CFPB Ends Key Mortgage Alert Service For Banks

Banks face reduced visibility over key mortgage-lending compliance data after the US Consumer Financial Protection Bureau discontinued its Home Mortgage Disclosure Act email alert service.

The move means lenders will no longer receive routine notifications about changes to the HMDA reporting platform — a system banks rely on to monitor fair lending compliance — leaving them to track updates manually through the CFPB’s website.

The bureau said it had ended the service because of “operational constraints”, despite the White House budget director, Russ Vought, submitting a $145mn funding request to the Federal Reserve.

HMDA requires banks and other lenders to submit detailed, loan-level mortgage data, including borrower demographics, and is a central tool for monitoring compliance with fair-lending laws. Critics say scaling back access to HMDA updates risks weakening oversight of mortgage practices at a time when the future scope of the CFPB itself is under political pressure.

Clifford Rossi, a former managing director of global consumer risk management at Citibank, said HMDA data was “essential” for banks and regulators alike. “Reducing or delaying HMDA reporting could have significant consequences,” he said, citing its role in enforcing laws such as the Equal Credit Opportunity Act.

Market stress signals risk

According to the Mortgage Bankers Association, homeowners with Federal Housing Administration-backed mortgages showed signs of increased financial stress in the third quarter of 2025, reflecting a softer labour market and other pressures.

A US Government Accountability Office report has argued that “financial regulators can use new HMDA data points to better identify institutions with lending patterns that indicate heightened fair lending risk.”

One housing advocate warned that the CFPB’s move weakens one of the few public tools used to identify emerging risks not just for borrowers, but for the financial system.

Jesse Van Tol, president and chief executive of the National Community Reinvestment Coalition, said reduced HMDA reporting would have broad consequences. “Every community would be impacted. HMDA covers 88 per cent of all mortgage originations in the US. It tells us who is getting loans, who is making loans and what they cost. It is critical data for people, lenders, government and organisations like ours,” he said.

“We are very concerned about the CFPB’s ability to maintain and develop this dataset, which provides a critical way to monitor the mortgage market’s overall health and performance. This change is symptomatic of the erosion of the CFPB.”

In response to the CFPB’s decision, Adam DeSanctis, vice-president of communications at the Mortgage Bankers Association, said the group would inform bank members to rely on guidance posted on the bureau’s website. The CFPB has directed past subscribers to its HMDA News and Updates page.

Van Tol, a former member of the Federal Reserve Board’s consumer advisory council, said fair-lending enforcement and compliance were strongest when reinforced by public scrutiny.

“When access to HMDA information becomes less user-friendly, it can reduce the likelihood that discrimination patterns are identified quickly by communities and the media,” he said. “The concern is that this represents another step towards weakening transparency.”

In 2025, the Office of the Comptroller of the Currency faced scrutiny after scaling back bias checks in lending reviews, prompting criticism from Sarah Bloom Raskin, former deputy US Treasury secretary.

“What we’re seeing is really a disempowering of the agency’s role in implementing the Equal Credit Opportunity Act,” she told The Banker.

Political pressure mounts

Republican senator Ted Cruz of Texas said in 2025 that the CFPB was a “bureaucratic agency that has imposed burdensome and harmful regulations on American businesses, banks and credit unions”, and argued that the Federal Reserve should not fund the bureau.

Although Rossi said reducing HMDA data could have implications for regulators, he added that resources currently dedicated to HMDA reporting could be redirected or eliminated, potentially lowering costs for lenders.

Senate Democrats, including Elizabeth Warren of Massachusetts, have pushed back against the CFPB’s “lack of transparency”, arguing that it creates “knowledge gaps” not only in housing but also in small business lending.

“Congress did not ask the CFPB to collect the bare minimum of data, and only from the biggest banks and credit unions,” Democrats wrote last week, citing Equal Credit Opportunity Act concerns and the need for business owners to identify and challenge discrimination.

Van Tol said limiting HMDA services should be viewed in a broader context. He described it as part of a “death by 1,000 cuts” approach to the agency.

“This is particularly concerning in light of attempts to shut down the CFPB outright, or to eliminate or reduce mechanisms that allow the public access to data and a voice in how banks are serving the public good,” he added.