HMDA Audit for Credit Unions and Banks

HMDA Audit is a comprehensive tool that can help institutions meet their HMDA reporting requirements. The streamlined tool has advanced geocoding tools, enabling you to run automated coding based on LOS data. By clicking a button, you can update a property's geocode information. You can also use an interactive map to find property locations and generate codes. These codes will appear in the HMDA worksheet.

This process begins with a Fair Lending Risk Assessment. This document evaluates the internal system of a bank, assigning it a level of risk associated with a fair lending program. It assesses the volume of lending, types of products offered, policy requirements, and complaints received. Once the evaluation is complete, the report assists the bank in establishing an appropriate audit program. The HMDA audit is a semi-annual process that aims to ensure compliance with the law and improve the performance of banks and credit unions.

After completing this process, the examiner will review the Initial Sample and any other HMDA-related data. If the Initial Sample shows errors, examiners should proceed to Stage 2. Then, if the Initial Sample shows no errors, they should go straight to Stage 2. The HMDA audit will help you identify any missing or inconsistent data. Whether the reporting process was completed correctly, a lender can choose to move to the next stage based on the results.

Scrubbing data should begin before the March 1 deadline, but many lenders start this process early in the year. Larger lenders may choose to scrub quarterly to avoid a major task. Those with more than 60,000 applications or covered loans must submit their data quarterly. The HMDA audit is based on risk assessment, the volume of recent errors, and examination comments. If you are unsure, it is best to consult an experienced HMDA consultant to help you meet your compliance requirements.

The HMDA audit has two stages. The first stage involves the testing of individual data fields. The second stage is a selection of selected data fields. After the initial phase, the examiner will make recommendations for implementing changes. It is important to note that the HMDA audit will not affect the LAR itself. It will only affect the data collected by the examiners. These processes will prevent fraud and abuse of HMDA.

HMDA reporting requires several different data fields, including the types of loans, credit unions, and government monitoring information. The data collection process may be challenging, however, and the examiners may direct the credit union to make changes. A credit union must be able to provide adequate documentation to meet the requirements of the HMDA. The HMDA audit should be performed by an experienced HMDA auditor and must be compliant to avoid penalties.

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