Based on the President’s executive order 13772 on The Core Principles for Regulating the United States Financial System, the American Bankers Association (ABA) submitted a white paper to Treasury Secretary Mnuchin that criticizes the revised Home Mortgage Disclosure Act (HMDA) rule adopted by the CFPB.

The executive order requires the Treasury Secretary, based on the core principles laid out in the executive order,  to identify the federal laws that promote and inhibit the regulation of the United States financial system.  In the white paper, the ABA “offers these views” to the Treasury Secretary in relation to the executive order’s directive:

• Expanded data collection adds nothing but volumes of irrelevant data, distracting from achievement of HMDA’s purposes.
• Regulators have failed to protect expanded HMDA data from breaches of security and privacy.
• Expanded data collection will feed banker regulatory worries about meeting customer needs outside of the norm.
• Data expansion should be suspended until security and privacy concerns are fully addressed.
• Bureau regulatory expansion of data beyond the statute should be rescinded.
• Dodd-Frank expansion of HMDA data fields should be repealed.

The comment regarding security and privacy addresses industry concerns that (1) the greatly expanded nonpublic personal information on consumers presents data security risks and (2) the public release of various new HMDA data elements will result in nonpublic personal information on consumers becoming readily available to the public.  As we have reported previously, the CFPB has provided little insight into its decision making on what data will be released, and does not appear to be too concerned with data security or privacy issues.  The ABA notes that it is “concerned that the Bureau has not initiated a public rulemaking to address the significant consumer privacy dangers and data protection threats that the expanded HMDA data collection poses.”  The ABA concerns are based on the “probability that manipulation of the expanded data points will make it easier for unfriendly parties to unmask identities of borrowers and their personal financial profiles, and the wholesale risks common to an age where harmful data breaches of government-held information are real, frequent, and therefore must be anticipated.”

We share the ABA’s concerns that the expanded HMDA data categories presents, both with regard to the risk of unauthorized access to the data, and the public release of various data elements by the CFPB.