Managing Director
The
Legal Entity Identifier (“LEI”) is a unique 20-character code that identifies
distinct legal entities which engage in financial transactions. The LEI is a
global standard, designed to be non-proprietary data that is freely accessible
to all. Many financial institutions have not obtained a Legal Entity Identifier
(LEI).
A financial institution must provide with the
following information in its HMDA submission on or after January 1, 2018:
i. Its name;
ii. The calendar year the data submission covers pursuant to paragraph
(a)(1)(i) of this section or calendar quarter and year the data submission
covers pursuant to paragraph (a)(1)(ii) of this section;
iii. The name and contact information of a person who may be contacted
with questions about the institution's submission;
iv. Its appropriate Federal agency;
v. The total number of entries contained in the submission;
vi. Its Federal Taxpayer Identification number; and
vii. Its Legal Entity
Identifier (LEI) as described in § 1003.4(a)(1)(i)(A)
[Emphasis added. See 5(a)(3)(vii)—Legal Entity
Identifier (LEI)]
For
purposes of the submission requirement, “appropriate Federal agency” means the
appropriate agency for the financial institution as determined pursuant to §
304(h)(2) of the Home Mortgage Disclosure Act [12 U.S.C. 2803(h)(2)] or a
financial institution subject to the Consumer Financial Protection Bureau's (“Bureau”)
supervisory authority under § 1025(a) of the Consumer Financial Protection Act
of 2010 [12 U.S.C. 5515(a)].
If
your financial institution needs an LEI, the GMEI Utility is endorsed by the Global LEI Foundation and also has a search function. There are some frequently asked questions on their website and we
provide below a few highlights derived from that resource.
- Who
can register the financial institution? You must currently be an employee of
the financial institution you are registering and also authorized by the
financial institution to register for an LEI. Alternatively, financial
institutions may use a third party through an assisted registration process.
The person registering the financial institution will need a user account,
which may be created here.
- What
information is needed to register? The basic information listed in the ISO 17422, such as the financial institution’s legal name, registered
address, headquarters address, legal form, and so forth.
- What
is the cost? The GMEI Utility charges $200 for each registration request plus a
$19 surcharge. To maintain and keep the LEI registration active, the fee for
each registration is $100 plus a $19 surcharge. For more information, visit the
FAQs specific to payment.
Once
payment is processed, the GMEI will validate the financial institution using
public sources. Once this process is complete, it takes about three business
days for an LEI to be issued in the GMEI database. Overall, the GMEI Utility’s
FAQs state that most requests are “cleared” within three to five business days.
It is advisable to review the CFPB’s HMDA implementation webpage for more information.
Frequently Asked Questions
Q: Why do we need an LEI?
A: The Bureau has taken the position
that an LEI could improve the ability to identify a financial institution
reporting data and correlate it to its corporate configuration. In addition,
the Bureau has stated that “facilitating identification of a financial
institution's corporate family could help data users identify possible
discriminatory lending patterns and assist in identifying market activity and
risks by related companies.” By facilitating identification, this requirement
apparently is also meant to help data users identify whether financial
institutions are serving the housing needs of their communities. [§
1003.5(a)(3)]
Q: Should we be getting our LEI as
soon as possible? Can we get an LEI before we have to start using it, or do we
have to use it as soon as we obtain it?
A: We recommend that you obtain your
LEI by the first or second quarter of 2017. There is no reason to delay. We
don’t anticipate the price to change. However, you must have an LEI for all
loans submitted for HMDA on or after January 1, 2018.
Q: Do you anticipate the Uniform Loan
Identifier ("ULI") to be calculated by Loan Origination Systems?
A: We do anticipate that many LOSs
will offer to provide this number. However, it is very possible that they may
leave this to the vendor collecting your HMDA data. Some concern has been
raised about commercial or consumer systems needing such a programming
solution. It is our understanding that the Bureau is evaluating this
requirement with respect to a compliance effective date for calculating and
verifying the ULI and ensuring it has not been previously used.