<img src="https://ws.zoominfo.com/pixel/pIUYSip8PKsGpxhxzC1V" width="1" height="1" style="display: none;">

Why Do I Need a HMDA and CRA Transmittal Tool?

author Ncontracts
5 min read
May 1, 2019

The most frequently asked question we receive about HMDA and CRA submission is not how to do it, but whether you need a software solution to do it. If you're wondering why you might need a HMDA or CRA transmittal tool, this post is written just for you! You'll learn all the basics of the HMDA and CRA transmittal process, what tools are on the market, and the benefits of them all.

Since we announced the launch of our HMDA and CRA transmittal software earlier this year, we've started to get a lot of questions about it. One of the most frequent questions we get is "do I need a submission software?" 

To set the stage, you have to understand that HMDA and CRA transmittal is a regulatory requirement. The Home Mortgage Disclosure Act (HMDA) requires that covered financial institutions submit their Loan/Application Record (HMDA LAR) to the regulatory agencies for monitoring and risk management annually. The Community Reinvestment Act (CRA) has a similar submission requirement.

That means that most financial institutions in the US have to submit one or the other file to the federal government.

That's the most important reason you need a HMDA or CRA transmittal tool. However, as with most areas of compliance, how you collect and submit that data matters. There are lots of other elements to consider as you look to improve your CRA and HMDA transmittal.

In this post, you'll learn the answers to five of the most frequently asked questions about CRA and HMDA submission - including why you need a transmittal tool.

Below, you'll learn some of the most frequently asked questions about HMDA and CRA submission, and their answers. Then, you'll see all the reasons why you need a HMDA and/or CRA transmittal tool. Here are 5 FAQs about CRA and HMDA submission - answered!

What is HMDA submission, and what is CRA submission?

HMDA and CRA submission, sometimes called HMDA transmittal, is the process of sharing your HMDA and CRA data with the agencies. The data is shared in a specific format using a secure interface, depending on the regulation. We'll talk more about those formatting specifications later.
It's important to remember the annual lifecycle of HMDA (and CRA) data:

  • Collection & Cleanup
  • Submission
  • Analysis
  • Monitoring & Mitigation

As you can see here, there are a lot of moving parts in HMDA and CRA data management. To learn more, request this worksheet that outlines the HMDA Lifecycle.

How do financial institutions format the data for transmittal?

That specific formatting is an important factor of preparing for a successful HMDA submission, and CRA submission.

Every year, the regulators release a LAR formatting tool for HMDA; we are still waiting on the 2019 edition of the HMDA LAR formatting tool. The 2018 and 2017 HMDA formatting tools are here. CRA formatting requirements differ depending on the size of the institution, and there isn't a government-provided tool. However, the agencies do provide formatting guides for each of the institution size categories.

When is the submission required?

All data collected the prior year must be submitted to the government on March 1. For example, all data collected during 2018 was submitted on March 1, 2019. This is true for both HMDA and CRA data.

How do you submit CRA data? How do you submit HMDA data?

All data must be submitted to the regulatory agencies using the tools provided. Both HMDA and CRA have a specific software.

HMDA data is submitted through the HMDA Platform; that is the only option for financial institutions. 

CRA data is submitted through the FFIEC's Data Entry Software. In addition, financial institutions can submit their CRA LAR via email or by mail using a CD-ROM or diskette. You can learn more about CRA LAR submission here.

Some third-party providers offer software that submits your data for you, as you'll see next.

What are the best HMDA and CRA transmittal tools on the market?

TRUPOINT offers HMDA and CRA transmittal tools that make submitting your data to the government easy. 

Remember, TRUPOINT's Transmittal Tool integrates with TRUPOINT Analytics, our compliance analysis software, making it a perfect fit for current and future Analytics customers.

We also wrote an in-depth blog post about the best HMDA and CRA transmittal tools on the market. 

Why do I need a HMDA or CRA submission software?

