Washington Federal Bank, N.A.
Outcome
The CFPB issued a consent order against Washington Federal Bank, N.A. in October 2020 and assessed a $200,000 civil money penalty for reporting inaccurate HMDA data for 2016 and 2017, with error rates in some data fields reaching nearly 40%, caused by insufficient staffing, inadequate training, and ineffective quality controls.
Details
Washington Federal Bank, N.A. — CFPB $200,000 HMDA Reporting Violations (2020)
Outcome: The CFPB issued a consent order against Washington Federal Bank, N.A. of Seattle, Washington on October 27, 2020, and assessed a $200,000 civil money penalty for reporting inaccurate Home Mortgage Disclosure Act data for 2016 and 2017 across more than 7,000 mortgage applications per year, with data error rates in some fields reaching nearly 40%.
Washington Federal Bank, N.A., a federally insured national bank headquartered in Seattle, Washington (known as WaFd Bank), violated the Home Mortgage Disclosure Act, its implementing Regulation C, and the Consumer Financial Protection Act through systematic errors in its HMDA data submissions for calendar years 2016 and 2017. The bank reported HMDA data for over 7,000 mortgage applications in each year, many of which contained material inaccuracies. In some data fields, error rates reached nearly 40% — a figure reflecting a systemic compliance management failure rather than isolated data entry errors.
The CFPB investigation identified the root causes as a lack of appropriate staffing, insufficient staff training, and ineffective quality control processes in Washington Federal's HMDA compliance workflow. The errors in the 2017 data were found to be directly traceable to weaknesses in the bank's compliance management system that had not been corrected after the 2016 errors were identified. HMDA data is used by regulators, researchers, and the public to assess whether banks are serving the credit needs of the communities they are chartered to serve — including identifying potential fair lending violations — making the integrity of that data a direct regulatory priority.
The $200,000 civil money penalty was accompanied by a requirement to develop and implement an effective compliance management system to prevent future HMDA reporting violations.
Primary Source: CFPB Enforcement Action — Washington Federal Bank, N.A. (October 27, 2020)
How Crucible Prevents This
Crucible's quality-gate hook would flag HMDA data submission files with field-level error rates exceeding tolerance thresholds before regulatory submission. The instinct-observer would detect recurring data quality exceptions in the compliance management system. The pre-tool-check would require documented HMDA data validation procedures before any mortgage data reporting workflow changes.
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