial industry.”

The CFPB seeks to permanently enjoin the company from violating the above regulations, require the company to take affirmative steps to prevent any recurrence of such violations, and to impose civil money penalties against the company.