The Consumer Financial Protection Bureau (CFPB) has reached a settlement with Washington Federal Bank, N.A. addressing a fault in its Home Mortgage Disclosure Act (HMDA) data reports from 2016 and 2017.
“Inaccurate HMDA data can make it difficult for the public and regulators to discover and stop discrimination in home mortgage lending or for public officials and lenders to tell whether a community’s credit needs are being met,” the bureau stated in a release.
The CFPB found Washington Federal violated HMDA and other regulations by failing to report accurate data regarding mortgage loan applications. This is not the first time the bank has been found to be faulty in reporting requirements: it is currently subject to a 2013 consent order based on previous findings of similar inaccuracies.
“Washington Federal reported HMDA data for over 7,000 mortgage applications in each of 2016 and 2017,” the bureau stated. “The bureau found that these data included significant errors, with some samples having error rates as high as 40 percent. The bureau found that the errors in Washington Federal’s 2016 HMDA data were caused by a lack of appropriate staff, insufficient staff training, and ineffective quality control, and that the errors in its 2017 HMDA data were directly related to weaknesses in Washington Federal’s compliance-management system. Weaknesses were specifically found in the areas of board and management oversight, monitoring, and policies and procedures.”
The settlement requires Washington Federal to pay a $200,000 civil money penalty, as well as implement a compliance-management system to prevent future violations.