Guidance · FRB · 5 May 2022
Financial institutions must submit HMDA data in pipe-delimited format by March 1 following the calendar year. They must report all covered loan originations, purchases, and applications, including preapproval requests denied or approved but not accepted. Institutions must include their name, TIN, LEI, and appropriate Federal HMDA reporting agency. Exempt institutions must report state-required data to their state agency. Surviving entities in mergers must report data for the entire calendar year if both were subject to Regulation C.
BOARD OF GOVERNORS
OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D.C. 20551
DIVISION OF CONSUMER
AND COMMUNITY AFFAIRS
CA 22-4
May 5, 2022
TO THE OFFICERS AND MANAGERS IN CHARGE OF CONSUMER AFFAIRS SECTIONS
SUBJECT:
Revised “A Guide to HMDA Reporting: Getting It Right!”
Applicability to Community Banking Organizations: This guidance applies to all institutions supervised by the Federal Reserve, including those with total consolidated assets of $10 billion or less.
The Task Force on Consumer Compliance of the Federal Financial Institutions Examination Council recently developed a revised version of “A Guide to HMDA Reporting: Getting It Right!” (Guide). The updated Guide is intended to assist financial institutions in complying with the Home Mortgage Disclosure Act (HMDA)1 as implemented by the Consumer Financial Protection Bureau’s (CFPB) Regulation C.2 This Guide applies to HMDA data that financial institutions are required to collect beginning on January 1, 2022 and must submit by March 1, 2023. The Guide provides helpful background information and an easy-to-use summary of certain key requirements, including those relating to institutional coverage, transactional coverage, and data collection, reporting, and disclosure requirements.
This edition of the Guide incorporates amendments made to HMDA by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)3 and the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA).4 The Dodd-Frank Act amended HMDA, transferred rulewriting authority to the CFPB, and expanded the scope of information that must be collected, reported, and disclosed under HMDA, among other changes.
In October 2015, the CFPB issued the 2015 HMDA Rule implementing the Dodd-Frank Act amendments to Regulation C.5 The 2015 HMDA Rule modified the types of institutions and transactions subject to Regulation C, the types of data that institutions are required to collect, and the processes for reporting and disclosing the required data. On August 24, 2017, the CFPB issued a 2017 HMDA Rule to further amend Regulation C to make technical corrections and clarify certain requirements adopted by the 2015 HMDA Rule.6
The EGRRCPA amended HMDA by adding partial exemptions from HMDA’s requirements for certain transactions made by certain insured depository institutions and insured credit unions. On August 31, 2018, the CFPB issued a 2018 HMDA Rule to implement and clarify changes made by the EGRRCPA.7 On October 10, 2019, the CFPB issued the 2019 HMDA Rule to extend the temporary threshold for reporting data about open end lines of credit and implement and further clarify the partial exemptions created by the EGRRCPA.8
On April 16, 2020, the Bureau issued a 2020 HMDA Rule to adjust the thresholds for reporting data about closed-end mortgage loans, effective July 1, 2020, and the thresholds for reporting data about open-end lines of credit, effective January 1, 2022.9
Reserve Banks are asked to distribute this letter to the Federal Reserve-supervised institutions in their districts, as well as to their supervisory and examination staff. If supervised financial institutions have questions about the guidance set forth in this letter, they are encouraged to contact the responsible Reserve Bank. In addition, questions may be sent via the Board’s public website.10
signed by
Eric Belsky
Director
Division of Consumer and Community Affairs
Attachments:
Revised “A Guide to HMDA Reporting: Getting It Right!”
Cross References:
EDITION EFFECTIVE JANUARY 1, 2022
(For HMDA Submissions due March 1, 2023)
A GUIDE TO
HMDA
Reporting
Getting It Right!
Federal Financial Institutions
Examination Council
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2022
Edition
2022
Edition
Last Edited:
February 28, 2022
A GUIDE TO HMDA Reporting: Getting It Right!
Edition effective January 1, 2022 (for HMDA submissions due March 1, 2023) This edition of the Guide is the comprehensive edition for the 2022 calendar year data (due March 1, 2023). Appendices include:
Contents Foreword......................................................................................... I
Summary of Requirements .......................................................... 1
Institutional Coverage: Who Must Report? ............................................................. 1
Transactional Coverage: What Is Reported? .......................................................... 11
Compilation of Reportable Data: What Is Reported?............................................. 33
Recording, Reporting, and Disclosure: When is it Reported?.............................. 35
Appendices..................................................................................43
Overview of Data Requirements Chart .................................................................. A-1 HMDA Small Entity Compliance Guide ................................................................. B-1 Instructions on Collection of Data on Ethnicity, Race, and Sex ....................... C-1 Institutional Coverage Chart ................................................................................. D-1 Transactional Coverage Chart .............................................................................. E-1 Partial Exemptions Charts .....................................................................................F-1 Data Fields and Data Points Chart ....................................................................... G-1 Regulation C ........................................................................................................... H-1 Official Interpretations to Regulation C .................................................................I-1 Federal HMDA Reporting Agencies ......................................................................J-1 HMDA Poster .......................................................................................................... K-1
A Guide to HMDA Reporting: Getting It Right! will assist you in complying with the Home Mortgage Disclosure Act (HMDA) as implemented by the Consumer Financial Protection Bureau’s Regulation C, 12 CFR Part 1003 (Regulation C). The purpose of this Guide is to provide an easy-to-use summary of certain key requirements. This Guide does not provide detailed information about the HMDA submission process, or file, data, and edit specifications. Information about those topics may be found on the FFIEC’s Resources for HMDA Filers website, available at Foreword ffiec.cfpb.gov and www.ffiec.gov/hmda/. The Foreword and Summary of Requirements sections of the Guide were developed by the Federal Financial Institutions Examination Council (FFIEC) — the Board of Governors of the Federal Reserve System (Board), the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the State Liaison Committee (SLC) — and the U.S. Department of Housing and Urban Development (HUD). The appendices include, in addition to Regulation C and its Official Interpretations, certain HMDA compliance materials developed and issued exclusively by the CFPB and not by the FFIEC or its other member agencies. Financial institutions may wish to consult and rely upon additional compliance resources that their Federal supervisory agencies may offer. Contact information for each agency is available in Appendix J. This edition of the Guide incorporates the amendments made to HMDA by the DoddFrank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)1 and the 1 Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111-203, 124 Stat. 1376, 2097-2101 (2010). I | 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT!
Economic Growth, Regulatory Relief, and Consumer Protection Act (The 2018 Act).2 The Dodd-Frank Act amended HMDA, transferred rulewriting authority to the CFPB and expanded the scope of information that must be collected, reported, and disclosed under HMDA, among other changes. In October 2015, the CFPB issued the 2015 HMDA Rule implementing the Dodd-Frank Act amendments to Regulation C.3 The 2015 HMDA Rule modified the types of institutions and transactions subject to Regulation C, the types of data that institutions are required to collect, and the processes for reporting and disclosing the required data.4 On August 24, 2017, the CFPB issued a 2017 HMDA Rule to further amend Regulation C to make technical corrections and clarify and amend certain requirements adopted by the 2015 HMDA Rule.5 The 2018 Act amended HMDA by adding partial exemptions from HMDA’s requirements for certain transactions made by certain insured depository institutions 2 Public Law, No. 115-174, 132 Stat. 1296 (2018). The President signed the Economic Growth, Regulatory Relief, and Consumer Protection Act into law on May 24, 2018. 3 Home Mortgage Disclosure (Regulation C), 80 FR 66128 (Oct. 28, 2015) (2015 HMDA Rule). 4 2015 HMDA Rule, 80 FR 66128-29. For more information on the specific changes made by the 2015 amendments to Regulation C, review the Executive Summary for the 2015 HMDA Rule, available at www.consumerfinance.gov/documents/5218/201510_cfpb_hmdaexecutive-summary.pdf. Further, Section 2 of the HMDA Small Entity Compliance Guide, available in Appendix B of this Guide, also provides an overview of these changes. 5 Home Mortgage Disclosure (Regulation C), 82 FR 43088 (Sept. 13, 2017) (2017 HMDA Rule). For more information on the specific changes made by the 2017 technical corrections and clarifications to Regulation C, review the Executive Summary, available at www.consumerfinance.gov/documents/5206/201707_cfpb_hmda-executivesummary.pdf. 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT! | II
and insured credit unions. On August 31, 2018, the CFPB issued a 2018 HMDA Rule to implement and clarify changes made by the 2018 Act. 6 On October 10, 2019, the Bureau issued a 2019 HMDA Rule to extend the temporary threshold for reporting data about open end lines of credit and implement and further clarify the partial exemptions created by the 2018 Act.7 On April 16, 2020, the Bureau issued a 2020 HMDA Rule to adjust the thresholds for reporting data about closed-end mortgage loans, effective July 1, 2020, and the thresholds for reporting data about open-end lines of credit, effective January 1, 2022.8 6 83 FR 45325 (Sept. 7, 2018). 7 84 FR 57946 (Oct. 29, 2019). 8 85 FR 28364 (May 12, 2020). III | 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT!
The Summary of Requirements reviews HMDA’s purposes and data collection, reporting, and disclosure requirements. It provides a high level summary of:
Feedback
The FFIEC welcomes suggestions for changes or additions that might make this Guide more helpful. Write to:
FFIEC
3501 Fairfax Drive
Room B-7081a
Arlington, VA 22226
Send an e-mail to: GettingItRightGuide@cfpb.gov Questions If, after reviewing the resources in this Guide, you have a question regarding a specific provision of the regulation, or have questions about how to file HMDA data, please email HMDAHELP@cfpb.gov with your specific question, identifying the filing year you are referencing, and, when applicable, the section(s) of the regulation related to your question. You can also submit the inquiry online using the form available at hmdahelp.consumerfinance.gov. The information you provide will permit the CFPB to process your request or inquiry. You may also contact your appropriate Federal HMDA reporting agency (see Appendix J to this Guide). V | 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT!
Where to Look: Regulation C’s institutional coverage criteria are found within the definition of “financial institution,” located at 12 CFR 1003.2(g) and the associated commentary, available in of this Guide. Summary of Requirements Institutional Coverage
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INSTITUTIONAL COVERAGE TESTS
DEPOSITORY FINANCIAL INSTITUTIONS
A bank, savings association, or credit union is a depository financial institution and subject to Regulation C if it meets ALL of the following:
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associated commentary; and Sections 4.1.1.2 and 5.7 of the HMDA Small Entity Compliance Guide available in Appendix B of this Guide.
4. Federally Related Test. The bank, savings association, or credit union:
a. Is federally insured; or b. Is federally regulated; or
c. Originated at least one home purchase loan or refinancing of a home purchase
loan that was secured by a first lien on a one- to-four-unit dwelling and also (i) was insured, guaranteed or supplemented by a Federal agency or (ii) was intended for sale to the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac). 12 CFR 1003.2(g)(1)(iv).
5. Loan-Volume Threshold. The bank, savings association, or credit union meets or
exceeds either the closed-end mortgage loan or the open-end line of credit loanvolume threshold in each of the two preceding calendar years. A bank, savings association, or credit union that originated at least 100 closed-end mortgage loans in each of the two preceding calendar years, or originated at least 200 open-end lines of credit in each of the two preceding calendar years meets or exceeds the loan-volume threshold.10 When the bank, savings association, or credit union determines whether it meets these loan-volume thresholds, it does not count transactions excluded by 12 CFR 1003.3(c)(1) through (10) and (13). 12 CFR 1003.2(g)(1)(v). Closed-end. 10 From January 1, 2018 through June 30, 2020, the threshold for closed-end mortgage loans was set at 25 closed-end mortgage loans in each of the two preceding calendar years. From January 1, 2018 through December 31, 2021, the threshold for open-end lines of credit was set at 500 open-end lines of credit in each of the two preceding calendar years. See Home Mortgage Disclosure (Regulation C), 85 FR 28364 (May 12, 2020). 3 | 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT!
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mortgage loans, open-end lines of credit, and these excluded transactions are discussed below in TRANSACTIONAL COVERAGE: WHAT IS REPORTED? When determining if it meets the loan-volume thresholds, a bank, savings association, or credit union only counts closed-end mortgage loans and open-end lines of credit that it originated. Only one institution is deemed to have originated a specific closedend mortgage loan or open-end line of credit under Regulation C, even if two or more institutions are involved in the origination process. Only the institution that is deemed to have originated the transaction under Regulation C counts it for purposes of the Loan-Volume Threshold. Comment 2(g)-5; see also Comments 4(a)-2 through -4. These requirements are discussed below in TRANSACTIONS INVOLVING MULTIPLE ENTITIES. Regulation C also includes a separate test to ensure that financial institutions that meet only the closed-end mortgage loan threshold are not required to report their open-end lines of credit, and that financial institutions that meet only the open-end line of credit threshold are not required to report their closed-end mortgage loans. 12 CFR 1003.3(c)(11) and (12).11 For more information, see HMDA Small Entity Compliance Guide, Section 4.1.2 available in Appendix B of this Guide. 11 If a financial institution is required under Regulation C to report only closed-end mortgage loans, it may optionally report open-end lines of credit that are excluded because the financial institution does not meet the transactional threshold for open-end lines of credit but that would otherwise be covered loans. Similarly, if a financial institution is required under Regulation C to report only open-end lines of credit, it may optionally report closed-end mortgage loans that are excluded because the financial institution does not meet the transactional threshold for closed-end mortgage loans but that would otherwise be covered loans. However, if it chooses to optionally report either closed-end mortgage loans or openend lines of credit, the financial institution must report all such transactions that would otherwise be covered loans for that calendar year. Comments 3(c)(11)-2 and 3(c)(12)-2. 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT! | 4
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NONDEPOSITORY FINANCIAL INSTITUTIONS
Under Regulation C, a for-profit mortgage-lending institution other than a bank, savings association, or credit union is a nondepository financial institution and subject to Regulation C if it meets BOTH of the following:
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When an institution determines whether it meets the loan-volume thresholds, it does not count transactions excluded by 12 CFR 1003.3(c)(1) through (10) and (13). 12 CFR 1003.2(g)(2)(ii). Closed-end mortgage loans, open-end lines of credit, and these excluded transactions are discussed below in TRANSACTIONAL COVERAGE: WHAT IS REPORTED?. When determining if it meets the loan-volume thresholds, an institution only counts closed-end mortgage loans and open-end lines of credit that it originated. Only one institution is deemed to have originated a specific closed-end mortgage loan or openend line of credit under Regulation C, even if two or more institutions are involved in the origination process. Only the institution that is deemed to have originated the transaction under Regulation C counts it for purposes of the loan volume threshold. Comment 2(g)-5; see also Comments 4(a)-2 through -4. These requirements are discussed below in TRANSACTIONS INVOLVING MULTIPLE ENTITIES. 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT! | 6
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Regulation C also includes a separate test to ensure that financial institutions that meet only the 100 closed-end mortgage loan threshold are not required to report their open-end lines of credit, and that financial institutions that meet only the 500 open-end line of credit threshold are not required to report their closed-end mortgage loans. 12 CFR 1003.3(c)(11) and (12).13 For more information, see the HMDA Small Entity Compliance Guide, Section 4.1.2 available in Appendix B of this Guide. EXEMPTIONS BASED ON STATE LAW Regulation C provides that financial institutions may apply for an exemption from coverage. Specifically, the CFPB may exempt a State-chartered or State-licensed financial institution if the CFPB determines that the financial institution is subject to a State disclosure law that contains requirements substantially similar to those imposed by Regulation C and adequate enforcement provisions. Any State-licensed or Statechartered financial institution or association of such institutions may apply to the CFPB 13 If a financial institution is required under Regulation C to report only closed-end mortgage loans, it may optionally report open-end lines of credit that are excluded because the financial institution does not meet the transactional threshold for open-end lines of credit but that would otherwise be covered loans. Similarly, if a financial institution is required under Regulation C to report only open-end lines of credit, it may optionally report closed-end mortgage loans that are excluded because the financial institution does not meet the transactional threshold for closed-end mortgage loans but that would otherwise be covered loans. However, if it chooses to optionally report either closed-end mortgage loans or openend lines of credit, the financial institution must report all such transactions that would otherwise be covered loans for that calendar year. Comments 3(c)(11)-2 and 3(c)(12)-2. 7 | 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT!
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for an exemption. An exempt institution shall submit the data required by State law to its State supervisory agency. 12 CFR 1003.3(a). A financial institution that loses its exemption must comply with Regulation C beginning with the calendar year following the year for which it last reported data under the State disclosure law. 12 CFR 1003.3(b). MERGERS AND ACQUISITIONS After a merger or acquisition, the surviving or newly formed institution is subject to Regulation C if it satisfies the coverage criteria for either a depository financial institution or a nondepository financial institution. See INSTITUTIONAL COVERAGE TESTS, above, and Section 3 of the HMDA Small Entity Compliance Guide available in
Appendix B of this Guide.
Annual reporting responsibility for the calendar year after a merger or acquisition. When determining whether the surviving or newly formed institution is covered for the calendar year after a merger or acquisition, the surviving or newly formed institution must consider the combined assets, locations, and lending activities of the surviving or newly formed entity and the merged or acquired entities or acquired branches. Comment 2(g)-3. Annual reporting responsibility for the calendar year of a merger or acquisition. The following discusses the applicability of Regulation C during the calendar year of a merger or acquisition:
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optional for transactions taking place in the remainder of the calendar year of the acquisition.
7. If two or more institutions that are subject to Regulation C merge and the
surviving or newly formed institution is also subject to Regulation C, data collection is required for the entire calendar year of the merger. The surviving or newly formed financial institution files either a consolidated submission or separate submissions for that calendar year.
8. When one institution subject to Regulation C acquires a branch office of another
covered institution, data collection is required for the entire calendar year of the merger. Data for the acquired branch office may be submitted by either financial institution. Comment 2(g)-4. CHANGES TO APPROPRIATE FEDERAL HMDA REPORTING AGENCY OR TIN Under Regulation C, if the appropriate Federal HMDA reporting agency for a financial institution changes, the financial institution must identify its new appropriate Federal HMDA reporting agency in its annual submission for the year of the change. For example, if a financial institution’s appropriate Federal HMDA reporting agency changes in February 2022, it must identify its new appropriate Federal HMDA reporting agency beginning with the annual submission of its 2022 data by March 1, 2023. If a financial institution obtains a new Tax Identification Number (TIN), it should provide the new number in its subsequent data submission. For example, if two financial institutions that previously reported HMDA data merge and the surviving financial institution retained its Legal Entity Identifier (LEI) but obtained a new TIN, then the surviving financial institution should report the new TIN with its next HMDA data submission. Comment 5(a)-5. 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT! | 10
Where to Look: Regulation C’s transactional coverage criteria is generally found within the definition of “Covered Loan,” located at 12 CFR 1003.2(e) and the associated commentary, available in
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covered loan, and the financial institution is not required to report the transaction. If the loan or line of credit is a closed-end mortgage loan or an open-end line of credit and is not an excluded transaction, the financial institution may be required to report the transaction. See REPORTABLE ACTIVITY, below, and Section 4.2 of the HMDA Small Entity Compliance Guide, available in Appendix B of this Guide. A closed-end mortgage loan is:
1. An extension of credit (See EXTENSION OF CREDIT, below);
2. Secured by a lien on a dwelling (See SECURED BY A LIEN ON A DWELLING, below);
and
3. Not an open-end line of credit. 12 CFR 1003.2(d).
An open-end line of credit is:
1. An extension of credit (See EXTENSION OF CREDIT, below);
2. Secured by a lien on a dwelling (See SECURED BY A LIEN ON A DWELLING, below);
and
3. An open-end credit plan for which:
a. The lender reasonably contemplates repeated transactions; b. The lender may impose a finance charge from time-to-time on an outstanding unpaid balance; and
c. The amount of credit that may be extended to the borrower during the term
of the plan (up to any limit set by the lender) is generally made available to the extent that any outstanding balance is repaid. 12 CFR 1003.2(o); 12 CFR 1026.2(a)(20). 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT! | 12
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4. Financial institutions may rely on Regulation Z, 12 CFR 1026.2(a)(20), and its
official commentary when determining whether a transaction is extended under a plan for which the lender reasonably contemplates repeated transactions, the lender may impose a finance charge from time-to-time on an outstanding unpaid balance, and the amount of credit that may be extended to the borrower during the term of the plan is generally made available to the extent that any outstanding balance is repaid. A business-purpose transaction that is exempt from Regulation Z but is otherwise open-end credit under Regulation Z, 12 CFR 1026.2(a)(20), would be an open-end line of credit under Regulation C if it is an extension of credit secured by a lien on a dwelling and is not an excluded transaction. Comment 2(o)-1. Extension of credit. A closed-end loan or open-end line of credit is not a closed-end mortgage loan or an open-end line of credit under Regulation C unless it involves an extension of credit. Individual draws on an open-end line of credit are not separate extensions of credit. Comment 2(o)-2. Under Regulation C, an “extension of credit” generally requires a new debt obligation. Comment 2(d)-2. Thus, for example, a loan modification where the existing debt obligation is not satisfied and replaced is not generally a covered loan (i.e., closedend mortgage loan or open-end line of credit) under Regulation C. Except as described below, if a transaction modifies, renews, extends, or amends the terms of an existing debt obligation, but the existing debt obligation is not satisfied and replaced, the transaction is not a covered loan. It is important to note that Regulation C defines the phrase “extension of credit” differently than Regulation B, 12 CFR Part
1002. Comment 2(d)-2 and 2(o)-2.
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Secured by a lien on a dwelling. A loan is not a closed-end mortgage loan and a line of credit is not an open-end line of credit unless it is secured by a lien on a dwelling. A dwelling is a residential structure. There is no requirement that the structure be attached to real property or that it be the applicant’s or borrower’s residence. Examples of dwellings include:
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assume a landlord uses a covered loan to improve five or more dwellings, each with one individual dwelling unit, located in different parts of a town, and the loan is secured by those properties. The covered loan is not secured by a multifamily dwelling as defined by § 1003.2(n). Comment 2(n)-3. The following are not dwellings:
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allocated for each use. It may select the standard on a case-by-case basis. Comments 2(f)-4 and -5. Regulation C does not apply to transactions that are specifically excluded from coverage. 12 CFR 1003.3(c). Therefore, an excluded transaction is not a covered loan. Regulation C retains and clarifies existing categories of transactions that are excluded from coverage. It also expands the existing exclusion for agricultural loans, and adds new categories of transactions that are excluded from coverage. Except as noted below, effective January 1, 2018, the following are excluded transactions:
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of credit is deemed to be primarily for a business, commercial, or organizational purpose under Regulation Z, 12 CFR 1026.3(a), and its official commentary, then the loan or line of credit also is deemed to be primarily for a business or commercial purpose. Comment 3(c)(10)-2. For more information and examples of business-purpose or commercial-purpose transactions that are and are not covered loans, see Comments 3(c)(10)-3 and -4.
