Leaving politics aside, the Dodd-Frank Wall Street Reform and Consumer Protection Act passed here in the US in July is going to require financial institutions to report more data to the federal government than these folks have been reporting in the past. After doing some Google-Kung-Fu it looks like financial institutions have to comply to a newer version of a guideline called Home Mortgage Disclosure Act (HMDA) (http://www.ffiec.gov/hmda/guide.htm), and smaller businesses are required to report data under a guideline called ECOA.
A quick glance at the HMDA website and it looks like the reporting guidelines have changed almost every year, so this shouldn’t be significant news to those folks who need to supply data to Uncle Sam each year.
From a Data Geek’s perspective, I’m taking a glance at the 120-page guideline for 2010 (http://www.ffiec.gov/hmda/pdf/2010guide.pdf), which looks like it has an effective date of January 2010 and is for HMDA submissions due in March, 2011. My first thought is, “Does the guideline really have to be 120 pages?” Second thought: “Updated in January for March of next year and now a new Act is passed in July, what are people going to be reporting on in March?” The document first goes through some information on “who needs to submit data and applications.” OK, not too bad. It then describes the application forms in detail - makes sense, I guess. Next they start talking about geographical data and “MSA/MD boundaries, which are defined by the Office of Management and Budget.” Seems like the data suppliers could supply the address information and the government could go ahead and assign these once they receive the information, but who am I to judge? Scanning some more and then it hits me - wait a minute, they are asking these financial institutions to submit a single form for every loan? I then scroll down to page 46 and see what looks like a report or list of loans. Perhaps this could be submitted instead of the one-by-one method? Further down the document they begin discussing how to submit the data. OK, now we’re talking my language here. It looks like they’ve built out a GUI-based desktop tool for folks to do data entry, and the data will be collected and stored in the format the government would be happy with.
Poking around some more it looks like the content or format of the file the government wants can be found here: ttp://www.ffiec.gov/hmda/pdf/spec2010.pdf. In summary, it looks like they want a single file consisting of two record types. Record type 1 is data (22 fields) about the organization who is submitting and type 2 (39 fields) is about the loans in general (e.g. loan type, loan value, etc.). Interestingly enough, the street address of the borrower or the property for which the loan is made isn’t listed as required fields, but the state, county and census track/area are required. The GUI-based desktop tool probably does a nice job building this file but I’m guessing most larger organizations are generating the file themselves and smaller organizations are using the tool. At least the Government hasn’t made the file format super complex with dozens of record types and hundreds of required fields. According to the buzz around the Act, the number of required fields (and record types?) will increase and I’d be curious to see what they are asking for next (my Google-Kung-Fu isn’t sufficient to find it today).
As our government grows, each industry should anticipate “participating” in sharing more and more data. Some government requirements will be straightforward and clear to follow, and others will be clear as mud. In designing your solution to provide these data sets to your government you should anticipate the requirements to change, perhaps even faster then they have in the past (just like these HMDA requirements are changing very quickly). In a future installment here at the DataFlux CoE, I’ll outline some of the steps I’d put in place if I were part of the team of folks receiving this data.
Until next time…Rich