Who is subject to hmda reporting

List of Partners vendors. The Home Mortgage Disclosure Act HMDA is a federal law approved in that requires mortgage lenders to keep records of key pieces of information regarding their lending practices, which they must submit to regulatory authorities. It was implemented by the Federal Reserve through Regulation C. The Home Mortgage Disclosure Act and Regulation C include requirements for regulatory submissions and public disclosures. Regulation C is also an important component of the Act.

Regulation C was created by the Federal Reserve to overlay the requirements of the Act and designate certain additional requirements that banks must follow.

In general, the primary purposes of the Home Mortgage Disclosure Act and Regulation C are to monitor the geographic targets of mortgage lenders, providing a way to identify predatory or discriminatory lending practices, and to report statistics on the mortgage market to the government. The HMDA also helps support government-sponsored community investment initiatives by providing a means for analyzing the allocation of resources.

The data are used by government agencies, consumer groups, and bank examiners to determine compliance with various federal fair housing and credit laws including the Equal Credit Opportunity Act, the Fair Housing Act, the Community Reinvestment Act CRA , and state laws.

The HMDA asks lenders to identify the sex, race, and income of those applying for or obtaining mortgages, but the data is anonymized in record keeping. Under HMDA and Regulation C, certain mortgage lenders are required to maintain records of specified mortgage lending information for reporting purposes.

In , 5, lenders reported 8. In April , the CFPB issued a final rule raising the data-reporting thresholds for collecting and reporting data about closed-end mortgage loans under the HMDA from 25 to loans effective July 1, HMDA reporting allows regulators to analyze information on mortgage loans and mortgage lending trends in a number of categories, such as the number of pre-approvals made, the number of mortgages granted, loan amounts, and the purposes of individual loans.

The federal reporting also greatly details the approvals of various types of government-sponsored loans including the Federal Housing Administration , Farm Service Agency, Rural Housing Services, and Veterans Affairs loans. Federal Regulation C requires lenders to prominently display a poster in every branch office lobby that provides information on requesting their unique HMDA statistics.

Section No other submission methods are permitted. Credit unions must submit data collected in a pipe delimited text file. The LAR Formatting Tool opens new window may be especially helpful for credit unions with small volumes of reported loans that do not use vendor or other software to prepare their HMDA data for submission.

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. It is also important that financial institutions have a process to track nonoriginated loan applications, such as denied, withdrawn, approved but not accepted, or incomplete applications that have a HMDA purpose. If an institution has a largely manual HMDA process, a centralized review of all nonoriginated loan applications can help ensure the institution reports nonoriginated applications appropriately.

Deciding how an organization will handle certain HMDA scenarios, such as determining the specific information to report for which the regulation allows some latitude , eliminates guesswork and ensures consistency across business lines. Some examples of situations in which the bank should determine in advance how it will respond include:.

Centralizing data collection can be an effective way to reduce reporting errors by reducing the number of people in the data collection process. As part of the centralized process, financial institutions may designate a HMDA subject matter expert SME to serve as the central point of contact for data collection and reporting. Providing tools for staff, such as flow charts, worksheets, and industry materials, can also aid in the collection process.

Flow charts may include guidance that helps staff decide whether a transaction is HMDA reportable. HMDA worksheets are an effective way for helping staff collect data on all key fields during the loan application process.

For example, the worksheet may indicate where to find gross income in the file, depending on the loan type, and could include a reference of when income should be reported as not applicable. Cheat sheets may remind staff how to geocode the collateral securing the loan. Many banks find that using an automated collection process reduces the burden of compiling HMDA data.

Automated collection offers a consistent process, using the information entered during loan origination as source documentation for HMDA data. The level of automation may vary from bank to bank, usually depending on factors such as origination volume and institutional complexity. Transactional coverage charts are reference tools illustrating one approach to help determine whether a transaction is reportable under HMDA. Institutional coverage chart effective January 1, Transactional coverage chart effective January 1, Institutional coverage chart effective July 1, Transactional coverage chart effective July 1, Unofficial redline of the Final Rule amendments to Regulation C.