11. A closed-end mortgage loan if the financial institution originated fewer than 100
closed-end mortgage loans in either of the two preceding calendar years.14 12 CFR 1003.3(c)(11). A financial institution is not required to collect, record, or report closed-end mortgage loans if it originated fewer than 100 of them in either of the two preceding calendar years. However, the financial institution may still be required to collect and report information regarding open-end lines of credit, depending on the number of open-end lines of credit it originated in the preceding two calendar years. Comment 3(c)(11)-1. For more information on how to determine if a financial institution “originated” a particular loan when multiple entities are involved in the transaction, see Comments 4(a)-2 through -
4. See also HMDA Small Entity Compliance Guide, Section 4.2.3, available in
Appendix B of this Guide.
A financial institution may report applications for, originations of, and purchases of closed-end mortgage loans that are excluded transactions under 12 CFR 1003.3(c)(11). However a financial institution that chooses to report such excluded applications, originations, and purchases must report all such applications it received for closed-end mortgage loans, all closed-end mortgage loans it originates, and all closed-end mortgage loans it purchases that would 14 From January 1, 2018 through June 30, 2020, the applicable threshold was set at 25 closedend mortgage loans in each of the two preceding calendar years. During that time period, a financial institution was not required to collect, record, or report closed-end mortgage loans if it originated fewer than 25 closed-end mortgage loans in either of the two preceding calendar years. 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT! | 20
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otherwise be covered loans for a given calendar year. 12 CFR 1003.3(c)(11); Comment 3(c)(11)-2. Regulation B permits a financial institution to collect information regarding the ethnicity, race, and sex of an applicant for a closedend mortgage loan that is an excluded transaction under 12 CFR 1003.3(c)(11), if the financial institution submits HMDA data concerning such closed-end mortgage loans and applications or if it submitted such HMDA data for any of the preceding five calendar years.15
12. An open-end line of credit if the financial institution originated fewer than 200
open-end lines of credit in either of the two preceding calendar years. 16 12 CFR 1003.3(c)(12). A financial institution is not required to collect, record, or report open-end lines of credit if it originated fewer than 200 open-end lines of credit in either of the two preceding calendar years. However, a financial institution may still be required to collect and report information regarding closed-end mortgage loans, depending on the number of closed-end mortgage loans it originated in the preceding two calendar years. Comment 3(c)(12)-1. 15 Amendments to Equal Credit Opportunity Act (Regulation B) Ethnicity and Race Information Collection, 82 FR 45680 (Oct. 2, 2017) (October 2017 Regulation B Amendments). This final rule amends Regulation B to allow creditors flexibility in complying with Regulation B to facilitate compliance with Regulation C and transition to the 2016 Uniform Residential Loan Application (URLA). 16 From January 1, 2018 through December 31, 2021, the applicable threshold was 500 openend lines of credit in each of the two preceding calendar years. During that time period, a financial institution was not required to collect, record, or report open-end lines of credit if it originated fewer than 500 open-end lines of credit in either of the two preceding calendar years. 21 | 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT!
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For more information on how to determine if a financial institution “originated” a particular open-end line of credit when multiple entities are involved in the transaction, see Comments 4(a)-2 through -4. See also HMDA Small Entity Compliance Guide,
Section 4.2.3, available in Appendix B of this Guide.
A transaction that provided (or, in the case of an application, proposed to provide) new funds to the borrower in advance of being consolidated in a New York CEMA classified as a supplemental mortgage under New York Tax Law section 255. However, the transaction is excluded only if final action on the consolidation was taken in the same calendar year as the final action on the new funds transaction. 12 CFR 1003.3(c)(13). Additionally, the transaction is excluded only if, at the time that it originated the transaction providing the new funds, the financial institution intended to consolidate the loan into a New York CEMA. This exclusion does not apply to similar preliminary transactions that are consolidated pursuant to laws other than New York Tax Law section 255. Such preliminary transactions under other laws must be reported if they are covered loans and are not covered by another exclusion. Comment 3(c)(13)-1. New funds provided in advance of being consolidated into a New York CEMA classified as a supplemental mortgage under New York Tax Law
section 255 are reported only insofar as they form part of the total amount of the
reported New York CEMA. They are not reported as a separate amount. If a New York CEMA that consolidates an excluded preliminary transaction is carried out in a transaction involving an assumption, the financial institution reports the New York CEMA and does not report the preliminary transaction separately. Comment 3(c)(13)- 1. 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT! | 22
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Coverage
REPORTABLE ACTIVITY
Once a financial institution has determined whether a transaction involves a covered loan, it must determine whether it has engaged in activity that obligates it to report information about the transaction. Generally, a financial institution is required to report information for actions taken on applications (as that term is defined below) for covered loans, originations of covered loans, and purchases of covered loans. If a financial institution receives an application and that application results in the financial institution originating a covered loan, the financial institution reports the origination of the covered loan, and does not separately report the application. For more information on when to report information regarding applications and covered loans, see APPLICATIONS, PREAPPROVAL REQUESTS, and ORIGINATIONS AND PURCHASES OF COVERED LOANS, below, and Sections 4.2.1 and 4.2.2 of the HMDA Small Entity Compliance Guide, available in Appendix B of this Guide. There are special rules that apply if multiple entities are involved in the transaction. These special rules are discussed in TRANSACTION INVOLVING MULTIPLE ENTITIES, below, and Section 4.2.3 of the HMDA Small Entity Compliance Guide, available in Appendix B of this Guide. Certain financial institutions may be eligible for partial exemptions for certain transactions. If a financial institution is eligible for a partial exemption, then the financial institution is not required to collect, record, or report certain data points for the transaction that qualifies for the partial exemption. Partial exemptions are discussed in PARTIAL EXEMPTIONS below and in Section 4.3 of the HMDA Small Entity Compliance Guide, available in Appendix B of this Guide. 23 | 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT!
Summary of
Requirements
Institutional
Coverage
Transactional
Coverage
Applications
For purposes of Regulation C, an application is:
a. an oral or written request b. for a covered loan
c. that is made in accordance with procedures the financial institution uses for the
type of credit requested. 12 CFR 1003.2(b)(1).
PREAPPROVAL REQUESTS
Under Regulation C, a request for a preapproval may be treated differently than a request for a prequalification for certain types of loans. The determination of whether a request is a prequalification request (which is not an application) or a preapproval request (which might be an application) is based on Regulation C, not on the labels that a financial institution uses or interpretations of other regulations, such as Regulation B. A preapproval request is an application under Regulation C if the request is:
Summary of
Requirements
Institutional
Coverage
Transactional
Coverage
1. Conducts a comprehensive analysis of the applicant’s creditworthiness
(including income verification), resources, and other matters typically reviewed as part of the financial institution’s normal credit evaluation program; and then
2. Issues a written commitment that: (a) is for a home purchase loan; (b) is valid
for a designated period of time and up to a specified amount; and (c) is subject only to specifically permitted conditions. 12 CFR 1003.2(b)(2); Comment 2(b)-3. The written commitment issued as part of the preapproval program can be subject to only the following types of conditions:
1. Conditions that require the identification of a suitable property;
2. Conditions that require that no material change occur regarding the applicant’s
financial condition or creditworthiness prior to closing; and
3. Limited conditions that (a) are not related to the applicant’s financial condition or
creditworthiness and (b) the financial institution ordinarily attaches to a traditional home mortgage application. Examples of conditions ordinarily attached to a traditional home mortgage application include requiring an acceptable title insurance binder or a certificate indicating clear termite inspection and, if the applicant plans to use the proceeds from the sale of the applicant’s present home to purchase a new home, a settlement statement showing adequate proceeds from the sale of the present home. 12 CFR 1003.2(b)(2); Comment 2(b)-3. A program that a financial institution describes as a “preapproval program” but that does not satisfy the Regulation C definition is not a preapproval program for purposes of the regulation. Comment 2(b)-3. If a financial institution does not regularly use procedures to consider requests but instead considers requests on an ad hoc basis, the financial institution is not required to treat the ad hoc requests as having been reviewed under a preapproval program. However, a financial institution should be generally consistent in following uniform procedures for considering such ad hoc requests. Comment 2(b)-3. 25 | 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT!
Summary of
Requirements
Institutional
Coverage
Transactional
Coverage
Under Regulation C, a financial institution must collect, record, and report data regarding an application it receives if: (1) the application did not result in the financial institution originating a covered loan; and (2) the financial institution took action on the application or the applicant withdrew the application while the financial institution was reviewing it. For example, a financial institution reports information regarding an application that it denied, that it approved but the applicant did not accept, or that it closed for incompleteness. 12 CFR 1003.4(a) and 1003.5(a); Comment 4(a)-1. If the application results in the financial institution originating a covered loan, the financial institution reports the covered loan, not the application itself. For more information on reporting applications when multiple entities are involved, see TRANSACTIONS INVOLVING MULTIPLE ENTITIES, below, and in Section 4.2.3 of the HMDA Small Entity Compliance Guide, available in Appendix B of this Guide. Although requests under preapproval programs are applications, a financial institution reports data regarding a request under a preapproval program only if the preapproval request is denied or approved but not accepted. A financial institution will also report a request under a preapproval program that results in the financial institution originating a home purchase loan, but it will be reported as an originated covered loan. Comment 4(a)-1.ii. A financial institution reports the data for an application, including a reportable preapproval request, on its HMDA Loan/Application Register (LAR) for the calendar year during which it takes action even if the financial institution received the application in a previous calendar year. Comment 4(a)-1.iv. ORIGINATIONS AND PURCHASES OF COVERED LOANS A financial institution must collect, record, and report information regarding originations and purchases of covered loans. For more information on when a financial institution reports the origination or purchase of a covered loan when multiple 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT! | 26
Summary of
Requirements
Institutional
Coverage
Transactional
Coverage
entities are involved, see TRANSACTIONS INVOLVING MULTIPLE ENTITIES, below, and in
Section 4.2.3 of the HMDA Small Entity Compliance Guide, available in Appendix B
of this Guide. A purchase includes a repurchase of a covered loan, regardless of whether the financial institution chose to repurchase the covered loan or was required to repurchase it because of a contractual obligation and regardless of whether the repurchase occurred within the same calendar year that the covered loan was originated or in a different calendar year. Comment 4(a)-5. A purchase does not include a temporary transfer of a covered loan to an interim funder or warehouse creditor as part of an interim funding agreement under which the financial institution that originated the covered loan is obligated to repurchase it for sale to a subsequent investor. Such funding agreements are often referred to as “repurchase agreements” and are sometimes used as the functional equivalents of warehouse lines of credit. Comment 4(a)-5. TRANSACTIONS INVOLVING MULTIPLE ENTITIES Only one financial institution reports the origination of a covered loan. If more than one institution is involved in the origination of a covered loan, the institution that makes the credit decision approving the application before loan closing or account opening is responsible for reporting the origination of the covered loan. It is not relevant whether the loan closed in the reporting financial institution’s name. If more than one institution approved an application prior to loan closing or account opening and one of those institutions purchased the covered loan after closing or account opening, the institution that purchased the covered loan after closing or account opening is responsible for reporting the origination of the covered loan. Comment 4(a)-2.i. If a financial institution reports a covered loan as an origination, it reports all of the information required to be reported for the origination of a covered loan, even if the covered loan was not initially payable to the financial institution that is reporting the covered loan as an origination. Comment 4(a)-2.i. 27 | 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT!
Summary of
Requirements
Institutional
Coverage
Transactional
Coverage
In the case of an application for a covered loan that did not result in an origination, a financial institution reports the action it took on that application if it made a credit decision on the application or was reviewing the application when the application was withdrawn or closed for incompleteness. For example, the financial institution is still required to report the application if the financial institution denied the application or if the financial institution approved the application but the applicant did not accept the loan. The financial institution is also required to report the application if the financial institution was reviewing the application when it was withdrawn or the file was closed for incompleteness. Comment 4(a)-2.ii. If a financial institution makes a credit decision on a covered loan or application through the actions of an agent, the financial institution reports the covered loan or application. State law determines whether one party is the agent of another party. Comment 4(a)-4. The following examples illustrate when a financial institution reports certain transactions related to covered loans involving multiple entities. EXAMPLES
Summary of
Requirements
Institutional
Coverage
Transactional
Coverage
Summary of
Requirements
Institutional
Coverage
Transactional
Coverage
denies the application. Aspen Bank makes a credit decision approving the application. The applicant does not accept the loan from Elm Bank. The applicant accepts the loan from Aspen Bank and credit is extended. Aspen Bank reports the loan as an originated covered loan. Pine Bank reports the application as denied. Elm Bank reports the application as approved but not accepted. Ficus Bank does not report the application. PARTIAL EXEMPTIONS The 2018 Act created partial exemptions from some of HMDA’s requirements for certain financial institutions. Only certain covered loans and applications are covered under each of the two partial exemptions. The partial exemptions were effective May 24, 2018, and apply to the collection, recording, and reporting of HMDA data on or after that date. In order to be eligible for a partial exemption, a financial institution must be an:
1. “Insured credit union,” as defined in section 101 of the Federal Credit Union Act,
12 U.S.C. 1752; or
2. “Insured depository institution,” as defined in section 3 of the Federal Deposit
Insurance Act, 12 U.S.C. 1813.
Additionally, an insured depository institution must not have received less than satisfactory ratings in its most recent Community Reinvestment Act (CRA) performance evaluations to be eligible for a partial exemption. More specifically, an insured depository institution must not have received either of the following:
1. A rating of “needs to improve record of meeting community credit needs” during
each of its two most recent examinations under section 807(b)(2) of the CRA; or 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT! | 30
Summary of
Requirements
Institutional
Coverage
Transactional
Coverage
Summary of
Requirements
Institutional
Coverage
Transactional
Coverage
Bank’s closed-end mortgage loan transactions, but a partial exemption does not apply to Ficus Bank’s open-end line of credit transactions. Additionally, because Ficus Bank originated at least 500 open-end lines of credit in both 2020 and 2021, Ficus Bank cannot exclude open-end lines of credit from its reportable transactions in 2022 (i.e., they are not excluded transactions). The 2018 Act created partial exemptions, not complete exclusions. Therefore, if a covered loan or application is covered by a partial exemption, the financial institution is required to collect, record, and report 22 specific data points specified in 12 CFR 1003.4(a)(1) through (38), but is exempt from collecting, recording, and reporting 26 other specific data points for that transaction. See Appendix F for a list of data points that do not need to be collected, recorded, or reported if the transaction is covered by a partial exemption and a list of data points that must be collected, recorded, and reported if the transaction is covered by a partial exemption. At its option, an eligible financial institution may voluntarily report any or all of these 26 data points for a covered loan or application covered by a partial exemption. APPLICATION OF PARTIAL EXEMPTIONS AFTER A MERGER OR ACQUISITION After a merger or acquisition, the surviving or newly formed institution falls below the loan threshold described in § 1003.3(d)(2) or (3) if the combined lending activity of the surviving or newly formed institution and the merged or acquired institutions or acquired branches falls below the loan threshold described in § 1003.3(d)(2) or (3). After a merger or acquisition, the surviving or newly formed institution is ineligible for the partial exemptions if either the surviving or newly formed institution or any of the merged or acquired institutions received a rating of “needs to improve record of meeting community credit needs” during each of its two most recent CRA examinations or a rating of “substantial noncompliance in meeting community credit needs” on its most recent CRA examination. Comments 3(d)-1 through -3. 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT! | 32
Where to Look: Regulation C’s reportable data criteria are found in 12 CFR 1003.4 and the associated commentary, available in
Summary of
Requirements
Institutional
Coverage
Transactional
Coverage
Compilation of
Reportable Data
Recording, Reporting, and Disclosure
For more information on the partial exemptions, see Section 4.3 of the HMDA Small Entity Compliance Guide, available in Appendix B of this Guide. Compilation of Reportable Data: What is Reported?
Appendix A of this Guide contains a summary of the data points required to be
collected, recorded, and reported beginning in 2018, and where to find specific guidance in the regulation and commentary on what should be included for each data point.17 Each data point may correspond to more than one field reported on the HMDA LAR. Unless a partial exemption applies, there are 48 data points described in Regulation C and 110 fields reported on the HMDA LAR. One example of a data point that corresponds to multiple fields is the ethnicity data point. Each applicant and co-applicant may enter up to five ethnicities on their application. See 12 CFR1003.4(a)(10)(i); Appendix B to Part 1003. Additional information on the fields and codes used in preparing the HMDA LAR are provided in the Filing Instructions Guide, available at ffiec.cfpb.gov.
Appendix H and I of this Guide. You may also want to
review Section 5 of the HMDA Small Entity Compliance Guide available in Appendix B of this Guide. 17 Additionally, Section 5 of the CFPB’s HMDA Small Entity Compliance Guide, available in
Appendix B of this Guide, contains a plain language guide for the reportable data, including
examples from the commentary.
33 | 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT!
Summary of
Requirements
Institutional
Coverage
Transactional
Coverage
Compilation of
Reportable Data
Recording, Reporting, and Disclosure
APPLICANT INFORMATION
A financial institution must report information about ethnicity, race, and sex, as well as age, for applicants who are natural persons. Appendix B to Regulation C provides instructions on how to collect ethnicity, race, and sex information, and is available in
Appendix H of this Guide. 18
18 Section 5.1 of the CFPB’s HMDA Small Entity Compliance Guide, available in Appendix B of this Guide, contains a plain language guide for collecting and reporting application information. Further, Appendix C of this Guide contains the CFPB’s chart on Collecting Ethnicity, Race, and Sex. 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT! | 34
Summary of
Requirements
Institutional
Coverage
Transactional
Coverage
Compilation of
Reportable Data
Where to Look: Regulation C’s Recording, Reporting, and Disclosure criteria are found within 12 CFR 1003.5 and the associated commentary, available in
Recording,
Reporting, and
Disclosure
Summary of
Requirements
Institutional
Coverage
Transactional
Coverage
Compilation of
Reportable Data
Recording,
Reporting, and
Disclosure
REPORTING
In addition to the required data discussed in 12 CFR 1003.4 and Section 5 of the HMDA Small Entity Compliance guide, available in Appendix B of this Guide, effective January 1, 2019, a financial institution must include the following when it submits its HMDA data:
Summary of
Requirements
Institutional
Coverage
Transactional
Coverage
Compilation of
Reportable Data
Recording,
Reporting, and
Disclosure
A financial institution that is a subsidiary of a bank or savings association must complete its own HMDA LAR and submit it, directly or through its parent, to the appropriate Federal HMDA reporting agency for the subsidiary’s parent. 12 CFR 1003.5(a)(2). A financial institution is a subsidiary of a bank or savings association (for purposes of reporting HMDA data to the same agency as the parent) if the bank or savings association holds or controls an ownership interest in the financial institution that is greater than 50 percent. Comment 5(a)-3. ANNUAL REPORTING Regulation C maintains the annual reporting requirement, but requires financial institutions to submit data electronically in accordance with the procedures published by the CFPB. 12 CFR 1003.5(a)(5). This Guide does not provide detailed information about the HMDA submission process, or file, data, and edit specifications. Information about those topics can be found in the FFIEC’s Help for Filers section, available at ffiec.cfpb.gov and How to File section, available at www.ffiec.gov/hmda/. Under Regulation C, a financial institution must submit its annual HMDA LAR in electronic format to its appropriate Federal HMDA reporting agency by March 1 of the year following the calendar year for which the data are collected. 12 CFR 1003.5(a)(1)(i). An individual who is an authorized representative of the financial institution and who has knowledge regarding the submitted data must certify its accuracy and completeness. 12 CFR 1003.5(a)(1)(i). A financial institution must retain a copy of its submitted annual HMDA LAR for at least three years. 12 CFR 1003.5(a)(1)(i). Financial institutions may retain their annual HMDA LARs in either paper or electronic form. Comment 5(a)-4. For more information on reporting under Regulation C or on the electronic submission of data, please see ffiec.cfpb.gov. 37 | 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT!
Summary of
Requirements
Institutional
Coverage
Transactional
Coverage
Compilation of
Reportable Data
Recording,
Reporting, and
Disclosure
QUARTERLY REPORTING
Effective January 1, 2020, Regulation C requires some financial institutions to report data on a quarterly basis as well as on an annual basis. A financial institution’s covered loans and applications, excluding purchased covered loans, in calendar year 2021 will determine whether the quarterly reporting requirement will apply to the financial institution in 2022. The quarterly reporting requirement applies to a financial institution that reported at least 60,000 originated covered loans and applications (combined) for the preceding calendar year. The financial institution does not count purchased covered loans when determining whether the quarterly reporting requirement applies. If quarterly reporting is required, the financial institution must report all data required to be recorded for the calendar quarter within 60 calendar days after the end of the calendar quarter. The quarterly reporting requirement does not apply, however, to the fourth quarter of the year. A financial institution that is subject to the quarterly reporting requirement reports its fourth quarter data as part of its annual submission. In its annual submission, a quarterly reporter will resubmit the data previously submitted for the first three calendar quarters of the year, including any corrections to the data, as well as its fourth quarter data. 12 CFR 1003.5(a)(1)(ii). This Guide does not provide detailed information about the quarterly or annual HMDA submission process, or file, data, and edit specifications. The Filing Instructions Guide as well as a Supplemental Guide for Quarterly Filers can be found in the FFIEC’s Help for Filers section, available at ffiec.cfpb.gov and How to File section, available at www.ffiec.gov/hmda/. 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT! | 38
Summary of
Requirements
Institutional
Coverage
Transactional
Coverage
Compilation of
Reportable Data
Recording,
Reporting, and
Disclosure
DETERMINING QUARTERLY REPORTING COVERAGE
In the calendar year of a merger, Regulation C requires a surviving or newly formed financial institution to report quarterly, beginning with the first quarterly submission due date after the date of the merger, in certain circumstances. Specifically, the financial institution must report, if when added, together, the surviving or newly formed financial institution and all financial institutions that merged reported at least 60,000 originated covered loans and applications for the preceding calendar year. In the calendar year of an acquisition, the surviving financial institution is required to report quarterly, beginning with the first quarterly submission due date after the date of the acquisition, in certain circumstances. Specifically, the financial institution must report, if when added together the surviving financial institution and acquired financial institution(s) or branch office(s) reported at least 60,000 originated covered loans and applications for the preceding calendar year. If a financial institution acquires one or more branch offices of another financial institution but does not acquire the financial institution, it is required to count only the originated covered loans and applications for the branch offices that it acquired. Comment 5(a)-1.ii. In the calendar year following a merger or acquisition, the surviving or newly formed financial institution is required to comply with the quarterly reporting requirements if a combined total of at least 60,000 originated covered loans and applications is reported for the preceding calendar year by or for the surviving or newly formed financial institution and each financial institution or branch office that merged or was acquired. Comment 5(a)-1.iii. 39 | 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT!
