For HMDA reporters, management is responsible for ensuring procedures are in place to collect and maintain accurate data regarding each loan application, loan origination, and loan purchase that must be reported. Further, the board and management also need to ensure the institution provides individuals assigned responsibility for preparing and maintaining the data appropriate training regarding the regulatory requirements, resources, and tools needed to report complete and accurate HMDA data.
Sound practices for successful data collection include creating effective procedures, providing useful tools to staff members responsible for HMDA data collection, and delivering comprehensive training.
The following strategies are suggested to help achieve an effective HMDA program. Successful data collection starts with developing HMDA data collection procedures. Effective HMDA procedures document processes for identifying all HMDA reportable transactions and develop consistent approaches for identifying the underlying source of information for reporting data fields on the HMDA loan application register LAR to ensure accurate data collection.
Although HMDA applies to both depository and nondepository financial institutions, this article only addresses the requirements for depository institutions. Once an institution confirms it is covered by HMDA, the next step in the data collection and reporting process is to identify all HMDA reportable transactions.
Generally speaking, unless a transaction is expressly excluded under 12 C. An institution that incorrectly determines whether HMDA applies to a particular transaction could collect GMI when it is not required, or fail to collect it when it is, resulting in examination violations and potential fair lending issues.
HMDA reporting requirements apply to loans or applications that satisfy the following requirements:. But even if a HMDA reporter is partially exempt, it must still collect and report the nonexempt data points. The open- and closed-end exemptions operate independently from each other; an institution may qualify for one partial exemption but not the other. Further, business lines other than those offering traditional residential mortgages may offer credit extensions that require the institutions to collect and report HMDA data.
For example, the commercial loan department may originate purchase-money loans for multifamily buildings such as apartment, cooperative, or condominium buildings. Originating HMDA-reportable transactions in multiple business lines makes identifying and collecting data more challenging, and staff in nonmortgage origination business lines may not be as mindful of HMDA requirements in day-to-day operations.
As a reminder, this table is illustrative; other types of loans may be HMDA reportable. The purpose test now only applies to dwelling-secured loans with a business or commercial purpose.
Institutions have different methods of ensuring that they accurately identify HMDA-reportable transactions. At some institutions, lenders are initially responsible for identifying HMDA-related applications, and the compliance department confirms lenders identified all covered applications by comparing the new loan list with the HMDA LAR.
Larger reporters often use automated systems to identify HMDA-reportable transactions. Because the original construction loan was later modified into permanent financing, without a new extension of credit occurring, the modification is not reportable, under comment 2 d For construction and permanent loans where the construction loan is a separate transaction, the financial institution reports only the loan term of the permanent loan.
For general information about the loan term data point, see section 5. In this situation, the financial institution reports that the loan includes interest-only payments. It does not matter that the financial institution chose to disclose separately for each phase, as the transaction is still based on a single legal obligation.
For general information about the non-amortizing features data point, see section 5. For construction and permanent loans where the construction loan is a separate transaction designed to be replaced by permanent financing, the financial institution reports only the initial interest rate of the permanent loan. For general information about the interest rate data point, see section 5.
If the interest rate may first change during the construction phase, the financial institution reports the number of months, or proposed number of months, after the closing or account opening until the date that the interest rate may first change.
If the interest rate may first change during the permanent phase, the financial institution reports the number of months, or proposed number of months, after closing or account opening until the date that the interest rate may first change, which includes the number of months in the construction phase and any months in the permanent phase that occur before the interest rate may first change.
For general information about the introductory rate period data point, see section 5. Skip to main content. Institutional and Transactional Coverage 1. What are the loan volume thresholds for determining institutional and transactional coverage? Show Hide As of January 1, , the loan-volume thresholds are closed-end mortgage loans in each of the two preceding calendar years and open-end lines of credit in each of the two preceding calendar years. Updated Nov.
My institution originated closed-end mortgage loans and open-end lines of credit in calendar year and closed-end mortgage loans and open-end lines of credit in calendar year My institution has met all other Regulation C institutional coverage criteria. Is my institution required to collect and report HMDA data for calendar year on closed-end mortgage loans and open-end lines of credit? Show Hide Your institution will be required to collect and report data about its closed-end mortgage loans for calendar year because it originated at least closed-end mortgage loans in each of the two preceding calendar years and My institution has met all the other Regulation C institutional coverage criteria.
Show Hide Yes, your institution will be required to collect and report data about its closed-end mortgage loans and open-end lines of credit for calendar year because it originated at least closed-end mortgage loans in each of the two preceding calendar years and and it originated at least open-end lines of credit in each of the two preceding calendar years and My financial institution met the loan-volume threshold for closed-end mortgage loans and all other Regulation C institutional coverage criteria, but it did not meet the loan-volume threshold for open-end lines of credit.
Can my financial institution collect and report data about its open-end lines of credit even though it did not meet the loan-volume threshold for open-end lines of credit? Show Hide Yes. My financial institution originated less than closed-end mortgage loans and less than open-end lines of credit. I heard that my financial institution was exempt from collecting and reporting data. Show Hide Effective July 1, , if your financial institution originated at least closed-end mortgage loans in each of the two preceding calendar years and met all other Regulation C institutional coverage criteria, your financial institution will be required to collect and report data about its closed-end mortgage loans.
Are all types of lending institutions eligible for the partial exemption? Show Hide No. Can a financial institution that originates fewer than open-end lines of credit in each of the two preceding calendar years claim the partial exemption for open-end lines of credit even if it originated or more closed-end mortgage loans in one of those years?
