What effect will the new HMDA rule have on commercial lenders?
In this industry we all attend seminars and conferences. We all stay in contact with each other. And we all love to gossip about how badly new regulations are going to affect us. Well one story line with the upcoming CFPB reboot of HMDA has been how dramatically it will affect the commercial loans.
The answer is that the new HMDA rule is not going to affect commercial lending as much as we originally thought.
Let's discuss.
Sure enough, the original CFPB HMDA proposal would have had a dramatic effect on commercial lending. The proposed rule would have made all loans secured by a dwelling reportable, regardless of whether they were consumer or commercial. This would have been a huge change for commercial lenders, drastically increasing the number of reportable transactions in some institutions (especially big SBA lenders). Every commercial deal that happened to be secured by a dwelling (no matter the purpose of the funds) would have been subject to HMDA.
But that's not how the cookie crumbled. The CFPB cited written comments submitted by industry advocates when concluding that the benefits of increasing the scope to include all commercial loans would not outweigh the costs. Who says they don't listen! So the CFPB sided with the lending industry on this issue (although expressly noting that they have the power to change their minds with a later rule if deemed appropriate).
What's the rule going to be now? Under the new HMDA rule, commercial loans will be subject to the new HMDA requirements only if they are for the purpose of a home purchase, home improvement, or refinancing. That's not so bad!
P.S. Much more to come on the HMDA Rule. Plenty of time for us to discuss things I'm glossing over here, such as how under the new definition we will have to report mortgage loans and secured lines of credit. (But not unsecured lines no matter what they're using it for).
In Other News:
Have you seen the "Ask CFPB" website feature? Promised to be "a source of clear, impartial answers to hundreds of financial questions."
Credit availability down last month, according to the MBA, with the biggest hits coming to the jumbo market.
Looking for a recent case study on red-lining? Look no further than the $2.8 million settlement between HUD and First Federal Bank of Kansas. Read the story on HousingWire.
Anonymous ...
[Finally gets the car seat installed correctly]
Me: Where's the baby?
Wife: In college.
Do a lot of public speaking? Many claim that taking an acting class can help improve public speaking skills. But why is that exactly? Here's an interesting take from Forbes on this. It lists several reasons. One that made sense to me is that an actor trains to know his/her audience:
Know all the characters before you ever step onto the stage. In a play or film, each actor knows every character. His character doesn't necessarily know all the other characters, but the actor playing that character does. He has studied the play. He knows who he is dealing with and what to expect from them.
This can be a useful idea for you as speaker. Granted, not as many variables are invariable for the speaker as for the actor. For one thing, he isn't assured a certain ending. But there is much he can do to achieve his desired outcome by getting to know the other players before he steps onto the stage. Who are they - your audience and those who hired you? Why did they ask you to speak? What do they hope to get out of your presentation? What do they hope to do with it?
Knowing the answers to these questions enables you to predict what you can reasonably expect in the way of reaction. And it can be done with a little research. Interview some of them while you are still crafting your presentation, Google them. Why face and operate in the dark when with just a small effort you can flick on the light.
"As long as you're having fun, that's the key. The moment it becomes a grind, it's over."
- Barry Gibb*
*Yes, Rich. I did have to look up who Barry Gibb is.
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