Summary of
Requirements
Institutional
Coverage
Transactional
Coverage
Compilation of
Reportable Data
Recording,
Reporting, and
Disclosure
DISCLOSURE OF DATA
DISCLOSURE STATEMENT
Under Regulation C, the FFIEC shall provide a notice to the financial institution that the financial institution’s disclosure statement (aggregated data derived from loanlevel data submitted for the prior calendar year) is available. 12 CFR 1003.5(b)(1). No later than three business days (any calendar day other than a Saturday, Sunday, or legal public holiday) after receiving notice from the FFIEC, the financial institution must make available to the public, upon request, a written notice that clearly conveys that the financial institution’s disclosure statement may be obtained on the CFPB’s website at www.consumerfinance.gov/hmda. 12 CFR 1003.5(b)(2); Comment 5(b)-
Summary of
Requirements
Institutional
Coverage
Transactional
Coverage
Compilation of
Reportable Data
Recording,
Reporting, and
Disclosure
MODIFIED HMDA LAR19
Upon request from a member of the public, a financial institution must provide a written notice regarding the availability of its modified HMDA LAR (the financial institution’s HMDA LAR, as modified by the CFPB to protect applicant and borrower privacy). The written notice must clearly convey that the financial institution’s HMDA LAR, as modified by the CFPB to protect borrower and applicant privacy, may be obtained on the CFPB’s website at www.consumerfinance.gov/hmda. 12 CFR 1003.5(c). A financial institution’s HMDA LAR is also available at ffiec.cfpb.gov. A financial institution may, but is not required to, use the sample notice to satisfy Regulation C’s modified HMDA LAR requirement. Comment 5(c)-2. A copy of the sample notice is included as Attachment C of the HMDA Small Entity Compliance Guide, available in Appendix B of this Guide. A financial institution may, but is not required to, use the same notice for purposes of this disclosure requirement and the disclosure statement requirement discussed in the DISCLOSURE STATEMENT section above. See also Section 6.3.1 of the HMDA Small Entity Compliance Guide, available in Appendix B of this Guide. The notice may be made available in paper or electronic form. Comment 5(c)-1. The notice must be made available in the calendar year following the calendar year for which the financial institution collected data. The notice must be made available for three years. 12 CFR 1003.5(d)(1). For example, for data that it was required to 19 On December 21, 2018, the CFPB issued final policy guidance describing modifications the CFPB intended to apply to the HMDA data, including modifications to protect consumers’ privacy, before the data were made available to the public beginning in 2019. The policy guidance is available at www.consumerfinance.gov/policy-compliance/rulemaking/finalrules/regulation-c-home-mortgage-disclosure-act/ 41 | 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT!
Summary of
Requirements
Institutional
Coverage
Transactional
Coverage
Compilation of
Reportable Data
Recording,
Reporting, and
Disclosure
collect in 2018 a financial institution must make available a notice that its modified HMDA 2018 LAR is available through calendar year 2021. At its discretion, a financial institution may also provide its HMDA LAR, as modified by the CFPB, and impose a reasonable fee for any costs incurred to reproduce or provide the data. 12 CFR 1003.5(d)(2). Even if it decides to provide the modified HMDA LAR, a financial institution must comply with the notice requirement. POSTED NOTICES A financial institution must post, in the lobby of its home office and each branch office physically located in an MSA or Metropolitan Division (MD), a general notice about the availability of its HMDA data on the CFPB’s website. 12 CFR 1003.5(e). A financial institution may, but is not required to, use the sample notice to satisfy this requirement. A copy of the sample posted notice is available in Appendix K of this Guide and as Attachment C of the HMDA Small Entity Compliance Guide, available in
Appendix B of this Guide. In any case, the notice must clearly convey that the
financial institution’s HMDA data are available on the CFPB’s website at www.consumerfinance.gov/hmda. 20 Comment 5(e)-1. AGGREGATED DATA The FFIEC will use the annual data submitted pursuant to Regulation C to make available aggregated data for each MSA and MD, showing lending patterns by property location, age of housing stock, and income level, sex, ethnicity, and race. 12 CFR 1003.5(f). 20 HMDA data submitted by financial institutions are also available at ffiec.cfpb.gov. 2022 EDITION A GUIDE TO HMDA REPORTING: GETTING IT RIGHT! | 42
Appendix
Intro
A: Overview of Data
Requirements Chart
B: HMDA Small Entity
Compliance Guide
C: Instructions on
Collection of Data on
Ethnicity, Race, and Sex
D: Institutional Coverage
Chart
E: Transactional
Coverage Chart
F: Partial Exemptions
Charts
G: Data Fields and Data
Points Chart
H: Regulation C
I: Official Interpretations to Regulation C
J: Federal HMDA
Reporting Agencies
K: HMDA Poster
APPENDIX
The following appendices provide additional HMDA materials that you may find useful, including certain implementation resources provided by the CFPB that are also available at www.consumerfinance.gov/policy-compliance/guidance/hmdaimplementation/. Financial institutions may wish to consult with their Federal supervisory agencies regarding additional compliance resources that the agencies may offer. Agency websites and contact information can be found below in Appendix J.
Appendix
Intro
A: Overview of Data
Requirements Chart
B: HMDA Small Entity
Compliance Guide
C: Instructions on
Collection of Data on
Ethnicity, Race, and Sex
D: Institutional Coverage
Chart
E: Transactional
Coverage Chart
F: Partial Exemptions
Charts
G: Data Fields and Data
Points Chart
H: Regulation C
I: Official Interpretations to Regulation C
J: Federal HMDA
Reporting Agencies
K: HMDA Poster
APPENDIX A: Overview of Data Requirements Chart
This following chart developed by the CFPB is intended to be used as a reference tool for data points required to be collected, recorded, and reported under Regulation C, as amended by the 2015 HMDA Rule, 2017 HMDA Rule, and the 2018 Act that was further implemented by the 2019 HMDA Rule. Relevant regulation and commentary sections are provided for ease of reference. The chart also incorporates the information found in Section 4.2.2 of the 2022 FIG for ease of reference. Finally, the chart provides when to report “not applicable,” and the code used for reporting “not applicable” from Section 4 of the 2022 FIG for ease of reference. This chart does not provide data fields or enumerations used in preparing the HMDA LAR. For more information on preparing the HMDA LAR, please see ffiec.cfpb.gov.
b d
a
Effective January 1, 2022
Reportable HMDA Data: A Regulatory and Reporting Overview Reference Chart for HMDA Data Collected in 2022 This chart is intended to be used as a reference tool for data points required to be collected, recorded, and reported under Regulation C, as amended by the HMDA Rules issued on October 15, 2015, on August 24, 2017, on October 10, 2019, and on April 16, 2020. a Relevant regulation and commentary sections are provided for ease of reference. The chart also incorporates the information found in Section 4.2.2 of the 2022 Filing Instructions Guide and provides when to report not applicable or exempt, including the codes used for reporting not applicable or exempt from section 4 of the 2022 Filing Instructions Guide for ease of reference. This chart does not provide data fields or enumerations used in preparing the HMDA loan/application register (LAR). For more information on preparing the HMDA LAR, please see http://ffiec.cfpb.gov. Data point Regulation C references Description Filing instructions Reporting “Not Applicable”c or “Exempt” (1) Legal Entity Identifier (LEI) § 1003.4(a)(1)(i)(A) Identifier issued to the financial institution (FI) by a utility endorsed by the Global LEI Foundation or LEI Regulatory Oversight Committee Enter your financial institution’s LEI. Example: If your institution’s LEI is 10BX939C5543TQA1144M, enter 10BX939C5543TQA1144M. This is a compliance aid issued by the Consumer Financial Protection Bureau. The Bureau published a policy statement on compliance aids, available at consumerfinance.gov/rules-policy/final-rules/policy-statementcompliance-aids/, that explains the Bureau’s approach to compliance aids. 1 2022 REPORTABLE HMDA DATA: A REGULATORY AND REPORTING OVERVIEW REFERENCE CHART – VERSION 1, JANUARY 27, 2022
Data point Regulation C references Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d
Effective January 1, 2022
(2) Universal
Loan Identifier
(ULI) or NonUniversal Loan
Identifier (NULI)
§ 1003.4(a)(1)(i),
Comments
4(a)(1)(i)-1 through
-5, and appendix C
ULI: Identifier assigned to identify and retrieve a loan or application that contains the FI’s LEI, an internally generated sequence of characters, and a check digit NULI: Identifier assigned to identify a loan or application ULI. Assign and report a ULI that:
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022
(5) Loan
Purpose
§ 1003.4(a)(3),
Comments 4(a)(3)-
1 through -6
Whether the transaction is for home purchase, home improvement, refinancing, cash-out refinancing, or another purpose Indicate the purpose of the covered loan or application by entering: To report not applicable, enter “Code 5” for purchased covered loans where origination took place prior to January 1, 2018, Comment 4(a)(3)-6.
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022
(10) Action
Taken and (11)
Action Taken
Date
§ 1003.4(a)(8),
Comments
4(a)(8)(i)-1 through
-14 and 4(a)(8)(ii)-1 through -6
Type and date of action the FI took on the loan, application, or preapproval request ACTION TAKEN. Indicate the action taken on the covered loan or application by entering:
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022
STATE. Enter the two letter state code of the property as one (1) data field. ZIP CODE. Enter the ZIP code of the property as one (1) data field. NON-STANDARD ADDRESSING. U.S. Postal Service Publication 28, Subsection 24, 25, and 29, respectively, can be used as guides for formatting non-standard style addressing including rural route, Highway Contract Route, and Puerto Rico addresses to increase the accuracy for geocoding. The following address formats are generally not preferred:
STATE ONLY: For transactions for which State reporting is not required under § 1003.4(a)(9)(i), a financial institution may not report not applicable for the Property Address State unless the institution is permitted to report not applicable for State for Property Location. See below for when you may report not applicable for Property Location. Enter “Exempt” in the Street Address, City, and Zip Code fields if, pursuant to the 2018 HMDA Final Rule, if your institution is not reporting Property Address.
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022
STATE. Enter the two letter state code of the property as one (1) data field.
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
o
Effective January 1, 2022 institution is permitted to report not applicable for Property Address. See above for when you may report not applicable for Property Address. (16) Ethnicity, § 1003.4(a)(10)(i), Comments 4(a)(10)(i)-1 and -2 and appendix B Applicant’s or borrower’s ethnicity, race, and sex, and if information was collected by visual observation or surname ETHNICITY OF APPLICANT OR BORROWER. Indicate the ethnicity of the applicant or borrower, or of the first co-applicant or co-borrower, as applicable, by entering up to five (5):
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022 taken by mail, internet, or telephone. Leave the remaining Ethnicity of Applicant or Borrower data fields blank.
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022 applicant or borrower, or by any co-applicant or co-borrower, as applicable. Enter more than one other Hispanic or Latino ethnicity, if provided by the applicant or borrower, or by any co-applicant or coborrower, as applicable. The maximum number of characters for this field is 100 characters, including spaces. If the applicant or borrower, or any co-applicant or co-borrower, did not provide another Hispanic or Latino ethnicity(ies), leave this field blank. ETHNICITY COLLECTED ON THE BASIS OF VISUAL OBSERVATION OR SURNAME. Indicate whether the ethnicity of the applicant or borrower, or of the first co-applicant or co-borrower, as applicable, was collected on the basis of visual observation or surname by entering:
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
o
Effective January 1, 2022
Comments
4(a)(10)(i)-1 and -2 and appendix B information was collected by visual observation or surname
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
o
Effective January 1, 2022 whether or not you also choose to report Code 27 as one of the Race of Applicant or Borrower, or Race of Co-Applicant or Co-Borrower, data fields. See below for information about the Race Free Form Text Field for Other Asian.
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Data point Regulation C references Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d
Effective January 1, 2022 or borrower, or by any co-applicant or co-borrower, as applicable. The maximum number of characters for this field is 100 characters, including spaces. If the applicant or borrower, or any co-applicant or co-borrower did not provide an American Indian or Alaska Native Enrolled or Principal Tribe(s), leave the Race Free Form Text Field for American Indian or Alaska Native Enrolled or Principal Tribe field blank.
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022 number of characters for this field is 100 characters, including spaces. If the applicant or borrower, or any co-applicant or coborrower, did not provide an Other Pacific Islander race(s), leave the Race Free Form Text Field for Other Pacific Islander field blank. RACE COLLECTED ON THE BASIS OF VISUAL OBSERVATION OR SURNAME. Indicate whether the race of the applicant or borrower, or of the first co-applicant or co-borrower, as applicable, was collected on the basis of visual observation or surname by entering:
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022 observation or surname
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022
NOTE: Use Code 3 if the requirement to report the applicant’s or borrower’s sex does not apply to the covered loan or application that your institution is reporting.
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022
4(a)(10)(iii)-1 through -10 income relied on in making the credit decision; Or, if a credit decision was not made, the gross annual income relied on in processing the application relied on in processing the application. Round all dollar amounts to the nearest thousand (round $500 up to the next $1,000). Example: If the income amount is $35,500, enter 36.
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022
Data point Regulation C references Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d
Effective January 1, 2022
Protection Act
(HOEPA)
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022
NOTE: If Regulation C requires your institution to report a single score that corresponds to multiple applicants or borrowers, either report the credit score in the applicant field, and use Code 8888 in the coapplicant field; or report the credit score in the co-applicant field and use Code 8888 in the applicant field. 2018 HMDA Rule, your institution is not reporting Credit Score. NAME AND VERSION OF CREDIT SCORING MODEL. Indicate the name and version of the credit scoring model used to generate the credit score, or scores, relied on in making the credit decision by entering:
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022 that is not listed above in the Name and Version of Credit Scoring Model Conditional Free Form Text Field for Code 8. If Code 8 is not entered, leave this field blank.
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022 effective date of Regulation Z, § 1026.19(f), Comment 4(a)(18)-2. Enter “Exempt” if, pursuant to the 2018 HMDA Rule, your institution is not reporting Origination Charges. (29) Discount Points § 1003.4(a)(19), Comments 4(a)(19)-1 through - 3 Points paid to the creditor to reduce the interest rate Enter, in dollars, the points paid to the creditor to reduce the interest rate. If no points were paid, leave this field blank. Example: If the amount paid for discount points is $2,399.04, enter 2399.04. Enter “NA” for:
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022 effective date of Regulation Z, § 1026.19(f), Comment 4(a)(20)-2. Enter “Exempt” if, pursuant to the 2018 HMDA Rule, your institution is not reporting Lender Credits. (31) Interest Rate § 1003.4(a)(21), Comments 4(a)(21)-1 through - 3 Interest rate on the approved application or loan Enter, as a percentage, to at least three (3) decimal places, the interest rate. Numbers calculated to beyond three (3) decimal places may either be reported beyond three (3) decimal places or rounded or truncated to three (3) decimal places. Decimal place trailing zeros may be either included or omitted. Example: If the interest rate is 4.125%, enter 4.125. Enter “NA” for applications that have been denied, withdrawn, or closed for incompleteness, Comment 4(a)(21)-2. Enter “Exempt” if, pursuant to the 2018 HMDA Rule, your institution is not reporting Interest Rate. If the interest rate is exactly 4.500%, enter 4.5, 4.50, or 4.500. (32) Prepayment Penalty Term § 1003.4(a)(22), Comments 4(a)(22)-1 through - 2 Term in months of any prepayment penalty Enter, in numeral form, the term, in months, of any prepayment penalty. Example: If a prepayment penalty may be imposed within the first 24 months after closing or account opening, enter 24. Enter “NA” for:
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022
(33) Debt-toIncome Ratio
§ 1003.4(a)(23),
Comments
4(a)(23)-1 through -
7
Ratio of the applicant’s or borrower’s total monthly debt to total monthly income relied on Enter, as a percentage, the ratio of the applicant’s or borrower’s total monthly debt to the total monthly income relied on in making the credit decision. Use decimal places only if the ratio relied upon uses decimal places. The HMDA Platform can accept up to fifteen (15) decimal places and can accept negative numbers for Debt-to-Income Ratio. Example: If the relied upon debt-to-income ratio is 42.95, enter 42.95, not 43. If, however, your institution rounded the ratio up to 43% and relied on the rounded-up number, enter 43. Enter “NA” for:
Data point Regulation C references Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d
Effective January 1, 2022
Example: If the relied upon combined loan-to-value ratio is 80.05, enter 80.05, not 80. If, however, your institution rounded the ratio down to 80 and relied on the rounded-down number, enter 80.
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022
Enter “Exempt” if, pursuant to the 2018 HMDA
Rule, your institution is not reporting Property Value.
(39)
Manufactured
Home Secured
Property Type
§ 1003.4(a)(29),
Comments
4(a)(29)-1 through -
4
Whether the covered loan is secured by a manufactured home and land or a manufactured home and not land Indicate whether the covered loan or application is, or would have been, secured by a manufactured home and land, or by a manufactured home and not land, by entering:
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022
Initially Payable to Your
Institution)
4(a)(33)(ii)-1 through -2 obligation was initially payable to the FI
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022 and were originated prior to January 1, 2018, Comment 4(a)(34)-4. Enter “Exempt” if, pursuant to the 2018 HMDA Rule, your institution is not reporting Mortgage Loan Originator NMLSR Identifier. (45) Automated Underwriting System § 1003.4(a)(35), Comments 4(a)(35)-1 through - 7 Name of the automated underwriting system used by the FI to evaluate the application and the result generated by that system AUTOMATED UNDERWRITING SYSTEM. Indicate the automated underwriting system(s) (AUS) used by your institution to evaluate the application by entering up to five (5) of the following:
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022
AUS CONDITIONAL FREE FORM TEXT FIELD FOR CODE 5. Enter more than one other Automated Underwriting System, as applicable. The maximum number of characters for this field is 255 characters, including spaces. If Code 5 is not entered, leave this field blank. AUTOMATED UNDERWRITING SYSTEM RESULT. Indicate the result(s) generated by the automated underwriting system (AUS) previously indicated by entering:
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022 listed above in the AUS Result Conditional Free Form Text Field for Code 16. See below for more information on the AUS Result Conditional Free Form Text Field for Code 16.
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022
Regulation C Data point Description Filing instructionsb Reporting “Not Applicable”c or “Exempt”d references
Effective January 1, 2022
(48) Business or
Commercial
Purpose
§ 1003.4(a)(38),
Comment 4(a)(38)-
1
Indicator of whether the transaction is primarily for a business or commercial purpose Indicate whether the covered loan is, or the application is for a covered loan that will be made, primarily for a business or commercial purpose by entering:
Enter “Code 1111” if, pursuant to the 2018 HMDA Rule, your institution is not reporting Business or Commercial Purpose.
Appendix
Intro
A: Overview of Data
Requirements Chart
B: HMDA Small Entity
Compliance Guide
C: Instructions on
Collection of Data on
Ethnicity, Race, and Sex
D: Institutional Coverage
Chart
E: Transactional
Coverage Chart
F: Partial Exemptions
Charts
G: Data Fields and Data
Points Chart
H: Regulation C
I: Official Interpretations to Regulation C
J: Federal HMDA
Reporting Agencies
K: HMDA Poster
APPENDIX B: HMDA Small Entity Compliance Guide
The following is a copy of the CFPB’s HMDA Small Entity Compliance Guide, an easy-to-use summary of Regulation C, as amended by the 2015 HMDA Rule, 2017 HMDA Rule, the 2018 Act that was further implemented by the 2019 HMDA Rule, and the 2020 HMDA Rule, and to highlight information that financial institutions and those that work with them might find helpful when complying with Regulation C. This Guide is not a substitute for Regulation C. Regulation C and its official interpretations (also known as the commentary) are the definitive sources of information regarding its requirements. Regulation C and its official interpretations are available in Appendix H and I of this Guide and at www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1003/.