There are a lot of great reasons why you need a HMDA and/or CRA transmittal software, as applicable. Here are a few of the most important ones:

  • Reduce your risks and prevent resubmissions.
    • The first and most obvious reason is that HMDA and CRA transmittal are essential parts of your compliance. If you fail to submit accurate data, or fail to submit it the right way, you may be forced to resubmit. In some instances, it may be considered a late submission. At a minimum, your regulators will be able to infer that your institution didn't prioritize CRA and HMDA compliance enough to ensure an accurate submission. When it comes to compliance, you want to start off on the right foot. A submission tool can reduce mistakes, and the risk of a resubmission.
  • Simplify your responsibilities.
    • HMDA and CRA data collection is a challenging task. Submitting that data to the government is also challenging. A submission software can help make the process of collecting, cleaning, and submitting your HMDA and CRA data much easier. The best solutions will offer a team of helpful specialists to make the process as easy on you as possible!
  • Save time and money!
    • As with all solutions, the goal is to truly save you time and money. As referenced above, managing your data is a challenging and time-consuming process for most financial institutions. The larger your institution, the more daunting the task. Conducting that kind of data management and submission manually can take days, and will cost you in terms of time, resource allocation, and attention, even if financial cost isn't considered. 

Remember, the regulators do provide some free tools that can be helpful. If you're a smaller institution, or a less complex one, these can sometimes be enough to achieve compliance. However, you may want to consider a more comprehensive solution if HMDA and CRA submission are consuming a lot of your time and/or energy, or if your current solution provider isn't really meeting your needs.

TRUPOINT Viewpoint: As you consider how to improve your CRA and HMDA submission, know that TRUPOINT is here to help. Your solution doesn't have to be an external providers' software. You can choose to do all of your HMDA data collection, formatting, scrubbing and submission on your own. It won't be easy, and it may not be the most cost- or time-efficient solution, but it certainly is an option. 

However, if you do choose to partner with a company for your HMDA and CRA transmittal, we'd like to throw our proverbial hat in the ring. To get a risk-free, customized demo with a specialist, please click the button below! We will learn more about your institution, and tell you honestly if you need a tool, and if ours might be a good fit.

How to Build a Strong Fair Lending & Redlining Compliance Management System

Subscribe to the Nsight Blog

All Topics Risk & Compliance Product Insight Banks Lending Compliance Credit Unions Risk Management Fair Lending Nfairlending Cluster: Risk Management Compliance Lending Compliance Management Integrated Risk Blog Regulatory Compliance Management Nrisk News & Updates HMDA Risk Mortgage Lenders Vendor Management Ncomply Business Resiliency CRA Lending Compliance Blog Vendor CFPB Ncontinuity Business Continuity Third-Party Vendor Management Cybersecurity Fintech NVendor Strategic Planning Ncyber Regulatory Updates Ntransmittal Audits & Findings OCC Regulatory Compliance Company Culture Audit Nverify Compliance Management Exams FDIC Nfindings Findings NCUA Contract Management Employee Intranet Business Continuity Management Contract FRB Findings Management Enterprise Risk Management FFIEC Ncontracts manager Third-Party Vendors Vendor Risk Vendor Risk Management Wealth Management 1071 ABA Bank Access Control Artificial Intelligence Audit Findings Board Portal Call Report Compliance Risk Cybersecurity Assessment Digital Tansformation Due Diligence Efficiency Employee Engagement Exam findings FIEC Governance and Risk Management Inc. 5000 Internal Audit Management Mortgage Lending Nboardportal Verify integrated risk management
What Should I Do After Submitting My HMDA Data?
CRA

What Should I Do After Submitting My HMDA Data?

Mar 6, 2019 7 min read
5 Fair Lending Lessons Learned in 2019
CRA

5 Fair Lending Lessons Learned in 2019

Sep 25, 2019 5 min read
Answers to 5 Basic FAQs about the Final HMDA Rule
CRA

Answers to 5 Basic FAQs about the Final HMDA Rule

Jan 24, 2018 3 min read