The Consumer Financial Protection Bureau (CFPB) issued a new report in which they analyze lending patterns based on reported HMDA data. The report looks at those financial institutions reporting under the 25 closed-end loans or less framework. In May 2020, this threshold was increased to 100 closed-end loans. The report provides observations on three specific questions:
- What are the loan and geographic characteristics of the data lost by increasing the reporting threshold?
- What are the demographic characteristics of borrowers with loans no longer being reported?
- Are there systemic differences in the lending patterns?
The CFPB acknowledges that the data analyzed is limited but indicates the report did find some difference in lending patterns and identifies that the overwhelming majority of lenders with origination volumes between 25 and 100 are small community banks and credit unions.