CONSUMER FINANCIAL PROTECTION BUREAU | APRIL 2021 OMB CONTROL NO. 3170-0008 Home Mortgage Disclosure (Regulation C) Small Entity Compliance Guide
April 1, 2021 5.1
May 26, 2020 5.0
January 23, 2020 4.0
Version Log
The Bureau updates this guide on a periodic basis. Below is a version log noting the history of this document and its updates:
Date Version Summary of Changes
Deletes text related to the Bureau’s Statement on Supervisory and Enforcement Practices Regarding Quarterly Reporting Under the Home Mortgage Disclosure Act because the Bureau rescinded it. (Sections 2.6 and 6.2). Updates to incorporate the content of the 2020 HMDA Thresholds Final Rule issued on April 16, 2020, including:
Institutional coverage and the uniform loan-volume threshold for closed-end mortgage loans and open-end lines of credit (Sections 2.1, 3.1, and 9.1) Transactional coverage for closed-end mortgage loans and open-end lines of credit (Sections 2.2, 4.1.1, 4.1.2, and 9.1) Updates to incorporate the Bureau’s Statement on Supervisory and Enforcement Practices Regarding Quarterly Reporting Under the Home Mortgage Disclosure Act (Sections 2.6, and 6.2) Miscellaneous administrative changes in various sections. Updates to incorporate the content of the final rule issued on October 10, 2019, including:
Effective date (Section 2)
Institutional coverage for open-end lines of credit (Sections 2.1, 3.1, 3.1.1, 3.1.2, 9.1) Transactional coverage for open-end lines of credit (Sections 2.2, 4.1.2, 4.3, 4.3.2) Partial exemptions (Sections 4.3, 4.3.1, 8.5) Non-universal loan identifier (Sections 5.2) Information about the Bureau’s policy guidance on disclosure of loanlevel HMDA data (Section 2.7). 1 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
October 2018 3.0
October 2017 2.0
Deletes text related to 2017 institutional coverage because it is no longer in effect (Section 2.1, 2.3, 2.5, 5.1.1, 9.1). Deletes text regarding the collection of race, ethnicity, and sex for applications taken in 2017 (Section 2.3, 5.1). Deletes text related to Appendix A of Regulation C because it was removed from Regulation C in 2019 (Section 2.5). Miscellaneous administrative changes in various sections. Updates to reflect Section 104(a) of the Economic Growth, Regulatory Relief, and Consumer Protection Act (2018 Act) and the interpretive and procedural rule issued on August 31, 2018 (2018 HMDA Rule), including:
General information about Section 104(a) of the 2018 Act and the 2018 HMDA Rule (Section 1) Key changes and effective date of Section 104(a) of the 2018 Act (Sections 2.1, 2.3, and 4.3) Institutions eligible to rely upon the partial exemptions created by Section 104(a) of the 2018 Act (Section 4.3.1) Loan-volume thresholds for the partial exemptions (Section 4.3.2) Collecting, recording, and reporting data points if a partial exemption applies (Sections 4.3.3) Reporting a non-universal loan identifier if a partial exemption applies (Section 5.2) Reporting other data points affected by the partial exemptions (Sections 5.4, 5.9, 5.11, 5.12, 5.16, 5.17, and 5.19 through 5.30) Additional information about which transactions a financial institution must count when determining if a loan-volume threshold has been met (Section 4.1.2). Revisions to the portion of the table describing the loan amount reported for a counteroffer for an amount different from the amount for which the applicant applied, if the applicant did not accept or failed to respond. Also, revisions to the portion of the same table describing the loan amount reported for an Application that was denied, closed for incompleteness, or withdrawn (Section 5.8). Miscellaneous administrative changes in various sections. Updates to incorporate the content of the final rule issued on August 24, 2017, including changes and clarification regarding:
2 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Institutional coverage and the uniform loan-volume threshold for open-end lines of credit (Sections 2.1, 3.2, and 9.1) Transactional coverage for open-end lines of credit (Sections 2.2, 4.1.2, and 9.1) Collection and reporting of applicant information (Sections 2.4, 5.1, 9.2.1, and Attachment A) ,Effective date of enforcement provisions for larger volume reporters (Sections 2.8 and 7) Whether certain installment sales contracts are extensions of credit for purposes of the HMDA Rule (Section 4.1.1.1) An exclusion from coverage for certain preliminary transactions that consolidate new funds into a New York CEMA (Sections
4.1.1.1. and 4.1.2)
What constitutes a loan secured by a multifamily dwelling under the HMDA Rule (Sections 4.1.1.2) The exclusion from coverage for temporary financing (Section 4.1.2) Including certain distributions from retirement and other asset accounts when reporting income (Section 5.1.2) Reporting the ULI and use of check digit tool provided by the Bureau (Section 5.2) Reporting loan purpose (Section 5.7) Reporting property address and location when certain information is unknown or unavailable (Section 5.12) Reporting census tract using the geocoding tool provided by the Bureau (Sections 5.12 and 7) Reporting CLTV when the calculation includes property other than the Identified Property (Section 5.21) Reporting credit score when there are multiple scores or multiple applicants (Section 5.22) Securitizers and automated underwriting systems (Section 5.23) Reporting interest rate, rate spread, and certain other data points when revised or corrected disclosures are provided (Sections 5.24, 5.26, and 5.28) Reporting the introductory rate (Section 5.25) Reporting rate spread, including for applications that are approved but not accepted (Section 5.26) Reporting mortgage loan originator identifier for certain purchased covered loans (Section 5.30) Reporting action taken if there is a counteroffer (Attachment B) Also, makes miscellaneous administrative changes to various sections 3 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
December 2015 1.0 Original Document
4 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Table of contents
Table of contents .........................................................................................................5
5.1 Applicant information .............................................................................51
5.2 Universal loan identifier (ULI) or non-universal loan identifier........... 59
5.3 Application date ...................................................................................... 62
5.4 Application channel ................................................................................ 63
5.5 Preapproval request................................................................................64
5.6 Loan type.................................................................................................64
5.7 Loan purpose .......................................................................................... 65
5.8 Loan amount ...........................................................................................68
5.9 Loan term................................................................................................69
5.10 Action taken and date ............................................................................. 70
5.11 Reasons for denial................................................................................... 70
5.12 Property address and property location................................................. 72
5.13 Construction method .............................................................................. 74
5.14 Occupancy type ....................................................................................... 75
5.15 Lien status ............................................................................................... 76
5.16 Manufactured home information ........................................................... 77
5.17 Property value ......................................................................................... 78
5.18 Total units ............................................................................................... 79
5.19 Multifamily affordable units...................................................................80
5.20 Debt-to-income ratio .............................................................................. 81
5.21 Combined loan-to-value .........................................................................82
5.22 Credit score information.........................................................................84
5.23 Automated underwriting system information .......................................86
5.24 Interest rate.............................................................................................89
5.25 Introductory rate period ......................................................................... 92
5.26 Rate spread ............................................................................................. 93
6 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
5.27 Non-amortizing features .........................................................................98
5.28 Data points for certain loans subject to Regulation Z ............................99
5.29 Transaction indicators .......................................................................... 103
5.30 Mortgage loan originator identifier...................................................... 104
5.31 Type of purchaser ................................................................................. 105
6. Recording and reporting..................................................................................108
6.1 Recording .............................................................................................. 108
6.2 Reporting .............................................................................................. 109
6.3 Disclosure of data .................................................................................. 111
7. Enforcement provisions ...................................................................................114
8. Mergers and acquisitions ................................................................................115
8.1 Determining coverage............................................................................ 115
8.2 Reporting responsibility for calendar year of merger or acquisition.... 115
8.3 Changes to appropriate Federal agency or TIN ....................................116
8.4 Determining quarterly reporting coverage............................................ 117
8.5 Applicability of partial exemptions under the 2018 Act after a merger or
acquisition .............................................................................................118
9. Practical implementation and compliance considerations ...........................120
9.1 Identifying affected institutions, products, departments, and staff .... 120
9.2 Implementation and compliance management support activities ...... 124
Attachment A:..........................................................................................................126
Attachment B:..........................................................................................................127
7 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Action taken chart .......................................................................................... 127
Attachment C: .......................................................................................................... 132
Sample notices ............................................................................................... 132
PAPERWORK REDUCTION ACT
According to the Paperwork Reduction Act of 1995, an agency may not conduct or sponsor, and, notwithstanding any other provision of law, a person is not required to respond to a collection of information unless it displays a valid OMB control number. The OMB control number for this collection is 3170-0008. It expires on November 30, 2022. The information collections created by the Final Rule published October 28, 2015 at 80 FR 66127 will not become effective until either three years from the date of publication of the rule or 2020 in the case of certain information collections. The time required to complete this information collection is estimated to average between 161 hours and 9,000 hours per response depending on the size of the institution. The obligation to respond to this collection of information is mandatory per the Home Mortgage Disclosure Act, 12 U.S.C. 2801-2810, as implemented by the Bureau’s Regulation C, 12 CFR part 1003. Comments regarding this collection of information, including the estimated response time, suggestions for improving the usefulness of the information, or suggestions for reducing the burden to respond to this collection should be submitted to the Bureau of Consumer Financial Protection (Attention: PRA Office), 1700 G Street NW, Washington, DC 20552, or by email to PRA@cfpb.gov. The other agencies collecting information under this regulation maintain OMB control numbers for their collections as follows: Office of the Comptroller of the Currency (1557–0159), the Federal Deposit Insurance Corporation (3064–0046), the Federal Reserve System (7100–0247), the Department of Housing and Urban Development (2502–0529), and the National Credit Union Administration (3133–0166). 8 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
1. Introduction
The Home Mortgage Disclosure Act (HMDA), which Congress enacted in 1975, requires certain financial institutions to collect, record, report, and disclose information about their mortgage lending activity. Regulation C implements HMDA and sets out specific requirements for the collection, recording, reporting, and disclosure of mortgage lending information. The datarelated requirements in HMDA and Regulation C serve three primary purposes: (1) to help determine whether financial institutions are serving their communities’ housing needs; (2) to assist public officials in distributing public investment to attract private investment; and (3) to assist in identifying potential discriminatory lending patterns and enforcing antidiscrimination statutes. The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) transferred rulemaking authority for HMDA to the Bureau of Consumer Financial Protection (Bureau), effective July 2011. It also amended HMDA to require financial institutions to report new data points and authorized the Bureau to require financial institutions to collect, record, and report additional information. On August 29, 2014, the Bureau published proposed amendments to Regulation C to implement the Dodd-Frank Act changes and to make additional changes. The Bureau carefully reviewed and considered the comments it received on its proposed amendments. On October 15, 2015, the Bureau issued a final rule (2015 HMDA Rule) amending Regulation C. The 2015 HMDA Rule was published in the Federal Register on October 28, 2015. On August 24, 2017, the Bureau issued a final rule (2017 HMDA Rule) further amending Regulation C to make technical corrections and to clarify and amend certain requirements adopted by the 2015 HMDA Rule. The 2017 HMDA Rule was published in the Federal Register on September 13, 2017. On May 24, 2018, the President signed the Economic Growth, Regulatory Relief, and Consumer Protection Act (2018 Act) into law. Effective May 24, 2018, Section 104(a) of the 2018 Act created partial exemptions from some of HMDA’s requirements for certain covered institutions. On August 31, 2018, the Bureau issued an interpretive and procedural rule (2018 HMDA Rule) to implement and clarify Section 104(a) of the 2018 Act. The 2018 HMDA Rule was published in the Federal Register on September 7,
2018. On October 10, 2019, the Bureau issued a final rule (2019 Rule) to extend until January 1,
2022 the current temporary loan-volume threshold for reporting data about open-end lines of credit and incorporate the 2018 HMDA Rule into Regulation C and implement further the 2018 Act. The 2019 HMDA Rule was published in the Federal Register on October 29, 2019. On 9 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
April 16, 2020, the Bureau issued a final rule (2020 HMDA Thresholds Rule) amending Regulation C’s institutional and transactional coverage thresholds for closed-end mortgage loans and open-end lines of credit. The 2020 HMDA Thresholds Rule was published in the Federal Register on May 12, 2020. In this guide, the 2015 HMDA Rule, 2017 HMDA Rule, 2018 HMDA Rule, 2019 HMDA Rule, and 2020 HMDA Thresholds Rule are collectively referred to as the HMDA Rule. Certain terms that are defined in Regulation C are capitalized in this guide for ease of reference. The definitions for these terms are found in 12 CFR 1003.2.
1.1 Purpose of this guide
The purpose of this guide is to provide an easy-to-use summary of Regulation C to highlight information that financial institutions and those that work with them might find helpful when implementing the HMDA Rule. This guide meets the requirements of Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996, which requires the Bureau to issue a small entity compliance guide to help small entities comply with new regulations. Larger entities may also find this guide useful. This is a Compliance Aid issued by the Consumer Financial Protection Bureau. The Bureau published a Policy Statement on Compliance Aids, available at https://www.consumerfinance.gov/policy-compliance/rulemaking/final-rules/policystatement-compliance-aids/, that explains the Bureau’s approach to Compliance Aids. Regulation C, the 2015 HMDA Rule, the 2017 HMDA Rule, the 2018 HMDA Rule, the 2019 HMDA Rule, the 2020 HMDA Thresholds Rule, and the Official Interpretations (also known as the commentary) are the definitive sources of information regarding their requirements. The 2015 HMDA Rule, the 2017 HMDA Rule, the 2018 HMDA Rule, the 2019 HMDA Rule, and the 2020 HMDA Thresholds Rule are available at http://www.consumerfinance.gov/regulatoryimplementation/hmda/. The focus of this guide is Regulation C and the HMDA Rule. Except when specifically needed to explain a provision of amended Regulation C, this guide does not discuss other Federal or State laws that may apply to mortgage lending. 10 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
This guide has examples to illustrate some portions of the HMDA Rule. The examples do not include all possible factual situations that could illustrate a particular provision, trigger a particular obligation, or satisfy a particular requirement. Even though an example may identify a fictitious financial institution as, for example, “Ficus Bank” or “Ficus Mortgage Company,” the provision or obligation being illustrated in the example may apply to all financial institutions, including both depository and nondepository financial institutions. Sometimes this guide will distinguish between the requirements of the HMDA Rule and the requirements of Regulation C as they apply before a specific part of the HMDA Rule goes into effect. When making these distinctions, the guide generally refers to the requirements of Regulation C as they apply before a specific part of the HMDA Rule goes into effect as “current Regulation C.” However, it should be understood that this means the requirements of Regulation C as they are before the specific part of the HMDA Rule being discussed goes into effect, not Regulation C as of any specific date (such as the date the guide is being read).
1.2 Additional implementation resources
Additional resources to help institutions understand and comply with the HMDA Rule are available on the Bureau’s website at http://www.consumerfinance.gov/regulatoryimplementation/hmda/. These resources include a list of frequently asked questions and answers on particular topics to assist in understanding and complying with HMDA and Regulation C. A person who has a specific regulatory interpretation question about the HMDA Rule after reviewing these materials may submit the question on the Bureau’s website at https://reginquiries.consumerfinance.gov/. Bureau staff provide only informal responses to regulatory inquiries, and the responses do not constitute official interpretations or legal advice. Generally, Bureau staff is not able to respond to specific inquiries the same business day or within a particular requested timeframe. Actual response times will vary based on the number of questions Bureau staff is handling and the amount of research needed to respond to a specific question. Technical questions about the HMDA Platform, or the publication of HMDA data should be directed to hmdahelp@cfpb.gov. 11 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
2.1 Institutional coverage
Effective January 1, 2018, for changes to institutional coverage; effective July 1, 2020, for a change to the loan-volume threshold for covered closed-end mortgage loans; effective January 1, 2022, for a change to the loan-volume threshold for open-end lines of credit Effective January 1, 2018, the HMDA Rule adopts a uniform loan-volume threshold for all financial institutions. As described below, the loan-volume threshold for closed-end mortgage loans and open-end lines of credit adjusts over three effective dates. First, from January 1, 2018, through June 30, 2020, a financial institution is not subject to Regulation C unless it originated at least 25 covered closed-end mortgage loans in each of the two preceding calendar years or at least 500 covered open-end lines of credit in each of the two preceding calendar years, and it meets other applicable coverage requirements. Second, from July 1, 2020 through December 31, 2021, a financial institution is not subject to Regulation C unless it originated at least 100 covered closed-end mortgage loans in each of the two preceding calendar years or at least 500 covered open-end lines of credit in each of the two preceding calendar years, and it meets other applicable coverage requirements. Third, effective January 1, 2022, a financial institution is not subject to Regulation C unless it originated at least 100 covered closed-end mortgage loans in each of the two preceding calendar years or at least 200 The 2018 Act added partial exemptions to HMDA. As discussed in Section 4.3, certain financial institutions are eligible for these partial exemptions from some of the HMDA Rule’s data collection and reporting requirements. Among other things, in order to be eligible for a partial exemption, a financial institution must be either an insured depository institution as defined in
Section 3 of the Federal Deposit Insurance
Act or an insured credit union as defined in
Section 101 of the Federal Credit Union Act.
As discussed in Section 4.3, an insured depository institution with a less than satisfactory Community Reinvestment Act examination history is not eligible for a partial exemption. A financial institution that was subject to HMDA’s closed-end requirements as of January 1, 2020, but is no longer subject to HMDA’s closed-end requirements as of July 1, 2020, because it originated fewer than 100 closed-end mortgage loans during 2018 or 2019, may stop collecting, recording, and reporting HMDA data as of July 1, 2020. Such an institution may report voluntarily HMDA data on closed-end mortgage loans from 2020 as long as the institution reports data for the full calendar year 2020. 13 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
covered open-end lines of credit in each of the two preceding calendar years, and it meets other applicable coverage requirements. For depository financial institution coverage, the HMDA Rule maintains Regulation C’s assetsize threshold, location test, federally related test, and loan activity test. For nondepository financial institutions, the HMDA Rule retains the location test. For more information regarding which financial institutions are subject to the HMDA Rule, see
Section 3 and the HMDA Institutional Coverage Charts.
2.2 Transactional coverage
Effective January 1, 2018 for data collected on or after January 1, 2018 (to be reported in or after 2019); effective July 1, 2020 for data collected on or after July 1, 2020 for a change to the exclusion for closed-end mortgage loans; effective January 1, 2022 for data collected on or after January 1, 2022 (to be reported in or after 2023) for a change to the exclusion for openend lines of credit. The HMDA Rule modifies the types of transactions that are subject to Regulation C and generally adopts a dwelling-secured standard for transactional coverage. Beginning on January 1, 2018, Regulation C generally applies to consumer-purpose, closed-end loans and open-end lines of credit that are secured by a dwelling. 12 CFR 1003.2(d), (e), and (o). A home improvement loan is not subject to Regulation C unless it is secured by a dwelling. Beginning on January 1, 2018, Regulation C applies to business-purpose, closed-end loans and open-end lines of credit that are dwelling-secured and are home purchase loans, home improvement loans, or refinancings. 12 CFR 1003.3(c)(10). For business-purpose transactions, the HMDA Rule creates a dwelling-secured standard and maintains current Regulation C’s purpose test. The HMDA Rule retains existing categories of excluded transactions, clarifies some categories of excluded transactions, and expands the existing exclusion for agricultural-purpose transactions. 12 CFR 1003.3(c). It also adds new categories of excluded transactions that are designed to work in tandem with the HMDA Rule’s other changes. For example, from January 1, 2018 through June 30, 2020, closed-end mortgage loans are excluded transactions for a financial 14 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
institution that did not originate 25 or more of them in each of the two preceding calendar years. Effective July 1, 2020, closed-end mortgage loans are excluded transactions for a financial institution that did not originate 100 or more of them in each of the two preceding calendar years. Similarly, open-end lines of credit are excluded transactions for a financial institution that did not originate a certain number of them in each of the two preceding calendar years. For 2018, 2019, 2020, and 2021, open-end lines of credit are excluded transactions for a financial institution that did not originate at least 500 of them in each of the two preceding calendar years. Effective January 1, 2022, open-end lines of credit are excluded transactions for a financial institution that did not originate at least 200 of them in each of the two preceding calendar years.2 The HMDA Rule expands the types of preapproval requests that are reported, but also excludes requests regarding some types of loans from the scope of reportable preapproval requests. Under the HMDA Rule, reporting of preapproval requests that are approved but not accepted is required instead of optional. However, under the HMDA Rule, preapproval requests regarding home purchase loans to be secured by multifamily dwellings, preapproval requests for open-end lines of credit, and preapproval requests for reverse mortgages are not reportable. The 2018 Act created two partial exemptions:
one for closed-end mortgage loans and one for open-end lines of credit. Transactions that are subject to the HMDA Rule and are covered by a partial exemption are still subject to some of the HMDA Rule’s requirements, and certain data points must be collected, recorded, and reported for such transactions. For more information on the partial exemptions, see Section 4.3. For more information regarding the transactions that are subject to the HMDA Rule, see Section 4 and the HMDA Transactional Coverage Chart. 2 A financial institution may collect, record, report, and disclose information, as described in §§ 1003.4 and 1003.5, for a closed-end mortgage loan excluded under § 1002.3(c)(11) or an open-end line of credit excluded under § 1002.3(c)(12) as though it were a covered loan, provided that the financial institution complies with such requirements for all applications for closed-end mortgage loans or open-end lines of credit that it receives, originates, and purchases that otherwise would have been covered loans during the calendar year during which final action is taken on the excluded closed-end mortgage loan or open-end line of credit. 15 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
2.3 Required data points
Effective January 1, 2018 and applicable to data reported in or after 2019; partial exemptions effective May 24, 2018 and applicable for collection, recording, and reporting of data on or after May 24, 2018. The HMDA Rule adds the data points specified in the Dodd-Frank Act as well as data points that the Bureau determined will assist in carrying out HMDA’s purposes. For example, the HMDA Rule adds new data points for age, credit score, automated underwriting information, debt-toincome ratio, unique loan identifier, property value, application channel, points and fees, borrower-paid origination charges, discount points, lender credits, loan term, prepayment penalty, and identification of other loan features. 12 CFR 1003.4(a). The HMDA Rule also modifies some existing data points. Effective May 24, 2018, the 2018 Act created partial exemptions that permit certain financial institutions to exclude 26 data points when collecting, recording, and reporting HMDA data for certain transactions. If a partial exemption applies to a covered transaction, an insured depository institution or insured credit union may, but is not required to, collect, record, and report these 26 data points. However, the insured depository institution or insured credit union must collect, record, and report the remaining 22 data points as required by the HMDA Rule and otherwise comply with the HMDA Rule for such covered transactions. Generally, a financial institution collects, records, and reports the new and modified data points under the HMDA Rule for applications on which final action is taken on or after January 1,
2018. However, if a partial exemption applies, an insured depository institution or insured
credit union is not required to collect, record, or report many of these data points as discussed in
Section 4.3.3.
A financial institution collects, records, and reports the new and modified data points, to the extent that they apply to purchased loans, for purchases of covered loans that occur on or after January 1, 2018. For more information regarding the data points that must be reported under the HMDA Rule, see Section 5. For more information on the data points that must be reported if a partial exemption applies to a covered transaction, see Section 4.3.3. 16 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
2.4 Collection and reporting of applicant
information
Effective January 1, 2018 for data collected in or after 2018 (to be reported in or after 2019) For data collected in or after 2018, the HMDA Rule amends the requirements for collection and reporting of information regarding an applicant’s or borrower’s ethnicity, race, and sex. First, the HMDA Rule adds a requirement to report how the institution collected the information about the applicant’s or borrower’s ethnicity, race, and sex. A financial institution reports whether or not it collected the information on the basis of visual observation or surname. 12 CFR 1003.4(a)(10)(i). Financial institutions are required to collect information about an applicant’s ethnicity, race, and sex on the basis of visual observation or surname when an applicant chooses not to provide the information for an application taken in person. Second, financial institutions must permit applicants to self-identify using disaggregated ethnic and racial subcategories and must report disaggregated information applicants provide. However, the HMDA Rule does not require or permit financial institutions to use the disaggregated subcategories when identifying the applicant’s ethnicity and race based on visual observation or surname. The HMDA Rule includes a new sample data collection form in
appendix B that provides the required aggregated categories and disaggregated subcategories
for ethnicity and race. Appendix B to Part 1003.
