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26 | TH E M R EP O RT FEATURE T he Home Mortgage Dis- closure Act came about shortly after I started in the industry in 1973. Since that time, many have asked how lenders can remain profit - able and compliant in the face of HMDA. These questions have only ramped up with the new reporting requirements that were announced at the end of 2015. The majority of added HMDA- related costs lenders see stem from the additional staff needed— which, in turn, raises the cost of originating and servicing loans as well. At the same time however, we also know that it's more than just staff that's costing lenders—it's also price of automation. Why Automation is Key T oday, there's quite a bit of borrower information being passed between systems. Opera- tional effectiveness helps manage the internal cost of origination and servicing a loan. Using standardized data formats, such as MISMO, allows lenders to manage both incoming and outgoing data effectively, and a key driver for automation is being able to do so without slowing down business operations while still managing it in real time for errors and issues. Such automation effectively reduces the workload many have in dealing with the day-to-day processes of originating and servic - ing loans. Automation of both data exchange and the review of the data—thus converting the process Inside HMDA Today's Lenders are Learning How to Navigate the Rules' Changes, as Cost and Compliance Issues Arise By: Harvey Foster to an exception-handling workflow that is also tracking all activity for audit purposes—is what we see as the main lever to control costs. Good Data is Accurate Data C lients we're listening to and collaborating with today are telling us their main concern is the accuracy of the data. In par- ticular for HMDA, most lenders are concerned with being able to ensure they're collecting the right information and that it's accurate, but also that they're doing so in a cost-effective way. There is also concern in the industry about whether lenders will be able to collect all of the new data elements HMDA changes demand during the loan origination process. Looking Into the Crystal Ball L ooking into the future, the new HMDA rules call for changing the frequency of report- ing. However, at this time, that doesn't seem to be as big of a challenge for most of our clients today; they'll deal with that in the future, since that's coming about more in the 2020 timeframe. Instead, clients are focused on the present and their ability to collect and deliver accurate information under the new HMDA rule now. As much as the industry would like to be able to look into the crystal ball, what the Consumer Financial Protection Bureau may do in the future is up in the air— and it's not easy to make predic - tions about. To prepare for future changes, it's crucial to engage industry stakeholders, associations and different workgroups, as well as collaborate with clients. One thing beginning to take shape is the significant conver- gence in regulatory rule-making with industry trends spearheaded by the Federal Finance Housing Agency (FHFA). The industry is also moving to more a frequent data exchange. The future is about modern- izing the lending industry in this