Banks have an obligation to comply with various laws and regulations regarding how they do business. For example, many banks and other financial institutions that offer mortgage loans must comply with the Home Mortgage Disclosure Act, which requires them to disclose mortgage data to the public. If financial institutions in Minnesota or elsewhere do not, they could face serious consequences.
Not only do banks have to report their mortgage data, but they also have to do it correctly. If they make errors in their reporting, they could be violating the HMDA. If errors or other violations are suspected, the Consumer Financial Protection Bureau could start an investigation, which is what happened to one bank in another state.
According to reports, the bank had a 40% error rate in the HMDA reports from 2016 that were randomly chosen by the CFPB. Those rates also exceeded the acceptable threshold in 2017. As a result, the CFPD ordered the bank to pay $200,000 in fines for those errors and violations of the law. The fine was reportedly so significant because this particular bank had already been investigated for HMDA violations in the past.
No financial institution wants to come under investigation for regulation violations, and as this case shows, evidence of violations could lead to hefty fines. As a result, Minnesota banking institutions may want to ensure that they fully understand their obligations under the Home Mortgage Disclosure Act and what to do if they face an investigation for possible noncompliance. Discussing this particular law with experienced attorneys may be useful in such an endeavor.