For more information regarding the collection and reporting of applicant information under the HMDA Rule, see Section 5.1.
2.5 Annual reporting
Effective January 1, 2019 for changes requiring electronic submission of HMDA data in 2019 and later years The HMDA Rule retains the requirement that a financial institution submit its HMDA data to its appropriate Federal agency by March 1 following the calendar year for which it collected the data, but requires electronic submission of the data. 17 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
The Bureau developed a new web-based tool for electronically submitting HMDA data. Financial institutions are required to submit data electronically using the web-based tool beginning in 2018 for data collected in 2017. For more information on the submission tool, see http://ffiec.cfpb.gov/. Beginning in 2019, financial institutions are required to submit the new dataset electronically in accordance with the HMDA Rule, using the new web-based submission tool and revised procedures available at http://ffiec.cfpb.gov/. For more information regarding annual reporting under the HMDA Rule, see Section 6.2.1.
2.6 Quarterly reporting
Effective January 1, 2020 for data collected and reported in or after 2020 The HMDA Rule imposes a new quarterly reporting requirement for larger-volume reporters. In addition to their annual data submission, these larger-volume reporters will also electronically submit their HMDA data for each of the first three quarters of the year on a quarterly basis beginning in 2020. 12 CFR 1003.5(a)(1)(ii). For more information regarding quarterly reporting under the HMDA Rule, see Section 6.2.2.
2.7 Disclosure requirements
Effective January 1, 2018 for data collected on or after January 1, 2017 (to be reported in or after 2018) 18 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
The HMDA Rule replaces Regulation C’s requirements to provide a disclosure statement and modified LAR3 to the public upon request with new requirements to provide notices that the institution’s disclosure statement and modified LAR are available on the Bureau’s website. 12 CFR 1003.5(b)(2) and (c). The HMDA Rule also modifies the content of the posting required under Regulation C. The HMDA Rule includes sample language that financial institutions can use to provide notice that the institution’s HMDA data are available on the Bureau’s website and to comply with the posting requirement. These revised disclosure requirements are effective January 1, 2018 and apply to data collected on or after January 1, 2017 and reported in or after 2018. The Bureau’s policy guidance on the disclosure of loan-level HMDA data4 notes that for HMDA data collected by Financial Institutions in or after 2018 and made available to the public beginning in 2019, the Bureau intends to modify the public loan-level data to exclude certain fields and reduce the precision of most of the values reported for certain data fields. For more information regarding the disclosure requirements under the HMDA Rule, see Section 6.3.
2.8 Enforcement provisions for largervolume reporters
Effective January 1, 2020
The HMDA Rule provides that inaccuracies or omissions in quarterly reporting are not violations of HMDA or Regulation C if the financial institution makes a good-faith effort to report quarterly data timely, fully, and accurately, and then corrects or completes the data prior 3 HMDA requires a financial institution to make available to the public, upon request, “loan application register information” in the form required under Regulation C, and requires the Bureau to determine if deletions from the information are appropriate to protect applicants’ and borrowers’ privacy interests or to protect financial institutions from liability under privacy laws. 12 USC 304(j). Prior to being disclosed to the public, LARs must be modified to remove loan application register information that the Bureau determines should be deleted. 4 See Disclosure of Loan-Level HMDA Data, 84 FR 649 (Jan. 31, 2019) 19 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
to its annual submission. 12 CFR 1003.6(c)(2). For more information regarding the enforcement provisions of the HMDA Rule, see Section 7. 20 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
3.1.1 Depository financial institutions
Under the HMDA Rule, effective January 1, 2018, a bank, savings association, or credit union is a Depository Financial Institution, a Financial Institution, and subject to Regulation C if it meets ALL5 of the following:
b. Is federally regulated; or
c. Originated at least one Home Purchase Loan or Refinancing of a Home Purchase Loan
that was secured by a first lien on a one-to-four-unit Dwelling and also (i) was insured, guaranteed or supplemented by a Federal agency or (ii) was intended for sale to Fannie Mae or Freddie Mac. 12 CFR 1003.2(g)(1)(iv).
5. Loan-Volume Thresholds. The bank, savings association, or credit union meets or
exceeds either the loan-volume threshold for Closed-End Mortgage Loans or the loanvolume threshold for Open-End Lines of Credit in each of the two preceding calendar years. Effective January 1, 2018 through June 30, 2020, the loan-volume threshold for Closed-End Mortgage Loans is 25 Closed-End Mortgage Loans, and effective July 1, 2020, the loanvolume threshold for Closed-End Mortgage Loans is 100 Closed-End Mortgage Loans. Effective January 1, 2018 through December 31, 2021, the loan-volume threshold for OpenEnd Lines of Credit is 500 Open-End Lines of Credit, and effective January 1, 2022, the loan-volume threshold for Open-End Lines of Credit is 200 Open-End Lines of Credit. When the bank, savings association, or credit union determines whether it meets these loanvolume thresholds, it does not count transactions excluded by 12 CFR 1003.3(c)(1) through (10) and (13). 12 CFR 1003.2(g)(1)(v). These Excluded Transactions are discussed below in Section
4.1.2 in paragraphs 1 through 10 and in paragraph 13. For more information on Closed-End
Mortgage Loans, Open-End Lines of Credit, and Excluded Transactions, see Section 4.1. When determining if it meets the loan-volume thresholds, a bank, savings association, or credit union only counts Closed-End Mortgage Loans and Open-End Lines of Credit that it originated. Only one institution is deemed to have originated a specific Closed-End Mortgage Loan or Open-End Line of Credit under the HMDA Rule, even if two or more institutions are involved in the origination process. Only the institution that is deemed to have originated the transaction under the HMDA Rule counts it for purposes of the loan-volume threshold. Comments 2(g)-5; see also comments 4(a)-2 through -4. For more information on how to determine whether an institution is deemed to have originated a transaction under the HMDA Rule, see Section 4.2.3. The HMDA Rule also includes a separate test to ensure that Financial Institutions that meet only the Closed-End Mortgage Loan threshold are not required to report their Open-End Lines of Credit, and that Financial Institutions that meet only the Open-End Line of Credit threshold are not required to report their Closed-End Mortgage Loans. 12 CFR 1003.3(c)(11) and (12). For more information, see Section 4.1.2. 23 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
3.1.2 Nondepository financial institutions
Under the HMDA Rule, effective January 1, 2018, a for-profit mortgage-lending institution (other than a bank, savings association, or credit union) is a Nondepository Financial Institution, a Financial Institution, and subject to Regulation C if it meets BOTH6 of the following:
and paragraph 13. For more information on Closed-End Mortgage Loans, Open-End Lines of Credit, and Excluded Transactions, see Section 4.1. When determining if it meets the loan-volume thresholds, a mortgage-lending institution only counts Closed-End Mortgage Loans and Open-End Lines of Credit that it originated. Only one institution is deemed to have originated a specific Closed-End Mortgage Loan or Open-End Line of Credit under the HMDA Rule, even if two or more institutions are involved in the origination process. Only the institution that is deemed to have originated the transaction under the HMDA Rule counts it for purposes of the loan-volume threshold. Comment 2(g)-5. See also comments 4(a)-2 through -4. For more information on how to determine whether an institution is deemed to have originated a transaction under the HMDA Rule, see Section 4.2.3. The HMDA Rule also includes a separate test to ensure that Financial Institutions that meet only the Closed-End Mortgage Loan threshold are not required to report their Open-End Lines of Credit, and that Financial Institutions that meet only the Open-End Line of Credit threshold are not required to report their Closed-End Mortgage Loans. 12 CFR 1003.3(c)(11) and (12). For more information, see Section 4.1.2.
3.2 Exempt institutions
Regulation C provides that Financial Institutions may apply for an exemption from coverage, and the HMDA Rule does not change this provision. Specifically, the Bureau may exempt a State-chartered or State-licensed Financial Institution if the Bureau determines that the Financial Institution is subject to a State disclosure law that contains requirements substantially similar to those imposed by Regulation C and adequate enforcement provisions. Any Statelicensed or State-chartered Financial Institution or association of such institutions may apply to the Bureau for an exemption. An exempt institution shall submit the data required by State law to its State supervisory agency. 12 CFR 1003.3(a). A Financial Institution that loses its exemption must comply with Regulation C beginning with the calendar year following the year for which it last reported data under the State disclosure law. 12 CFR 1003.3(b). 25 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Closed-End Mortgage Loan or an Open-End Line of Credit is an Excluded Transaction, it is not a Covered Loan, and the Financial Institution is not required to report the transaction. If the loan or line of credit is a Closed-End Mortgage Loan or an Open-End Line of Credit and is not an Excluded Transaction, the Financial Institution may be required to report information related to the transaction. See Sections 4.2 and 4.3.
4.1.1 Closed-end mortgage loans and open-end lines of
credit
A Closed-End Mortgage Loan is:
1. An extension of credit;
2. Secured by a lien on a Dwelling; and
3. Not an Open-End Line of Credit. 12 CFR 1003.2(d).
An Open-End Line of Credit is:
1. An extension of credit;
2. Secured by a lien on a Dwelling; and
3. An open-end credit plan for which:
a. The lender reasonably contemplates repeated transactions; b. The lender may impose a finance charge from time-to-time on an outstanding unpaid balance; and
c. The amount of credit that may be extended to the borrower during the term of the plan
(up to any limit set by the lender) is generally made available to the extent that any outstanding balance is repaid. 12 CFR 1003.2(o); 12 CFR 1026.2(a)(20). 27 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Financial Institutions may rely on Regulation Z, 12 CFR 1026.2(a)(20),7 and its official commentary when determining whether a transaction is extended under a plan for which the lender reasonably contemplates repeated transactions, the lender may impose a finance charge from time-to-time on an outstanding unpaid balance, and the amount of credit that may be extended to the borrower during the term of the plan is generally made available to the extent that any outstanding balance is repaid. A business-purpose transaction that is exempt from Regulation Z but is otherwise open-end credit under Regulation Z, 12 CFR 1026.2(a)(20), would be an Open-End Line of Credit under the HMDA Rule if it is an extension of credit secured by a lien on a Dwelling and is not an Excluded Transaction. Comment 2(o)-1.
4.1.1.1 Extension of credit
A closed-end loan or open-end line of credit is not a Closed-End Mortgage Loan or an Open-End Line of Credit under the HMDA Rule unless it involves an extension of credit. Depending on the facts and circumstances, some transactions completed pursuant to installment sales contracts, such as some land contracts, may not be Closed-End Mortgage Loans because no credit is extended. Comment 2(d)-2. Individual draws on an Open-End Line of Credit are not separate extensions of credit. Comment 2(o)-2. Under the HMDA Rule, an “extension of credit” generally requires a new debt obligation. Comment 2(d)-2. Thus, for example, a loan modification where the existing debt obligation is not satisfied and replaced is not generally a Covered Loan (i.e., Closed-End Mortgage Loan or Open-End Line of Credit) under the HMDA Rule. Except as described below, if a transaction modifies, renews, extends, or amends the terms of an existing debt obligation, but the existing debt obligation is not satisfied and replaced, the transaction is not a Covered Loan. It is important to note that the HMDA Rule defines the phrase “extension of credit” differently than Regulation B, 12 CFR part 1002.8 Comment 2(d)-2 and 2(o)-2. The HMDA Rule provides two narrow exceptions to the requirement that an “extension of credit” involve a new debt obligation. The exceptions are designed to capture transactions that 7 Regulation Z, 12 CFR part 1026, implements the Truth in Lending Act. 8 Regulation B, 12 CFR part 1002, implements the Equal Credit Opportunity Act. 28 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
the Bureau believes are substantially similar to new debt obligations and should be treated as such. First, the HMDA Rule maintains Regulation C’s coverage of loan assumptions, even if no new debt obligation is created. A loan assumption is a transaction in which a Financial Institution enters into a written agreement accepting a new borrower in place of an existing borrower as the obligor on an existing debt obligation. The HMDA Rule clarifies that, under Regulation C, assumptions include successor-in-interest transactions in which an individual succeeds the prior owner as the property owner and then assumes the existing debt secured by the property. Assumptions are extensions of credit under the HMDA Rule even if the new borrower merely assumes the existing debt obligation and no new debt obligation is created. Comment 2(d)-2.i. Second, the HMDA Rule provides that a transaction completed pursuant to a New York State consolidation, extension, and modification agreement and classified as a supplemental mortgage under New York Tax Law Section 255, such that the borrower owes reduced or no mortgage recording taxes, (New York CEMA) is an extension of credit under the HMDA Rule. However, the HMDA Rule also provides that certain transactions providing new funds that are consolidated into a New York CEMA are excluded from the HMDA reporting requirements. Comment 2(d)-2.ii. See Section 4.1.2 for additional information on the exclusion for certain transactions consolidated into a New York CEMA.
4.1.1.2 Secured by a lien on a dwelling
A loan is not a Closed-End Mortgage Loan and a line of credit is not an Open-End Line of Credit unless it is secured by a lien on a Dwelling. A Dwelling is a residential structure. There is no requirement that the structure be attached to real property or that it be the applicant’s or borrower’s residence. Examples of Dwellings include:
Examples: A landlord obtains a closed-end mortgage loan from a Financial Institution and uses the proceeds to improve five separate Dwellings, each with one individual unit, located in different parts of a town. The loan is secured by the five separate Dwellings, but is not secured by a Multifamily Dwelling.
6. Individual condominium and cooperative units;
7. Manufactured Homes9 or other factory-built homes; and
8. Multifamily residential structures or communities, such as apartment buildings,
condominium complexes, cooperative buildings or housing complexes, and Manufactured Home communities. 12 CFR 1003.2(f); comments 2(f)-1 and -2. A Dwelling is not limited to a structure that has four or fewer units and includes a Multifamily Dwelling, which is a Dwelling that contains five or more individual dwelling units. A Multifamily Dwelling includes a Manufactured Home community. A loan is not secured by a Multifamily Dwelling for purposes of the HMDA Rule merely because it is secured by five or more individual units. In order for a loan to be secured by a Multifamily Dwelling, the Dwelling must contain five or more individual units. See comment 2(n)-3 for examples of when a loan is and is not secured by a Multifamily Dwelling. An investor obtains a closed-end mortgage loan from a Financial Institution and uses the proceeds to purchase ten individual condominium units in a 100-unit condominium complex. The loan is secured by the ten individual units, but not by the entire condominium complex. The loan is secured by the ten separate Dwellings, but is not secured by a Multifamily Dwelling. A loan related to a Manufactured Home community is secured by a Dwelling even if it is not secured by any individual Manufactured Homes, but is secured only by the land that constitutes 9 A Manufactured Home is a residential structure that satisfies the definition of “manufactured home” in the U.S. Department of Housing and Urban Development’s (HUD’s) regulations, 24 CFR 3280.2, for establishing manufactured home construction and safety standards. 12 CFR 1003.2(l). A modular home or factory-built home that does not meet HUD’s regulations is not a Manufactured Home under the HMDA Rule. A Manufactured Home will generally bear a HUD Certification Label and data plate noting compliance with the Federal standards. Comment 2(l)-2. 30 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
the Manufactured Home community. However, a loan related to a multifamily residential structure or community other than a Manufactured Home community is not secured by a Dwelling unless it is secured by one or more individual dwelling units. For example, a loan that is secured only by the common areas of a condominium complex or only by an assignment of rents from an apartment building is not secured by a Dwelling. Comment 2(f)-2. The following are not Dwellings:
retains and clarifies existing categories of transactions that are excluded from coverage. It also expands the existing exclusion for agricultural loans, and adds new categories of transactions that are excluded from coverage. Effective January 1, 2018, the following are Excluded Transactions:
A Closed-End Mortgage Loan or an Open-End Line of Credit that a Financial Institution
originates or purchases in a fiduciary capacity, such as a Closed-End Mortgage Loan or an Open-End Line of Credit that a Financial Institution originates or purchases as a trustee. 12 CFR 1003.3(c)(1); comment 3(c)(1).
A Closed-End Mortgage Loan or an Open-End Line of Credit secured by a lien on
unimproved land. 12 CFR 1003.3(c)(2). Generally, a loan or line of credit must be secured by a Dwelling to be a Covered Loan. The HMDA Rule also lists Closed-End Mortgage Loans and Open-End Lines of Credit secured only by vacant or unimproved land as Excluded Transactions. However, a loan or line of credit secured by a lien on unimproved land is deemed to be secured by a Dwelling (and might not be excluded) if the Financial Institution knows, based on information that it receives from the applicant or borrower at the time the Application is received or the credit decision is made, that the proceeds of that loan or credit line will be used within two years after closing or account opening to construct a Dwelling on, or to purchase a Dwelling to be placed on, the land. Comment 3(c)(2)-1. 32 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
A Closed-End Mortgage Loan or an Open-End Line of Credit that is temporary financing. A
transaction is excluded as temporary financing if it is designed to be replaced by separate permanent financing extended to the same borrower at a later time. The separate permanent financing may be extended by any lender (i.e., by either the lender that extended the temporary financing or another lender). A construction-only loan or line of credit is considered temporary financing and excluded under the HMDA Rule if the loan or line of credit is extended to a person exclusively to construct a Dwelling for sale. Comment 3(c)(3)-2. Examples: Ficus Bank extends a bridge or swing loan to finance a borrower’s down payment for a home purchase. The borrower will pay off the bridge or swing loan with funds from the sale of his or her existing home and obtain permanent financing from Ficus Bank at that time. The bridge or swing loan is excluded as temporary financing. Ficus Bank extends a construction loan to a borrower to finance construction of the borrower’s Dwelling. The borrower will obtain a new extension of credit for permanent financing of the Dwelling from either Ficus Bank or another lender. Ficus Bank renews the construction loan several times before the borrower obtains a new extension of credit from another lender for permanent financing. The construction loan is excluded as temporary financing. Ficus Bank extends a construction loan to a borrower to finance construction of the borrower’s Dwelling. The construction loan will automatically convert to permanent financing after the construction phase is complete. The construction loan is not temporary financing because it is not designed to be “replaced by” separate permanent financing. Ficus Bank extends a nine-month loan to an investor, who uses the loan proceeds to purchase a home, renovate it, and sell it before the loan term expires. The loan is not temporary financing because it is not designed to be “replaced by” separate permanent financing.
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. 12 CFR 1003.3(c)(4); comment 3(c)(4)-1. 33 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
The purchase solely of the right to service Closed-End Mortgage Loans or Open-End Lines of
Credit. 12 CFR 1003.3(c)(5).
The purchase of a Closed-End Mortgage Loan or an Open-End Line of Credit as part of a
merger or acquisition or as part of the acquisition of all of a Branch Office’s assets and liabilities. 12 CFR 1003.3(c)(6); comment 3(c)(6)-1. For more information on mergers and acquisitions under the HMDA Rule, see Section 8.
A Closed-End Mortgage Loan or an Open-End Line of Credit, or an Application for a ClosedEnd Mortgage Loan or Open-End Line of Credit, for which the total dollar amount is less
than $500. 12 CFR 1003.3(c)(7).
The purchase of a partial interest in a Closed-End Mortgage Loan or an Open-End Line of
Credit. 12 CFR 1003.3(c)(8); comment 3(c)(8)-1.
A Closed-End Mortgage Loan or an Open-End Line of Credit if the proceeds are used
primarily for agricultural purposes or if the Closed-End Mortgage Loan or Open-End Line of Credit is secured by a Dwelling that is located on real property that is used primarily for agricultural purposes. 12 CFR 1003.3(c)(9); comment 3(c)(9)-1. The HMDA Rule directs Financial Institutions to Regulation Z’s official commentary for guidance on what is an agricultural purpose. Regulation Z’s official commentary states that agricultural purposes include planting, propagating, nurturing, harvesting, catching, storing, exhibiting, marketing, transporting, processing, or manufacturing food, beverages, flowers, trees, livestock, poultry, bees, wildlife, fish or shellfish by a natural person engaged in farming, fishing, or growing crops, flowers, trees, livestock, poultry, bees or wildlife. See comment 3(a)-8 in the official interpretations of Regulation Z, 12 CFR part 1026. 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)-1.
A Closed-End Mortgage Loan or an Open-End Line of Credit that is or will be made
primarily for business or commercial purposes, unless it is a Home Improvement Loan, a Home Purchase Loan, or a Refinancing. 12 CFR 1003.3(c)(10). 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. For more information on determining whether a loan or line of credit is a Home Purchase Loan, Home Improvement Loan, or Refinancing, see Section 5.7. The HMDA Rule provides that, if a Closed-End Mortgage Loan or an Open-End Line of Credit is deemed to be primarily for a business, commercial, or organizational purposes 34 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
under Regulation Z, 12 CFR 1026.3(a) and its official commentary, then the loan or line of credit also is deemed to be primarily for a business or commercial purpose under the HMDA Rule. Comment 3(c)(10)-2. For more information and examples of business-purpose or commercial-purpose transactions that are Covered Loans, see comment 3(c)(10)-3 and -4.
11. A Closed-End Mortgage Loan if the Financial Institution originated fewer than the
applicable threshold forClosed-End Mortgage Loans in either of the two preceding calendar years. 12 CFR 1003.3(c)(11); comment 3(c)(11)-1. Effective January 1, 2018 until June 30, 2020, the applicable threshold is 25 Closed-End Mortgage Loans, and effective July 1, 2020, the applicable threshold is 100 Closed-End Mortgage Loans. A Financial Institution is not required to collect, record, or report Closed-End Mortgage Loans if it originated fewer than the applicable theshold in either of the two preceding calendar years. However, the Financial Institution may still be required to collect and report information regarding OpenEnd Lines of Credit, depending on the number of Open-End Lines of Credit it originates in each of the preceding two calendar years. For more information on how to determine if a Financial Institution “originated” a particular loan when multiple entities are involved in the transaction, see Section 4.2.3. A Financial Institution may report applications for, originations of, and purchases of Closed-End Mortgage Loans that are excluded transactions under 12 CFR 1003.3(c)(11). However a Financial Institution that chooses to report such excluded applications, originations, and purchases must report all such applications it received for Closed-End Mortgage Loans, all Closed-End Mortgage Loans it originates, and all Closed-End Mortgage Loans it purchases that would otherwise be Covered Loans for a given calendar year. 12 CFR 1003.3(c)(11). Effective January 1, 2018, Regulation B permits a Financial Institution to collect information regarding the ethnicity, race, and sex of an applicant for a Closed-End Mortgage Loan that is an excluded transaction under 12 CFR 1003.3(c)(11), if the Financial Institution submits HMDA data concerning such Closed-End Mortgage Loans and applications or if it submitted such HMDA data for any of the preceding five calendar years. See the final rule issued on September 20, 2017. When an institution determines whether it meets the loan-volume thresholds, it does not count transactions excluded by 12 CFR 1003.3(c)(1) through (10) and (13). 12 CFR 1003.2(g)(2)(ii). These Excluded Transactions are discussed in this
Section 4.1.2 in paragraphs 1 through 10 and
paragraph 13. When determining if it meets the loan-volume thresholds, a Financial Institution only counts Closed-End Mortgage Loans or Open-End Lines of Credit, as applicable, that it originated. 35 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
other laws must be reported if they are Covered Loans and are not subject to another exclusion. Comment 3(c)(13)-1. New funds provided in advance of being consolidated into a New York CEMA classified as a supplemental mortgage under New York Tax Law section 255 are reported only insofar as they form part of the total amount of the reported New York CEMA. They are not reported as a separate amount. If a New York CEMA that consolidates an excluded preliminary transaction is carried out in a transaction involving an assumption, the Financial Institution reports the New York CEMA and does not report the preliminary transaction separately. Comment 3(c)(13)-1.
