Seattle-based Washington Federal Bank., N.A., has settled with the Consumer Financial Protection Bureau over allegations it reported inaccurate Home Mortgage Disclosure Act data.
The settlement requires Washington Federal to pay a $200,000 civil money penalty and develop and implement an effective compliance-management system to prevent future violations.
Washington Federal violated HMDA, its implementing regulation, Regulation C, and the Consumer Financial Protection Act of 2010 by failing to report accurate data about its mortgage transactions for 2016 and 2017 to the bureau, the agency said. The $18 billion bank is currently subject to a 2013 consent order with the bureau based on its previous findings that Washington Federal violated HMDA and Regulation C.
Washington Federal reported HMDA data for more than 7,000 mortgage applications in each of 2016 and 2017 which included significant errors, with some samples having error rates as high as 40 percent, the CFPB said. Errors in 2016 HMDA data were caused by a lack of appropriate staff, insufficient staff training and ineffective quality control; errors in HMDA data were directly related to weaknesses in Washington Federal’s compliance-management system, the bureau said. Weaknesses were specifically found in the areas of board and management oversight, monitoring, and policies and procedures.
“The occurrence of errors in many different fields, rather than concentrated in one or two fields, indicates broad [compliance-management system] failures and a lack of adequate resources, because the errors were not caught, and the errors cannot be directly attributed to one or two systemic failures,” the bureau said in its consent order.