When the Consumer Financial Protection Bureau issued its long-awaited final Home Mortgage Disclosure Act rule last week the amount of data readily available to the agency was greatly expanded. This isn’t heralded by the mortgage industry, however. Combined with the disparate impact theory, recently recognized by the U.S. Supreme Court under the Fair Housing Act, the HMDA rule further compounds legal risks and business challenges to lenders. The CFPB’s 797-page rule takes effect on Jan. 1, 2018, when lenders will begin collecting information, the first wave of which will be reported by Mar. 1, 2019. The influx of available data means the CFPB will be armed with all of the necessary information to run a regression analysis taking into account overlays and the criteria necessary to review overall lending patterns as well as match pairs.
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Ari Karen is an experienced litigator and speaker who has focused his practice in representing financial institutions in both government investigations and litigation before state and federal trial and appellate courts nationwide. Mr. Karen’s practice is diverse, representing clients on matters concerning banking regulations, Dodd Frank financial reform laws, contractual disputes, employment and labor statutes, wage-hour class actions, employment discrimination and fair lending matters, whistleblower complaints and non-competition claims, among others.
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