4.2 Reportable activity
Once a Financial Institution has determined whether a transaction involves a Covered Loan, it must determine whether it has engaged in activity that obligates it to report information about the transaction. Generally, a Financial Institution is required to report information for actions taken on Applications (as that term is defined below) for Covered Loans, originations of Covered Loans, and purchases of Covered Loans. If a Financial Institution receives an Application and that Application results in the Financial Institution originating a Covered Loan, the Financial Institution reports the origination of the Covered Loan, and does not separately report the Application. For more information on when to report information regarding Applications and Covered Loans, see Sections 4.2.1 and 4.2.2. There are special rules that apply if multiple entities are involved in the transaction. These special rules are discussed in Section 4.2.3. There are also partial exemptions that reduce the amount of information that certain Financial Institutions are required to report for a transaction involving a Covered Loan (i.e., an Application for, an origination of, or a purchase of a Covered Loan). These partial exemptions are discussed in Section 4.3.
4.2.1 Applications
For purposes of the HMDA Rule, an Application is: (a) an oral or written request (b) for a Covered Loan (c) that is made in accordance with procedures the Financial Institution uses for the type of credit requested. 12 CFR 1003.2(b)(1). 37 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
This definition of Application is similar to the Regulation B definition, except that prequalification requests10 are not Applications under the HMDA Rule. Interpretations that appear in the official commentary to Regulation B are generally applicable to the definition of Application under the HMDA Rule, except for those interpretations that include a prequalification request within the definition of Application. Comment 2(b)-1. Under the HMDA Rule, a request for a preapproval may be treated differently than a request for a prequalification for certain types of loans. The determination of whether a request is a prequalification request (which is not an Application) or a preapproval request (which might be an Application) is based on the HMDA Rule, not on the labels that an institution uses or interpretations of other regulations, such as Regulation B. A preapproval request is an Application under the HMDA Rule if the request is:
1. For a Home Purchase Loan;
2. Not secured by a Multifamily Dwelling;
3. Not for an Open-End Line Credit or for a Reverse Mortgage;11 and
4. Reviewed under a Preapproval Program (see definition of Preapproval Program
immediately below). 12 CFR 1003.2(b)(2).
A Preapproval Program for purposes of the HMDA Rule is a program in which the Financial Institution:
1. Conducts a comprehensive analysis of the applicant’s creditworthiness (including income
verification), resources, and other matters typically reviewed as part of the Financial Institution’s normal credit evaluation program; and then 10 Generally, a prequalification request is a request (other than a preapproval request) by a prospective loan applicant for a preliminary determination of whether the prospective loan applicant would likely qualify for credit under the Financial Institution’s standards, or for a determination of the amount of credit for which the prospective applicant would likely qualify. The HMDA Rule does not require a Financial Institution to report prequalification requests, even though these requests may constitute “applications” under Regulation B. Comment 2(b)-2. 11 A Reverse Mortgage is a Closed-End Mortgage Loan or an Open-End Line of Credit that is a reverse mortgage transaction as defined in Regulation Z, but without regard to whether the loan or line is secured by a principal dwelling. 12 CFR 1003.2(q). 38 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
2. Issues a written commitment that: (a) is for a Home Purchase Loan; (b) is valid for a
designated period of time and up to a specified amount, and (c) is subject only to specifically permitted conditions. 12 CFR 1003.2(b)(2). The written commitment issued as part of the Preapproval Program can be subject to only the following types of conditions:
1. Conditions that require the identification of a suitable property;
2. Conditions that require that no material change occur regarding the applicant’s financial
condition or creditworthiness prior to closing; and
3. Limited conditions that (a) are not related to the applicant’s financial condition or
creditworthiness and (b) the Financial Institution ordinarily attaches to a traditional home mortgage application. Examples of conditions ordinarily attached to a traditional home mortgage application include requiring an acceptable title insurance binder or a certificate indicating clear termite inspection and, if the applicant plans to use the proceeds from the sale of the applicant’s present home to purchase a new home, a settlement statement showing adequate proceeds from the sale of the present home. 12 CFR 1003.2(b)(2); comment 2(b)-3. A program that a Financial Institution describes as a “preapproval program” but that does not satisfy the HMDA Rule definition is not a Preapproval Program for purposes of the HMDA Rule. Comment 2(b)-3. If a Financial Institution does not regularly use procedures to consider requests but instead considers requests on an ad hoc basis, the Financial Institution is not required to treat the ad hoc requests as having been reviewed under a Preapproval Program. However, a Financial Institution should be generally consistent in following uniform procedures for considering such ad hoc requests. Comment 2(b)-3. Under the HMDA Rule, a Financial Institution must collect, record, and report data regarding an Application it receives if: (1) the Application did not result in the Financial Institution originating a Covered Loan; and (2) the Financial Institution took action on the Application or the applicant withdrew the Application while the Financial Institution was reviewing it. For example, a Financial Institution reports information regarding an Application that it denied, that it approved but the applicant did not accept, or that it closed for incompleteness. 12 CFR 1003.4(a) and 1003.5(a); comment 4(a)-1. If the Application results in the Financial Institution originating a Covered Loan, the Financial Institution reports the Covered Loan, not 39 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
the Application itself. For more information on reporting Applications when multiple entities are involved, see Section 4.2.3. Although requests under Preapproval Programs are Applications, a Financial Institution reports data regarding a request under a Preapproval Program only if the preapproval request is denied or approved but not accepted. A Financial Institution will also report a request under a Preapproval Program that results in the Financial Institution originating a Home Purchase Loan, but it will be reported as an originated Covered Loan. Comment 4(a)-1.ii. A Financial Institution reports the data for an Application, including a reportable preapproval request, on the LAR for the calendar year during which it takes action even if the Financial Institution received the Application in a previous calendar year. Comment 4(a)-1.iv.
4.2.2 Originations and purchases of covered loans
A Financial Institution must collect, record, and report information regarding originations and purchases of Covered Loans. For more information on when a Financial Institution reports the origination or purchase of a Covered Loan when multiple entities are involved, see Section 4.2.3. A purchase includes a repurchase of a Covered Loan, regardless of whether the Financial Institution chose to repurchase the Covered Loan or was required to repurchase it because of a contractual obligation, and regardless of whether the repurchase occurred within the same calendar year that the Covered Loan was originated or in a different calendar year. Comment 4(a)-5. A purchase does not include a temporary transfer of a Covered Loan to an interim funder or warehouse creditor as part of an interim funding agreement under which the Financial Institution that originated the Covered Loan is obligated to repurchase it for sale to a subsequent investor. Such funding agreements are often referred to as “repurchase agreements” and are sometimes used as the functional equivalents of warehouse lines of credit. Comment 4(a)-5.
4.2.3 Transactions involving multiple entities
Only one Financial Institution reports the origination of a Covered Loan. If more than one institution is involved in the origination of a Covered Loan, the institution that makes the credit decision approving the Application before loan closing or account opening is responsible for 40 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
reporting the origination of the Covered Loan. It is not relevant whether the loan closed in the reporting Financial Institution’s name. If more than one institution approved an Application prior to loan closing or account opening and one of those institutions purchased the Covered Loan after closing or account opening, the institution that purchased the Covered Loan after closing or account opening is responsible for reporting the origination of the Covered Loan. Comment 4(a)-2. If a Financial Institution reports a Covered Loan as an origination, it reports all of the information required to be reported for the origination of a Covered Loan, even if the Covered Loan was not initially payable to the Financial Institution that is reporting the Covered Loan as an origination. Comment 4(a)-2. When reporting a Covered Loan as an origination, a Financial Institution cannot rely on exceptions or exclusions that apply to purchased Covered Loans, but that do not apply to originations of Covered Loans. If a Financial Institution and other parties review the same Application and the Financial Institution is not responsible for reporting the origination of the resulting Covered Loan, the Financial Institution reports the actions that the Financial Institution took on the Application. For example, the Financial Institution is still required to report the Application if the Financial Institution denied the Application or if the Financial Institution approved the Application but the applicant did not accept the loan. The Financial Institution is also required to report the Application if the Financial Institution was reviewing the Application when it was withdrawn or the file was closed for incompleteness. Comment 4(a)-2.ii. If a Financial Institution makes a credit decision on a Covered Loan or Application through the actions of an agent, the Financial Institution reports the Application or Covered Loan. State law determines whether one party is the agent of another party. Comment 4(a)-4. The following examples illustrate when a Financial Institution reports certain transactions related to Covered Loans involving multiple entities. 41 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Examples: Ficus Bank receives an Application for a Covered Loan from an applicant and forwards that Application to Pine Bank, which reviews and approves the Application prior to closing. The loan closes in Ficus Bank’s name. Pine Bank purchases the loan from Ficus Bank after closing. Pine Bank is not acting as Ficus Bank’s agent when it reviews and approves the Application. Because Pine Bank made the credit decision prior to closing, Pine Bank reports the transaction as an originated Covered Loan, not as a purchased Covered Loan. Ficus Bank does not report the transaction. Ficus Mortgage Company receives an Application for a Covered Loan from an applicant and forwards that Application to Pine Bank, which reviews and denies the Application before the loan would have closed. Pine Bank is not acting as Ficus Mortgage Company’s agent when it reviews and denies the Application. Because Pine Bank makes the credit decision, Pine Bank reports the Application as denied. Ficus Mortgage Company does not report the Application. If, under the same facts, the Application is withdrawn before Pine Bank makes a credit decision, Pine Bank reports the Application as withdrawn, and Ficus Mortgage Company does not report the Application. Ficus Bank receives an Application for a Covered Loan from an applicant and approves the Application. Ficus Bank closes the loan in its name. Ficus Bank is not acting as Pine Bank’s agent when it approves the Application or closes the loan. Pine Bank does not review the Application before closing. Pine Bank purchases the Covered Loan from Ficus Bank. Ficus Bank reports the loan as an originated Covered Loan. Pine Bank reports the loan as a purchased Covered Loan. Pine Bank reviews an Application and makes a credit decision to approve a Covered Loan using the underwriting criteria provided by Ficus Mortgage Company. Pine Bank is not acting as Ficus Mortgage Company’s agent, and no one acting on behalf of Ficus Mortgage Company reviews the Application or makes a credit decision prior to closing. Pine Bank reports the Application or, if the Application results in a Covered Loan, it reports the loan as an originated Covered Loan. If the Application results in a Covered Loan and Ficus Mortgage Company purchases it after closing, Ficus Mortgage Company reports the loan as a purchased Covered Loan. 42 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Examples (cont’d): Ficus Bank receives an Application for a Covered Loan and forwards it to Aspen Bank and Pine Bank. Ficus Bank makes a credit decision, acting as Elm Bank’s agent, and approves the Application. Pine Bank makes a credit decision and denies the Application. Aspen Bank makes a credit decision approving the Application. The applicant does not accept the loan from Elm Bank. The applicant accepts the loan from Aspen Bank and credit is extended. Aspen Bank reports the loan as an originated Covered Loan. Pine Bank reports the Application as denied. Elm Bank reports the Application as approved but not accepted. Ficus Bank does not report the Application.
4.3 Partial exemptions
The 2018 Act created partial exemptions from some of the HMDA Rule’s requirements. Only certain Financial Institutions are eligible for these partial exemptions, and only certain Covered Loans and Applications are covered under each of the two partial exemptions. If a Covered Loan or Application is covered by a partial exemption, the Financial Institution is not required to collect, record, and report specific data points. The partial exemptions were effective May 24, 2018, and apply to the collection, recording, and reporting of HMDA data on or after that date. As discussed in Section 4.3.1, only a Financial Institution that is an insured credit union or an insured depository institution is eligible for the partial exemptions. Additionally, as discussed in Section 4.3.1., an insured depository institution must not have a less than satisfactory examination history under the Community Reinvestment Act (CRA) to be eligible for the partial exemptions. Because the partial exemptions were not effective at the beginning of 2018, it is possible that a Financial Institution may have collected and recorded information that it was not required to report with its 2018 HMDA data. If a Financial Institution that is eligible for a partial exemption collected and recorded data points that it is not required to report due to a partial exemption, the institution may choose to report all, some, or none of those data points for a Covered Loan or Application covered by a partial exemption. If the institution opts to voluntarily report a data point for a transaction covered by a partial exemption, it must report all data fields that are part of that data point. 43 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
As discussed in Section 4.3.2, each of the partial exemptions applies only to certain Covered Loans and Applications and only if an applicable loan-volume threshold is met. An insured depository institution or insured credit union must meet the applicable loan-volume threshold for Closed-End Mortgage Loans in order for a partial exemption to apply to its Closed-End Mortgage Loan transactions, and the applicable loan-volume threshold for Open-End Lines of Credit in order for a partial exemption to apply to its Open-End Line of Credit transactions. The 2018 Act created partial exemptions, not complete exclusions. Therefore, if a Covered Loan or Application is covered by a partial exemption, the Financial Institution is required to collect, record, and report 22 data points, but is exempt from collecting, recording, and reporting 26 data points for that transaction. Additionally, the Financial Institution may voluntarily report any or all of these 26 data points for a Covered Loan or Application covered by a partial exemption. Section 4.3.3 discusses the scope of the partial exemptions and includes tables that list the data points that are and are not required to be collected, recorded, and reported if a partial exemption applies to a Covered Loan or Application.
4.3.1 Eligible Financial Institutions
In order to be eligible for a partial exemption, a Financial Institution must be an:
1. “Insured credit union” as defined in Section 101 of the Federal Credit Union Act, 12
U.S.C. 1752; or
2. “Insured depository institution” as defined in Section 3 of the Federal Deposit Insurance
Act, 12 U.S.C. 1813. 12 C.F.R. 1003.3(d)(1)(i) and (ii).
Additionally, a Financial Institution that satisfies the definition of “insured depository institution” must not have a negative CRA examination history in order to be eligible for a partial exemption. More specifically, an insured depository institution must not have received either of the following:
1. A rating of “need to improve record of meeting community credit needs” during each of
its two most recent examinations under Section 807(b)(2) of the CRA; or
2. A rating of “substantial noncompliance in meeting community credit needs” on its most
recent examination under Section 807(b)(2) of the CRA.
44 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
The CRA ratings used to determine if an insured depository institution is eligible for a partial exemption are the institution’s two most recent ratings as of December 31 of the preceding year. A Financial Institution that does not satisfy either the definition of an “insured credit union” or an “insured depository institution” may not rely on either of the partial exemptions, even if it satisfies the loan-volume thresholds discussed in Section 4.3.2. Similarly, an insured depository institution that does not satisfy the criteria regarding CRA examination history cannot rely on either of the partial exemptions.
4.3.2 Loan-volume thresholds
In order for a partial exemption to apply to an Application or Covered Loan (including a purchased Covered Loan), an eligible Financial Institution (i.e., an insured depository institution that does not have a negative CRA examination history or an insured credit union) must also meet the applicable loan-volume threshold. A partial exemption applies to an eligible Financial Institution’s Applications for, originations of, and purchases of ClosedEnd Mortgage Loans if the institution originated fewer than 500 Closed-End Mortgage Loans in each of the two preceding calendar years. A partial exemption applies to an eligible Financial Institution’s Applications for, originations of, and purchases of Open-End Lines of Credit if the institution originated fewer than 500 Open-End Lines of Credit in each of the two preceding calendar years. However, during 2018, 2019, 2020, and 2021, a Financial Institution is not required to collect or report any information for Open-End Lines of Credit if the institution originated fewer than 500 OpenEnd Lines of Credit during either of the two preceding calendar years. This is because, during 2018, 2019, 2020, and 2021, Open-End Lines of Credit are Excluded Transactions for a Financial Institution that originated fewer than 500 of them during either of the two preceding calendar years. See the discussion regarding Excluded Transactions in Section 4.1.2. When a Financial Institution determines whether it meets the loan-volume thresholds, it does not count transactions excluded by 12 CFR 1003.3(c)(1) through (10) and (13). 12 CFR 1003.2(g)(2)(ii). These Excluded Transactions are discussed in
Section 4.1.2 in paragraphs 1 through 10 and
paragraph 13. When determining if it meets either of the loan-volume thresholds, a Financial Institution only counts Closed-End Mortgage Loans or Open-End Lines of Credit, as applicable, that it originated. 45 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
The partial exemption for Closed-End Mortgage Loans and the partial exemption for Open-End Lines of Credit operate independently of one another. Thus, in a given calendar year, an eligible Financial Institution may be able to rely on one partial exemption but not the other. Example: Ficus Bank is an insured depository institution as defined in Section 3 of the Federal Deposit Insurance Act, and it received satisfactory ratings in its two most recent CRA examinations as of December 31, 2017. In 2016, Ficus Bank originated 400 ClosedEnd Mortgage Loans and 510 Open-End Lines of Credit. In 2017, Ficus Bank originated 490 Closed-End Mortgage Loans and 515 Open-End Lines of Credit. In 2018, a partial exemption applies to Ficus Bank’s Closed-End Mortgage Loan transactions, but a partial exemption does not apply to Ficus Bank’s Open-End Line of Credit transactions. Additionally, because Ficus Bank originated at least 500 Open-End Lines of Credit in both 2016 and 2017, Ficus Bank cannot exclude Open-End Lines of Credit from its reportable transactions in 2018 (i.e., they are not Excluded Transactions as discussed in
Section 4.1.2).
4.3.3 Collecting, recording, and reporting for transactions
covered by a partial exemption
If a partial exemption applies to a Covered Loan or Application (as discussed above), the HMDA Rule does not require the Financial Institution to collect, record, and report some of the data points that the HMDA Rule would otherwise require the institution to collect, record, and report for that transaction. More specifically, if a partial exemption applies to a Covered Loan or Application, a Financial Institution is not required under the HMDA Rule to collect, record, or report the 26 data points listed in the table immediately below. 46 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Data Points Eligible Financial Institutions Need Not Collect or Report under the HMDA Rule For Transactions Covered by a Partial Exemption
Seven of these 26 data points (i.e., property address, credit score, reasons denial, total loan costs or total points and fees, non-amortizing features, application channel, and automated underwriting system) have multiple data fields. If a Financial Institution opts to report a data point with multiple fields, it must report all of the data fields that make up that data point. Property address is one of the data points that a Financial Institution is not required to report if a partial exemption applies to a transaction. If a partial exemption applies for to a Covered Loan or Application, an institution may report state for the transaction without reporting the other data fields that make up the property address data point (i.e., street address, city, and zip code). Comment 3(d)(4)(i)-1. Example: Ficus Bank originates a Covered Loan. A partial exemption applies to the Covered Loan, but Ficus Bank opts to report that the Covered Loan does not have a balloon payment. Balloon payment is one of the data fields for the non-amortizing features data point. The other data fields that make up the non-amortizing features data point are interest-only payments, negative amortization, and other non-amortizing features. Because Ficus Bank chose to report the balloon payment data field, Ficus Bank must also report whether the Covered Loan has interest-only payments, negative amortization, and other non-amortizing features. If a Financial Institution opts not to report a Universal Loan Identifier (ULI) for a Covered Loan or Application that is covered by a partial exemption, the institution must provide a nonuniversal loan identifier as discussed in Section 5.2. If a Financial Institution opts not to report one of the 26 data points other than the ULI, the Financial Institution generally reports that the Covered Loan or Application is exempt from that data point. However, if a data point is not applicable to the particular transaction and the transaction is exempt from that data point, the Financial Institution may choose to report either that the data point is not applicable or that the transaction is exempt from the data point. 48 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Example: Ficus Bank originates a Covered Loan. The sole applicant for the Covered Loan is not a natural person. Because the applicant is not a natural person, Ficus Bank would report the debt-to-income ratio data point as not applicable, unless a partial exemption applies to the Covered Loan. If a partial exemption applies to the Covered Loan, Ficus Bank could report either “not applicable” or “exempt” for the debt-to-income ratio data point. If a Covered Loan or Application is covered by a partial exemption, a Financial Institution must collect, record, and report 22 data points for the Covered Loan or Application. These 22 data points are set forth in the following table.
As discussed above, during 2018,2019, 2020, and 2021, a Financial Institution is not required to collect or report any information for Open-End Lines of Credit if the institution originated fewer than 500 of them during either of the two preceding calendar years. See the discussion regarding Excluded Transactions in Section 4.1.2. For more information on reporting data points if a Covered Loan or Application is covered by a partial exemption, see Section 5 of this guide and the Filing Instructions Guide that incorporates the 2018 HMDA Rule available at http://www.consumerfinance.gov/data-research/hmda/forfilers. 50 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
The HMDA Rule amends the instructions in appendix B and provides a new sample data collection form.