A loan or line of credit is not temporary financing merely because its term is short. The purchase of an interest in a pool of Closed-End Mortgage Loans or Open-End Lines of Credit, such as mortgage-participation certificates, mortgage-backed securities, or real estate mortgage investment conduits. A Financial Institution may use any reasonable standard to determine the primary use of the property, and may select the standard to apply on a case-by-case basis.
Comment 3 c 9 Not all transactions that are primarily for a business purpose are Excluded Transactions. Thus, a Financial Institution must collect, record, and report data for Dwelling-secured, business-purpose loans and lines of credit that are Home Improvement Loans, Home Purchase Loans, or Refinancings if no other exclusion applies.
Comment 3 c 10 For more information and examples of business-purpose or commercial-purpose transactions that are Covered Loans, see comment 3 c 10 -3 and If you are subject to the full exemption for open-end lines of credit, you are not required to report any data on open-end lines of credit. If you are eligible for the exemptions but have gathered all the data field information, can you choose to file with the "exemption" classification in the designated fields, yet have available for internal use, the data that has been collected?
We are an institution that qualifies for the partial exemption. We would like to get some relief from collecting and then checking the exempt data fields. Would this not be the case if we follow your recommendation to have our LOS export everything just as a non-exempt lender? If you qualify for the partial exemption, you have the option to report any or all of the exempt data points.
This means edits will be performed on the exempt codes and not the actual data — so, no validation of the actual data for HMDA purposes is required. Are we required to report all the data fields for applications dispositioned through May, when S. The partial exemption applies to all data to be reported for The Interpretive and procedural rule allows a depository institution that qualifies for the partial exemption to optionally report actual data collected prior to S.
Exempt codes may be reported for all LAR records. Some insured depository institutions and insured credit unions eligible for a partial exemption under the Act may therefore find it less burdensome to report all of the data including the exempt data points than to separate the exempt data points from the required data points and exclude the exempt data points from their submissions.
This may be particularly true with respect to data submission in , as collection of data was already underway when the Act took effect, and system changes implementing the new partial exemptions may take time to complete. Even after insured depository institutions and insured credit unions have had time to adjust their systems, some may still find it less burdensome to report data covered by a partial exemption, especially if their loan volumes tend to fluctuate above or below the threshold from year to year.
Section a provides that certain requirements do not apply to affected institutions but does not prohibit those affected institutions from voluntarily reporting data. This interpretation is consistent not only with the statutory text but also with the apparent congressional intent to reduce the burden on certain institutions. Are we supposed to place all information on the system even if we are a small lender and it is not required?
Did I understand correctly that it is recommended we import all fields and then prior to submission, select the exempt status to report the exempt codes for the 53 optional data fields? As described previously, you have the option to report any or all of the exempt data fields or to report all using the exempt codes. If your institution qualifies for the partial exemption, you are NOT required to collect the exempt data points. This provides a more controlled approach to managing how and when you will use the additional data — such as during an exam where it may be requested as part of a fair lending review.
If you qualify for exempt reporting, are you still required to report the state i. NE of the property. We are unsure if this is the state code from Geocoding or the State field following the property address and city. The state code is a required field because it was captured for both the property address and the property location data points. The code to be captured is the 2-digit letter code; i. Do we need to create a new account on the CFPB platform if we went through a merger, have a new bank name even if we have the same Tax ID?
You will need to ensure that your LEI is correct and that the institution name and information associated with the LEI is consistent with the surviving institution.
If a merger occurs after January 1, , do we need to submit using the new entity LEI for ? How do we correct the name? For an existing LEI, how important is it for the office address to be updated to the recent address due to a move? It is important that all information associated with the LEI is correct.
You can generally do this by contacting your LEI issuing organization. Does this mean I need to renew my LEI? It would be best to reach out to you LEI issuing organization to verify details and current status. The LEI is required on the transmittal of the data to confirm the entity exists. In addition, the LEI is a component of the Universal Loan Identifier ULI , which is reported on every application for institutions not subject to the partial exemption. Can you clarify whether an exempt credit union will need to use an LEI, as we did last year.
The info I see, read and researched seems to indicate that we can drop the LEI and simply use loan number this year - despite having used the LEI last year? Your financial institution shall assign and report an identifier that:.
If a financial institution is eligible for the S. If you are not eligible for the S. Do you know if AUS decisions are required on denied loans? Reporting not applicable is only available for purchased loans, when an AUS was not used to evaluate the application, or when the applicant or co-applicant are not natural persons.
Yes, unless the transaction qualifies for any of the criteria for reporting Not Applicable:. What method is used to determine Total Units? For a loan secured by 5 single family properties, would you report 5 units?
In the case of 4 unit apartment buildings, would you report ? The determination of Total Units is based on the number of individual units securing the application. So, for the examples you have provided you would report as you have described — 5 units and units.
Enter, in numeral form, the number of individual dwelling units related to the property securing the covered loan or, in the case of an application, proposed to secure the covered loan. Example: If there are five 5 individual dwelling units, enter 5. If we have a commercial loan that needs to be reported for HMDA, are we required to enter a value in the loan term and interest rate fields?
These fields generally do not apply to commercial loans, as they do not relate to Reg B. We are getting a quality edit for not completing these fields in the most recent update in QuestSoft.
Is it acceptable to make them NA? Loan term and interest rate fields may ONLY be reported as not applicable as follows:. ECOA and Regulation B apply to all consumer and commercial credit transactions, with limited exceptions.
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