5.1.1 Collection
The instructions in appendix B to the HMDA Rule require a Financial Institution:
To ask an applicant for ethnicity, race, and sex information regardless of whether the
Application is taken in person, by mail, by telephone, or on the internet. A Financial Institution cannot require the applicant to provide this information. When a Financial Institution requests ethnicity and race information from an applicant under the HMDA Rule, it must offer the applicant the option of selecting more than one ethnicity and race and must permit the applicant to self-identify using aggregate categories and disaggregated subcategories. When a Financial Institution requests the applicant’s ethnicity and race, the aggregate categories must be broken down into disaggregated subcategories. For example, the aggregate category of Hispanic or Latino must be broken down into the subcategories of Mexican, Puerto Rican, Cuban, or Other Hispanic or Latino. Similarly, the Asian and Native Hawaiian or Other Pacific Islander categories also must be broken down into their respective disaggregated subcategories. An applicant must be permitted to select one or more race or ethnicity subcategories even if the applicant has not selected a race or ethnicity aggregate category. For example, an applicant could select Mexican even if the applicant has not selected Hispanic or Latino. The applicant must also be permitted to provide certain additional information. For example, an applicant must be permitted to provide a particular Hispanic or Latino ethnicity that is not provided on the collection form. An applicant must be permitted to provide this information even if the applicant has not selected the Other Hispanic or Latino category. Similarly, the applicant must be permitted to provide a particular Asian race or a particular Pacific Islander race that is not provided on the collection form. An applicant must be permitted to provide this information even if the applicant has not selected the Other Asian or Other Pacific Islander category. An applicant must also be permitted to provide a particular American Indian or Alaska Native enrolled or principal tribe even if the applicant has not selected the American Indian or Alaska Native race category. Appendix B to
Part 1003.
For an illustration of the information that a Financial Institution must ask about an applicant’s ethnicity, race, and sex, see the sample data collection form in Attachment A. 52 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
To inform the applicant that: (a) Federal law requires the information be collected in order
to protect consumers and to monitor compliance with Federal statutes that prohibit discrimination against applicants; and (b) if the information is not provided where the Application is taken in person, the Financial Institution is required to note the information on the basis of visual observation or surname.
To collect the applicant’s ethnicity, race, and sex based on visual observation or surname if
the applicant chooses not to provide the information for an Application that is taken in person. Appendix B to Part 1003. For an Application taken in person, there are special requirements if the applicant declines to provide the information regarding ethnicity, race, and sex. The Financial Institution must note that the applicant did not provide the information and then collect the applicant’s ethnicity, race, and sex on the basis of visual observation or surname. When a Financial Institution collects an applicant’s ethnicity, race, and sex on the basis of visual observation or surname, the Financial Institution must select from the following aggregate categories:
ethnicity (Hispanic or Latino; not Hispanic or Latino); race (American Indian or Alaska Native; Asian; Black or African American; Native Hawaiian or Other Pacific Islander; White); sex (male; female). The Financial Institution does not use the disaggregated categories. Only an applicant may self-identify as being of a particular ethnic or racial subcategory. If a Financial Institution accepts an Application through electronic media with a video component, it must treat the Application as taken in person. However, if a Financial Institution accepts an Application through electronic media without a video component, it must treat the Application as accepted by mail. Appendix B to Part 1003. If the applicant (1) begins an Application by mail, internet, or telephone, (2) does not provide the requested information, (3) does not select “I do not wish to provide this information,” and (4) meets with the Financial Institution in person to complete the Application, the Financial Institution must request the applicant’s ethnicity, race, and sex when the Financial Institution meets with the applicant in person. If the applicant does not provide the requested information during the in-person meeting, the Financial Institution must collect the information on the basis of visual observation or surname. If the meeting occurs after the Application process is complete (e.g., at loan closing or account opening), the Financial Institution is not required to obtain the applicant’s ethnicity, race, and sex.
Appendix B to Part 1003.
A Financial Institution may collect the required information regarding the ethnicity, race, and sex of an applicant on an Application form, or on a separate form that refers to the Application 53 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
(sometimes called a collection form). For Applications taken by telephone, a Financial Institution must state the information in the collection form orally. Appendix B to Part 1003. Because the HMDA Rule changes the information that must be included on an Application form or other collection form, Financial Institutions must revise their forms. A Financial Institution must use a revised collection or Application form that includes the disaggregated categories for Applications received on or after January 1, 2018. For more information on collecting the applicant’s ethnicity, race, and sex, see appendix B to the HMDA Rule.
5.1.2 Reporting
A Financial Institution reports the following information about an applicant:
For race, a Financial Institution must report every aggregate race category the applicant selected. If the applicant also selected one or more race subcategories, a Financial Institution must report each race subcategory the applicant selected, up to a combined total of five aggregate race categories and race subcategories. Appendix B to Part 1003. Examples: An applicant selects all five aggregate race categories (i.e., American Indian or Alaska Native, Asian, Black or African American, Native Hawaiian or Other Pacific Islander, and White) and also selects the Chinese race subcategory. Because a Financial Institution must report all of the aggregate race categories that an applicant selects and can only report a combined total of up to five aggregate race categories and race subcategories, Ficus Bank reports only the five aggregate race categories. It does not report the Chinese race subcategory. An applicant selects the White, Asian, and Native Hawaiian or Other Pacific Islander aggregate race categories, and the Korean, Vietnamese, and Samoan race subcategories. The Financial Institution must report the White, Asian, and Native Hawaiian or Other Pacific Islander aggregate race categories. The Financial Institution also reports two of the three race subcategories. The Financial Institution chooses which two race subcategories to report (i.e., Korean and Vietnamese, Korean and Samoan, or Vietnamese and Samoan). An applicant may select the Other Hispanic or Latino ethnicity subcategory, an applicant may provide a particular Hispanic or Latino ethnicity not listed in the standard subcategories, or an applicant may do both. If an applicant provides only a particular ethnicity not listed in the standard subcategories, a Financial Institution is permitted, but not required, to report both the selection of Other Hispanic or Latino in addition to the particular ethnicity that the applicant provided. If an applicant selects Other Hispanic or Latino and provides a particular ethnicity, the Financial Institution reports both Other Hispanic or Latino and the particular ethnicity the applicant provided, (subject to the five ethnicity maximum described above). For purposes of the maximum of five reportable ethnicity categories and subcategories, the Other Hispanic or Latino subcategory and any additional information provided by the applicant together constitute only one selection.
Appendix B to Part 1003.
55 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
An applicant may select the Other Asian race subcategory or Other Pacific Islander race subcategory, an applicant may provide a particular race not listed in the standard subcategories, or an applicant may do both. If an applicant provides only a particular race not listed in the standard subcategories, a Financial Institution is permitted, but not required, to report both the selection of Other Asian or Other Pacific Islander, as applicable, in addition to the particular race that the applicant provided. If an applicant selects Other Asian or Other Pacific Islander and provides a particular race, the Financial Institution reports both Other Asian or Other Pacific Islander, as applicable, and the additional information the applicant provided, subject to the maximum of five. For purposes of the maximum of five reportable race categories and race subcategories, the Other Asian race or Other Pacific Islander race subcategory and additional information provided by the applicant together constitute only one selection. Appendix B to Part 1003. Examples: An applicant selects the category of Hispanic or Latino and provides Dominican as an ethnicity not listed in the standard subcategories. The applicant does not select the Other Hispanic or Latino subcategory or any other ethnicity categories or subcategories. The Financial Institution reports the Hispanic or Latino category and Dominican. It may also report the Other Hispanic or Latino subcategory, but is not required to do so. An applicant selects the White, Asian, and Native Hawaiian or Other Pacific Islander aggregate race categories, as well as the Korean, Vietnamese, Samoan, and Other Asian race subcategories and writes in “Thai” in the space provided on the Application form. The Financial Institution reports two (at its option) of the four race subcategories selected by the applicant (i.e., Korean, Vietnamese, Other Asian-Thai, Samoan) in addition to the three aggregate race categories selected by the applicant. If an applicant selected “I do not wish to provide this information” on a collection or Application form taken by mail or on the internet or stated that he or she did not wish to provide the information for an Application that is taken by telephone, the Financial Institution reports that the information was not provided in a mail, internet, or telephone application. 56 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
If an applicant provided some but not all of the requested information, a Financial Institution reports the information provided by the applicant, whether partial or complete. If an applicant provided complete or partial information but also selected that he or she did not wish to provide the information for an Application that is taken by mail, internet, or telephone, a Financial Institution reports the ethnicity, race, and sex information that the applicant provided. Appendix B to Part 1003. If there are multiple applicants (i.e., an applicant and one or more co-applicants), the Financial Institution reports the ethnicity, race, and sex information for the applicant and the first co-applicant listed on the collection or Application form. If an applicant did not provide the information for an absent co-applicant, the Financial Institution reports that the information was not provided by applicant in mail, internet, or telephone Application for the absent co-applicant. If there is only one applicant, a Financial Institution reports that there is no co-applicant. Appendix B to Part 1003. If a Covered Loan or Application includes a guarantor, a Financial Institution does not report the guarantor’s ethnicity, race, and sex. Appendix B to Part 1003. A Financial Institution may, but is not required to, report an applicant’s ethnicity, race, and sex for purchased Covered Loans. If a Financial Institution chooses not to report the applicant’s ethnicity, race, and sex for a purchased Covered Loan, the Financial Institution reports that the data points are not applicable. Appendix B to Part 1003. If an applicant is not a natural person (e.g., a corporation, partnership, or trust), a Financial Institution reports that the requirement to report ethnicity, race, and sex information is not applicable. However, if an applicant is a natural person and a beneficiary of a trust (for example, the natural person might be relying on income from or collateral owned by a trust), the Financial Institution reports the applicant’s ethnicity, race, and sex information.
Appendix B to Part 1003.
For more information on reporting an applicant’s ethnicity, race, and sex, see appendix B to the HMDA Rule.
2. Age. A Financial Institution reports the applicant’s age (as of the Application date) as the
number of whole years derived from the date of birth shown on the Application form. 12 CFR 1003.4(a)(10)(ii); comment 4(a)(10)(ii)-1. 57 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Example: An applicant provides a date of birth of 01/15/1970 on the Application form that Ficus Bank receives on 01/14/2018. Ficus Bank reports 47 as the applicant’s age. If there are multiple applicants, the Financial Institution reports the age for the applicant and the first co-applicant listed on the Application form. If a Covered Loan or Application includes a guarantor, a Financial Institution does not report the guarantor’s age. Comments 4(a)(10)(ii)-2 and -5. A Financial Institution may, but is not required to, report the age of an applicant for purchased Covered Loans. If a Financial Institution chooses not to report the applicant’s age for a purchased Covered Loan, the Financial Institution reports that the data point is not applicable. 12 CFR 1003.4(b)(2); comment 4(a)(10)(ii)-3. If an applicant is not a natural person (e.g., a corporation, partnership, or trust), a financial institution reports that the data point is not applicable. Comment 4(a)(10)(ii)-4. However, if an applicant is a natural person and a beneficiary of a trust (for example, the natural person might be relying on income from or collateral owned by a trust), the Financial Institution reports the applicant’s age.
3. Income. If a Financial Institution considers income in making its credit decision, it reports
the gross annual income that it relied on in making the credit decision. 12 CFR 1003.4(a)(10)(iii). For Applications that are withdrawn or closed for incompleteness before the Financial Institution makes a credit decision that would have taken income into consideration, the Financial Institution reports the income information relied on in processing the Application at the time that the Application was withdrawn or the file was closed for incompleteness. 12 CFR 1003.4(a)(10)(iii); comment 4(a)(10)(iii)-5. If a Financial Institution relies on only a portion of an applicant’s income in its determination, it reports only the portion of income relied on. Comment 4(a)(10)(iii)-1. If a Financial Institution relies on the income of a co-applicant or cosigner to evaluate creditworthiness, the Financial Institution includes the co-applicant’s or cosigner’s income to the extent relied upon. Comments (a)(10)(iii)-1 and -2. A Financial Institution, however, does not include the income of a guarantor who is only secondarily liable. Comment 4(a)(10)(iii)-1. 58 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Reportable income does not include funds or amounts in addition to income, such as funds derived from underwriting calculations of the potential annuitization or depletion of an applicant’s remaining assets, even if the Financial Institution relied on them when making the credit decision. Actual distributions from retirement accounts or other assets that are relied on by the Financial Institution as income are reported as income. Comment 4(a)(10)(iii)-4. A Financial Institution may, but is not required to, report an applicant’s income for purchased Covered Loans. A Financial Institution reports that the data point is not applicable if it chooses not to report the applicant’s income. Comment 4(a)(10)(iii)-9. A Financial Institution reports that the income data point is not applicable:
a. For a Covered Loan to or an Application from a Financial Institution’s own employee, even though the Financial Institution relied on the employee’s income in making its credit decision; b. For a Covered Loan that is secured by or an Application that was proposed to be secured by a Multifamily Dwelling;
c. If the applicant or co-applicant, if applicable, is not a natural person (e.g., a corporation,
partnership, or trust); or d. If the Financial Institution did not consider or would not have considered income in making the credit decision. 12 CFR 1003.4(a)(10)(iii); comments 4(a)(10)(iii)-3, -6, -7, and -8.
5.2 Universal loan identifier (ULI) or nonuniversal loan identifier
Unless a partial exemption applies, a Financial Institution must report a ULI for a Covered Loan or Application. The ULI:
1. Is a number that a Financial Institution assigns to the Covered Loan or Application.
12 CFR 1003.4(a)(1)(i).
59 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
2. Must begin with the Financial Institution’s Legal Entity Identifier (LEI),14 followed by up
to 23 additional letters and/or numbers that the Financial Institution assigns, and end with a two-character check digit.15 12 CFR 1003.4(a)(1)(i)(A)-(C). Essentially, the ULI is the Financial Institution’s LEI plus a loan or application number plus the two-character check digit (in that order).
3. Cannot include information that could be used to identify the applicant or borrower
directly, such as the applicant’s or borrower’s name, date of birth, Social Security number, official government-issued driver’s license or identification number, alien registration number, government passport number, or employer or taxpayer identification number. Comment 4(a)(1)(i)-2.
4. Must be unique within the Financial Institution and must be used for only one Covered
Loan or Application. Comment 4(a)(1)(i)-1.
To ensure that a ULI is unique within a Financial Institution, the Financial Institution must:
1. Ensure that its branches do not use the same ULI to refer to multiple Covered Loans or
Applications.
2. Assign a new ULI to a Refinancing or Application for Refinancing (i.e., not use the ULI
from the loan that is being refinanced).
A Financial Institution may use a previously reported ULI if an applicant asks the Financial Institution: (a) to reinstate a counteroffer that the applicant did not accept earlier in the same calendar year; or (b) to reconsider an Application that was denied, withdrawn, or closed for incompleteness earlier during the same calendar year. However, a Financial Institution must 14 The LEI is a unique, 20-digit alphanumeric identifier issued by a utility endorsed by the LEI Regulatory Oversight Committee or endorsed or otherwise governed by the Global LEI Foundation or a successor organization. A Financial Institution can go to the Global LEI Foundation website, https://www.gleif.org/services/louservices/issue-new-lei, to obtain an LEI. Regardless of whether a Financial Institution’s transactions are covered by a partial exemption, effective January 1, 2019, the institution must include an LEI with its submission as described in 12 CFR 1003.5(a)(3). See Section 6.2 for more information. 15 The two-character check digit is used to validate the ULI. It is calculated using certain standards published by the International Organization for Standardization (www.iso.org). A check digit tool is available on the Bureau’s website. For more information on the two-character check digit, including the methodology for generating a check digit, see appendix C to the HMDA Rule. 60 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
not use a previously reported ULI if it reinstates or reconsiders an Application that was reported in a prior calendar year. 12 CFR 1003.4(a)(1)(i)(E); comment 4(a)(1)(i)-4. For a purchased Covered Loan, a Financial Institution uses the ULI that was assigned to the Covered Loan by the Financial Institution that previously reported the Covered Loan. 12 CFR 1003.4(a)(1)(i)(D). If the Financial Institution that originated the Covered Loan did not assign a ULI, the Financial Institution that purchases the Covered Loan must assign a ULI, unless a partial exemption applies with respect to the purchase of the Covered Loan. If a partial exemption applies to a Covered Loan or Application, a Financial Institution may either report a ULI for the transaction, as discussed above, or report a nonuniversal loan identifier for the transaction, as discussed below. A non-universal loan identifier:
If a Financial Institution that is not eligible for a partial exemption purchases a Covered Loan for which an insured depository institution or insured credit union has assigned a non-universal loan identifier, the purchasing Financial Institution does not report that non-universal loan identifier. Instead, the purchasing Financial Institution assigns its own ULI.
1. Is assigned by a Financial Institution
to a Covered Loan or Application that is covered by a partial exemption.
2. Is composed of up to 22 characters (i.e., letters, numerals, or a combination of letters and
numerals). A non-universal loan identifier may, but is not required to, include a check digit. However, the non-universal loan identifier cannot be more than 22 characters, including any check digit.
3. Cannot include information that could be used to identify the applicant or borrower
directly, such as the applicant’s or borrower’s name, date of birth, Social Security number, official government-issued driver’s license or identification number, alien registration number, government passport number, or employer or taxpayer identification number.
4. Must be unique within the annual loan/application register in which the Covered Loan or
Application is included.
To ensure that a non-universal loan identifier is unique within a Financial Institution, the Financial Institution must:
61 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
1. Ensure that its branches do not use the same non-universal loan identifier to refer to
multiple Covered Loans or Applications.
2. Assign only one non-universal loan identifier to any particular Covered Loan or
Application. Each non-universal loan identifier must correspond to a single Application and ensuing Covered Loan, if any.
3. Assign a new non-universal loan identifier to a Refinancing or Application for
Refinancing (i.e., not use the non-universal loan identifier or ULI from the loan that is being refinanced). 12 CFR 1003.3(d)(5); comments 3(d)(5)-1, -2.
5.3 Application date
Except for a purchased Covered Loan, a Financial Institution reports the Application date, which is reported as either the date that the Application was received or the date on the Application form. 12 CFR 1003.4(a)(1)(ii). Although a Financial Institution need not choose the same approach for reporting Application date for its entire HMDA submission, it should be generally consistent, such as by routinely using one approach within a particular division of the Financial Institution or for a category of loans. Comment 4(a)(1)(ii)-1. If a Financial Institution chooses to report the date shown on the Application form and the Financial Institution retains multiple versions of the form, the Financial Institution reports the date shown on the first form it received that constitutes an Application under the HMDA Rule. Comment 4(a)(1)(ii)-1. For an Application that was not submitted directly to the Financial Institution, the Financial Institution may report the date the Application was received by the party that initially received the Application, the date the Application was received by the Financial Institution, or the date shown on the Application form. Comment 4(a)(1)(ii)-2. If, within the same calendar year, an applicant asks a Financial Institution to reinstate a counteroffer that the applicant previously did not accept (or asks the Financial Institution to reconsider an Application that was denied, withdrawn, or closed for incompleteness), the reportable Application date depends on whether the Financial Institution reports the request as the continuation of the earlier transaction using the earlier transaction’s ULI or non-universal loan identifier (as applicable) or as a new transaction with a new ULI or non-universal loan 62 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
identifier (as applicable). If the Financial Institution treats the request for reinstatement or reconsideration as a new transaction, it reports the date of the request as the Application date. If the Financial Institution does not treat the request for reinstatement or reconsideration as a new transaction, it reports the original Application date. Comment 4(a)(1)(ii)-3. For a purchased Covered Loan, a Financial Institution reports that this data point is not applicable. 12 CFR 1003.4(a)(1)(ii).
5.4 Application channel
A Financial Institution reports the application channel in the manner described below unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3. Except for purchased Covered Loans, a Financial Institution reports both of the following:
determined, at the time it took final action on the Application, whether the loan would be initially payable to the Financial Institution. Comment 4(a)(33)(ii)-2. For purchased Covered Loans, a Financial Institution reports that this data point is not applicable. 12 CFR 1003.4(a)(33).
5.5 Preapproval request
A Financial Institution reports whether or not the Application or Covered Loan involved a preapproval request for a Home Purchase Loan under a Preapproval Program. 12 CFR 1003.4(a)(4). For all of the following, a Financial Institution reports that the Application or Covered Loan did not involve a preapproval request: a purchased Covered Loan; an Open-End Line of Credit or Application for an Open-End Line of Credit; a Reverse Mortgage or an Application for a Reverse Mortgage; an Application for a Covered Loan that is denied; an Application that is closed for incompleteness or withdrawn; an Application or Covered Loan for any purpose other than Home Purchase Loan; and for a Covered Loan secured by a Multifamily Dwelling. Comment 4(a)(4)-2.
5.6 Loan type
A Financial Institution reports whether the Covered Loan is or the Application was for a Covered Loan that would have been:
5.7 Loan purpose
A Financial Institution records and reports the Covered Loan’s or Application’s purpose, under 12 CFR 1003.4(a)(3), using one of the following:
Home Purchase Loan. A Home Purchase Loan is a Closed-End Mortgage Loan or OpenEnd Line of Credit that is for the purpose,
in whole or part, of purchasing a Dwelling.
12 CFR 1003.2(j). A Home Purchase Loan includes: (a) a Closed-End Mortgage Loan or Open-End Line of Credit secured by one Dwelling and used to purchase another Dwelling; (b) a combined construction-to-permanent loan that is secured by a Dwelling; (c) a separate permanent loan that replaces a construction-only loan or line of credit to the same borrower if the permanent loan is secured by a Dwelling; and (d) a Dwelling-secured subordinate mortgage loan that finances some or all of the home purchaser’s down payment. Comments 2(j)-1, -3, and -4. Home Purchase Loans do not include loans that are excluded transactions under the HMDA Rule, such as loans that are temporary financing under 12 CFR 1003.3(c)(3). See Section 4.1.2 for more information on excluded transactions. An assumption is a Home Purchase Loan when: (a) the assumption is a Closed-End Mortgage or Open-End Line of Credit; (b) the Financial Institution enters into a written agreement accepting a new borrower as the obligor on an existing obligation; and (c) the purpose is to finance the new borrower’s purchase of the Dwelling securing the existing obligation. An assumption is not a Home Purchase Loan if the new borrower assumes the existing borrower’s obligation after acquiring title to the Dwelling securing the existing obligation because the purpose is not to finance the new borrower’s purchase of the Dwelling. The assumption would be reported using a loan purpose other than Home Purchase Loan. Comment 2(j)-5. Example: Borrower A obtains title to Owner A’s Dwelling after assuming Owner A’s existing debt obligation. Borrower A’s transaction is a Home Purchase Loan. In contrast, Borrower B obtains title to Owner B’s Dwelling in Year 1 and in Year 2 assumes Owner B’s existing debt obligation. Borrower B’s transaction is not a Home Purchase Loan. 65 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Home Improvement Loan. A Home Improvement Loan is a Closed-End Mortgage Loan
or Open-End Line of Credit that is for the purpose, in whole or part, of repairing, rehabilitating, remodeling, or improving a Dwelling or the real property on which the Dwelling is located. 12 CFR 1003.2(i). For example, a Home Improvement Loan includes:
(a) a Covered Loan if any of the proceeds are used for repair, rehabilitation, remodeling, or improvement of the Dwelling or the real property on which the Dwelling securing the Covered Loan is located, even if the remainder is used for totally unrelated purposes, such as college tuition; (b) a Covered Loan used to install a swimming pool, construct a garage, or improve landscaping on the real property on which the Dwelling securing the Covered Loan is located; and (c) a Covered Loan used to improve a Multifamily Dwelling used for residential and commercial purposes if the proceeds are used either to improve the entire property (e.g., to replace a heating system that services the entire structure) or primarily to improve the residential portion of the Multifamily Dwelling. Comments 2(i)-1, -2, and -4.
Refinancing. A Refinancing is a Closed-End Mortgage Loan or Open-End Line of Credit in
which a new Dwelling-secured debt obligation satisfies and replaces an existing Dwellingsecured debt obligation by the same borrower. 12 CFR 1003.2(p). Generally, whether the new debt obligation satisfies and replaces an existing obligation is determined by reference to the parties’ contract and applicable law. In order for a Covered Loan to be a Refinancing, both the new and existing transactions must be secured by a Dwelling. Only one borrower need be the same on the new and existing transactions. Comments 2(p)-1, -3, and -4.
Cash-out Refinancing. A Financial Institution reports a Covered Loan or an Application
as a cash-out Refinancing if it is a Refinancing and the Financial Institution considered it to be a cash-out Refinancing when processing the Application or setting the terms under its or an investor’s guidelines. For example, if a Financial Institution considers a loan product to be a cash-out Refinancing under an investor’s guidelines because of the amount of cash received by the borrower at closing or account opening, it reports the transaction as a cashout Refinancing. If a Financial Institution does not distinguish between a cash-out Refinancing and a Refinancing under its own guidelines, sets the terms of all Refinancings without regard to the amount of cash received by the borrower at loan closing or account opening, and does not offer loan products under investor guidelines, it reports all Refinancings as Refinancings, not cash-out Refinancings. Comment 4(a)(3)-2.
Other. If a Covered Loan is not, or an Application is not for, a Home Purchase Loan, a
Home Improvement Loan, a Refinancing, or a cash-out Refinancing, a Financial Institution reports the purpose as “other.” For example, if a Covered Loan is for the purpose of paying educational expenses, the Financial Institution reports the purpose as “other.” A Financial Institution also uses “other” if the Covered Loan is or the Application is for a Refinancing 66 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
but, under the terms of the existing credit agreement, the Financial Institution was unconditionally obligated to refinance the obligation subject to conditions within the borrower’s control. Comment 4(a)(3)-4. The following chart illustrates the reportable purpose for multiple-purpose Covered Loans originated on or after January 1, 2018. For purchased Covered Loans originated prior to January 1, 2018, a Financial Institution reports “Not Applicable.” See also comments 4(a)(3)-3 and -6. Multiple Purposes Reportable Purpose Home Purchase Loan and Home Improvement Loan Home Purchase Loan Home Purchase Loan and Refinancing Home Purchase Loan Home Purchase Loan and cash-out Refinancing Home Purchase Loan Home Purchase Loan and other Home Purchase Loan Home Improvement Loan and Refinancing Refinancing Home Improvement Loan and cash-out Refinancing Cash-out Refinancing Refinancing and other Refinancing Cash-out Refinancing and other Cash-out Refinancing Home Improvement Loan and other Home Improvement Loan A Financial Institution may rely on an applicant’s oral or written statement regarding the proposed use of the loan proceeds. For example, a Financial Institution could use a check box or a purpose line on an Application form. If an applicant provides no statement as to the proposed use of the proceeds, and the Covered Loan is not a Home Purchase Loan, cash-out Refinancing, or Refinancing, a Financial Institution reports the Covered Loan as for an “other” purpose. Comment 4(a)(3)-1. 67 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
5.8 Loan amount
A Financial Institution must report the loan amount for the Covered Loan or Application. 12 CFR 1003.4(a)(7). The first chart below provides information on determining the loan amount that is reported for Covered Loans. The second chart below provides information on determining the reportable loan amount for transactions that involve multiple purposes, counteroffers, and Applications that do not result in the Financial Institution originating a Covered Loan. If the Covered Loan is a: The reportable loan amount is the:
Closed-End Mortgage Loan other than a purchased Closed-End Mortgage Loan, assumption, or a Reverse Mortgage Amount to be repaid as disclosed on the legal obligation. 12 CFR 1003.4(a)(7)(i); comment 4(a)(7)-5. Purchased Closed-End Mortgage Loan or assumption of a Closed-End Mortgage Loan Unpaid principal balance at the time of purchase or assumption. 12 CFR 1003.4(a)(7)(i); comment 4(a)(7)-5. Open-End Line of Credit (including a purchased Open-End Line of Credit and assumption of an Open-End Line of Credit) other than a Reverse Mortgage Amount of credit available to borrower under the terms of plan. 12 CFR 1003.4(a)(7)(ii); comment 4(a)(7)-6. Initial principal limit (as determined pursuant to
section 255 of the National Housing Act and
implementing regulations and mortgagee letters issued by HUD). 12 CFR 1003.4(a)(7)(iii); comment 4(a)(7)-9. Reverse Mortgage Loan amount for new debt obligation based on the type of Covered Loan (see above). Comment 4(a)(7)-7. Refinancing If the transaction involves: Report the:
A counteroffer that is accepted for an amount that is different from the amount for which the applicant applied Loan amount granted for the Covered Loan. Comment 4(a)(7)-1. 68 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
A counteroffer for an amount different from the amount for which the applicant applied, and the applicant did not accept or failed to respond Amount for which applicant initially applied. Comment 4(a)(7)-1. An approved but not accepted Application (including an approved but not accepted preapproval request) Approved loan amount. Comment 4(a)(7)-2. Application (including a preapproval request) that was denied, closed for incompleteness, or withdrawn Amount requested. Comment 4(a)(7)-3. Loan proceeds that will be used for more than one purpose Entire loan amount for the Covered Loan, even if only a portion of the proceeds is intended for the reported purpose. Comment 4(a)(7)-4.
5.9 Loan term
A Financial Institution reports the loan term in the manner described below unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3. A Financial Institution reports the loan term as the scheduled number of months after which the legal obligation will mature or terminate or would have matured or terminated. 12 CFR 1003.4(a)(25). If a Covered Loan or Application includes a schedule with repayment periods measured in a unit of time other than months, the Financial Institution reports the loan term in months using an equivalent number of whole months without regard for any remainder. Comment 4(a)(25)-2. For a fully amortizing Covered Loan, the number of months after which the legal obligation matures is the number of months in the amortization schedule, ending with the final payment. Covered Loans that do not fully amortize during the maturity term, such as Covered Loans with a balloon payment, are reported using the maturity term rather than the amortization term. Comment 4(a)(25)-1. 69 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
For a purchased Covered Loan, a Financial Institution reports the number of months after which the legal obligation matures as measured from the Covered Loan’s origination. Comment 4(a)(25)-3. For an Open-End Line of Credit with a definite term, a Financial Institution reports the number of months from account opening until the account termination date, including both the draw and repayment period (if any). Comment 4(a)(25)-4. For a Covered Loan or Application without a definite term, such as a Reverse Mortgage, a Financial Institution reports that the data point is not applicable. Comment 4(a)(25)-5.
5.10 Action taken and date
A Financial Institution reports its action taken and the date of its action. 12 CFR 1003.4(a)(8). The action taken is reported as one of the following: (1) loan originated; (2) application approved but not accepted; (3) application denied; (4) application withdrawn; (5) file closed for incompleteness; (6) loan purchased; (7) preapproval request denied; or (8) preapproval request approved but not accepted. 12 CFR 1003.4(a)(8)(i); comments 4(a)(8)(i)-1 through -14. The Action Taken chart in Attachment B provides additional information on how to determine the reportable action taken and date of action taken. See also 12 CFR 1003.4(a)(8)(ii) and its commentary for information on reporting the date of the action taken.
5.11 Reasons for denial
A Financial Institution reports the reasons for denial in the manner described below unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3.16 16 Certain Financial Institutions supervised by the OCC and the FDIC are required by those agencies to report reasons for denial on their HMDA loan/application registers, even if a partial exemption applies. 12 CFR 27.3(a)(1)(i), 128.6, 390.147. 70 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
For an Application that it denied, a Financial Institution must report the principal reasons (up to four) that it denied the Application. 12 CFR 1003.4(a)(16); comment 4(a)(16)-1. For all other transactions, a Financial Institution reports that the data point is not applicable. Comment 4(a)(16)-4. If a Financial Institution provided the reason or reasons it denied the Application using the model form contained in appendix C to Regulation B (Form C–1, Sample Notice of Action Taken and Statement of Reasons) or a similar form, the Financial Institution reports the reason or reasons specified on that form, including reporting the “Other” reason or reasons that were specified on the form, if applicable. If a Financial Institution provided a disclosure of the applicant’s right to a statement of specific reasons using the model form contained in appendix C to Regulation B (Form C–5, Sample Disclosure of Right to Request Specific Reasons for Credit Denial) or a similar form, or provided the denial reasons orally under Regulation B, the Financial Institution reports the principal reasons it denied the Application. Comment 4(a)(16)-3. The Financial Institution reports only the principal reason or reasons it denied the Application, even if there are fewer than four reasons. For example, if a Financial Institution denied the Application because of the applicant’s credit history and debt-to-income ratio, the Financial Institution only reports these two principal reasons. The reason or reasons reported must be specific and accurately describe the principal reason or reasons the Financial Institution denied the Application. Comment 4(a)(16)-1. If a Financial Institution denied a preapproval request under a Preapproval Program, the Financial Institution must report the principal reason or reasons (up to four) that it denied the preapproval request. Comment 4(a)(16)-2. 71 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
5.12 Property address and property location
Unless a partial exemption applies, a Financial Institution reports the property address of the property securing the Covered Loan or, for an Application, proposed to secure the Covered Loan. 12 CFR 1003.4(a)(9)(i). For Applications that did not result in an origination, the property address corresponds to the location of the property proposed to secure the loan as identified by the applicant. For Covered Loans, the property address corresponds to the property identified in the legal obligation. Comment 4(a)(9)(i)-1. If a partial exemption applies to a Covered Loan or Application, see Section 4.3.3 for information on reporting the property address. Property address is one of the 26 data points that a Financial Institution is not required to report if a partial exemption applies to a transaction. However, the property location data points (i.e., state, county, and census tract) are among the 22 data points that are not affected by the HMDA Rule. Additionally, regardless of whether a partial exemption applies, a Financial Institution reports the property location (i.e., the state, county, and census tract) for the property securing the Covered Loan or, for an Application, proposed to secure the Covered Loan if: (1) the property is located in an MSA or metropolitan division (MD)17 in which the Financial Institution has a home or Branch Office; or (2) if the Financial Institution is a bank or savings association required to report data on small business, small farm, and community development lending under the CRA. For transactions for which state, county, or census tract is not required, a Financial Institution may report that the data point is not applicable, or it may voluntarily report the state, county, or census tract information. Comment 4(a)(9)(ii)-1. 17 Metropolitan divisions (MDs) are metropolitan divisions of MSAs as defined by the OMB. 12 CFR 1003.2(m)(2). For more information on MDs and MSAs, see https://www.ffiec.gov/census/default.aspx and https://www.ffiec.gov/geocode/help1.aspx. 72 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
If a Financial Institution is required to report property location, it must include the census tract only if the property is located in a county with a population of more than 30,000 according to the most recent decennial census. 12 CFR 1003.4(a)(9)(ii). See also 12 CFR 1003.4(e). Incorrect entries reporting the census tract are not violations of HMDA or Regulation C if the Financial Institution obtained the census tract number from the geocoding tool made available through the Bureau’s website, provided the Financial Institution entered an accurate property address into the tool and the tool returned a census tract number. For more information, see Section 7. If a Covered Loan is related to more than one property, but only one property secures or, for an Application, would have secured the Covered Loan, a Financial Institution reports the property address and property location, as applicable, of the property that secures or would have secured the Covered Loan. A Financial Institution does not report the property address or property location for any properties that do not secure or would not have secured the Covered Loan. Comment 4(a)(9)-1. If more than one property secures the Covered Loan or, in the case of an Application, would have secured the Covered Loan, a Financial Institution reports the Covered Loan or Application in a single entry on its LAR and provides the property address and property location, as applicable, for only one property. The Financial Institution can choose the property for which it reports this information, but it must choose a property that secures the Covered Loan (or, in the case of an Application, would have secured the Covered Loan) and that includes a Dwelling. If a single Multifamily Dwelling has more than one postal address, a Financial Institution reports one of the postal addresses. Comments 4(a)(9)-2 and -3. If other data points require the Financial Institution to report specific information about property securing or involved with a Covered Loan or Application, the Financial Institution reports the information that relates to the property for which it has provided the address and location for these data points. Comment 4(a)(9)-2. For purposes of this guide, the property for which the Financial Institution has provided the address and location for these data points is called the Identified Property. If the site for a Manufactured Home has not been identified, a Financial Institution may report that the data points for the property address and property location are not applicable. Comment 4(a)(9)-5. If the property address of the property securing the Covered Loan is unknown, a Financial Institution may report that the data point for the property address is not applicable. For example, the Financial Institution may report that the data point is not applicable if the 73 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
property did not have an address at closing or if the applicant did not provide the property address before the Application was denied, withdrawn, or closed for incompleteness. Comment 4(a)(9)(i)-3. Similarly, when reporting an Application, a Financial Institution may report that the data points for property location (i.e., state, county, and census tracts) are not applicable if the information was not known before the Application was denied, withdrawn, or closed for incompleteness. Comments 4(a)(9)(ii)(A)-1, (B)-2, and (C)-2.
5.13 Construction method
A Financial Institution reports the construction method for the Identified Property, using one of the following:
the Financial Institution should report the construction method as Manufactured Home. Comment 4(a)(5)-2.
5.14 Occupancy type
A Financial Institution reports the occupancy type for the Identified Property, using one of the following:
5.15 Lien status
A Financial Institution reports the lien status of the lien on the Identified Property as either a first lien or a subordinate lien. 12 CFR 1003.4(a)(14). The HMDA Rule requires a Financial Institution to report the lien status for Covered Loans it purchased. For purchased Covered Loans, lien status is determined by reference to the best information readily available to the Financial Institution at the time of purchase. For Applications and originations of Covered Loans, lien status is determined by reference to the best information readily available to the Financial Institution at the time final action is taken and to the Financial Institution’s own procedures. When reporting lien status, Financial Institutions may rely on title searches they routinely obtain, but the HMDA Rule does not require Financial Institutions to obtain title searches solely to comply with Regulation C. Financial Institutions may rely on other information that is readily available to them at the time final action is taken and that they reasonably believe is accurate, such as the applicant’s statement on the Application form or the applicant’s credit report. Comment 4(a)(14)-1. Examples: An applicant applies for a Covered Loan from Ficus Bank and indicates on the Application form that there is a mortgage on the Dwelling that will secure the applicant’s Covered Loan. Ficus Bank obtains the applicant’s credit report, and it shows that the applicant has a mortgage loan. The existing mortgage will not be paid off as part of the transaction. Ficus Bank may assume that the transaction involves a subordinate lien for purposes of HMDA reporting. An applicant applies for a loan from Ficus Bank to refinance the applicant’s existing home mortgage loan. The existing loan is and the new loan will be secured by the applicant’s principal residence. The applicant also has an Open-End Line of Credit for $20,000 secured by the principal residence. Ficus Bank’s practice in such a case is to ensure that it will have first-lien position through a subordination agreement with the holder of the lien securing the Open-End Line of Credit. Ficus Bank may assume that the transaction involves a first lien for purposes of HMDA reporting. 76 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
5.16 Manufactured home information
A Financial Institution reports manufactured home information in the manner described below unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3. If a Dwelling on the Identified Property is a Manufactured Home and not a Multifamily Dwelling (i.e., it has four or fewer individual dwelling units), the Financial Institution must report both:
the borrower has a written lease for the lot, and the lease specifies rent payments. Comment 4(a)(30)-2. d. Unpaid Leasehold. For example, an unpaid leasehold occurs when the borrower locates the Manufactured Home on land owned by a family member, does not have a written lease, and does not have an agreement regarding rent payments. Comment 4(a)(30)-2. If the Dwelling securing the Covered Loan (or that would have secured the resulting Covered Loan in the case of an Application) is not a Manufactured Home, the Financial Institution reports that these data points are not applicable. Comments 4(a)(29)-4 and 4(a)(30)-6. A Manufactured Home community that is a Multifamily Dwelling is not considered a Manufactured Home for purposes of reporting these data points. Comment 4(a)(29)-2 and 4(a)(30)-4.
5.17 Property value
A Financial Institution reports the property value in the manner described below unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3. For a Covered Loan, a Financial Institution reports the value of the property securing the Covered Loan. For an Application that did not result in a Covered Loan (other than an Application that was withdrawn before a credit decision was made or that was closed for incompleteness), a Financial Institution reports the value of the property proposed to secure the Covered Loan. 12 CFR 1003.4(a)(28). A Financial Institution reports that the data point is not applicable for an Application that was withdrawn before a credit decision was made or was closed for incompleteness, even if the Financial Institution obtained a property value. Comment 4(a)(28)-3. A Financial Institution reports the property value it relied on in making its credit decision. 12 CFR 1003.4(a)(28). If the Financial Institution relied on an appraisal or other valuation of a property when calculating the loan-to-value ratio, it reports the value stated in the appraisal or other valuation on which it relied. If the Financial Institution relied on the purchase price of a property when calculating the loan-to-value ratio, it reports the purchase price as the property value. Comment 4(a)(28)-1. 78 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Example: Ficus Bank obtains an appraisal that values a parcel of property at $100,000, an automated valuation model report that values the property at $110,000, and a broker price opinion that values the property at $105,000. When approving the Application, Ficus Bank relies on the appraisal. It reports the property value as $100,000. The HMDA Rule does not require a Financial Institution to obtain a property valuation or to rely on a property value in making a credit decision. A Financial Institution reports that this data point is not applicable if it does not rely on property value when making the credit decision. Comment 4(a)(28)-4.
5.18 Total units
For a Covered Loan, a Financial Institution reports the number of individual Dwelling units related to the property securing the Covered Loan. For an Application, it reports the number of individual Dwelling units related to the property proposed to secure the Covered Loan. 12 CFR 1003.4(a)(31). For an Application or Covered Loan secured by a Manufactured Home community, the Financial Institution should include the total number of Manufactured Home sites that secure the loan and are available for occupancy, regardless of whether the sites are occupied or have Manufactured Homes attached. For a loan secured by a single Manufactured Home that is or will be located in a Manufactured Home community, the Financial Institution should report one individual Dwelling unit. Comment 4(a)(31)-2. For a Covered Loan secured by a condominium or cooperative complex, the Financial Institution reports the total number of individual Dwelling units securing the Covered Loan or proposed to secure the Covered Loan in the case of an Application. Comment 4(a)(31)-3.A Financial Institution may include recreational vehicle pads, manager apartments, rental apartments, site-built homes, or other rentable space that are ancillary to the operation of the secured property if it considers such units under its underwriting guidelines or investor guidelines, or if it tracks the number of such units for its own internal purposes. Comment 4(a)(31)-2. 79 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
A Financial Institution may rely on the best information readily available to it at the time action is taken and on the Financial Institution’s own procedures. Information readily available could include, for example, information provided by an applicant that the Financial Institution reasonably believes, information contained in a property valuation or inspection, or information obtained from public records. Comment 4(a)(31)-4.
5.19 Multifamily affordable units
A Financial Institution reports information about multifamily affordable units in the manner described below unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3. If the property securing a Covered Loan or proposed to secure an Application includes a Multifamily Dwelling, the Financial Institution must provide the number of individual Dwelling units that are income-restricted pursuant to Federal, State, or local affordable housing programs.18 12 CFR 1003.4(a)(32). For a Covered Loan that is not secured by a Multifamily Dwelling and for an Application that would not have been secured by a Multifamily Dwelling, the Financial Institution reports that this data point is not applicable. Comment 4(a)(32)-6. Affordable housing income-restricted units are individual Dwelling units that have restrictions based on the occupants’ income level pursuant to restrictive covenants encumbering the property. The restrictive covenants may be evidenced by a use agreement, regulatory agreement, land use restrictions, or a similar agreement. Rent control or rent stabilization laws, 18 Examples of Federal programs and funding sources that may result in reportable units include but are not limited to: (1) affordable housing programs pursuant to Section 8 of the United States Housing Act of 1937; (2) public housing; (3) the HOME Investment Partnerships program; (4) the Community Development Block Grant program; (5) multifamily tax subsidy project funding through tax-exempt bonds or tax credits; (6) Federal Home Loan Bank affordable housing program funding; (7) Rural Housing Service multifamily housing loans and grants; and (8) project-based vouchers under 24 CFR part 983. Comment 4(a)(32)-2. Examples of State and local sources that may result in reportable units include but are not limited to: (1) State or local administration of Federal funds or programs; (2) State or local funding programs for affordable housing or rental assistance, including programs operated by independent public authorities; (3) inclusionary zoning laws; and (4) tax abatement or tax increment financing contingent on affordable housing requirements. Comment 4(a)(32)-3. 80 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
the acceptance of Housing Choice Vouchers, and other similar forms of portable housing assistance that are tied to an occupant and not an individual dwelling unit are not affordable housing income-restricted Dwelling units for purposes of reporting. Comment 4(a)(32)-1. A Financial Institution may rely on the best information readily available to it at the time final action is taken and on the Financial Institution’s own procedures when reporting. Information readily available could include, for example, information provided by an applicant that the Financial Institution reasonably believes, information contained in a property valuation or inspection, or information obtained from public records. Comment 4(a)(32)-5.
5.20 Debt-to-income ratio
A Financial Institution reports debt-to-income (DTI) ratio in the manner described below unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3. Except for purchased Covered Loans, if the Financial Institution relied on the applicant’s or borrower’s DTI ratio when making its credit decision, the Financial Institution reports the DTI ratio on which it relied in making the credit decision. 12 CFR 1003.4(a)(23). The DTI ratio is the ratio of the applicant’s or borrower’s total monthly debt to total monthly income. Example: Ficus Bank calculates the applicant’s DTI ratio twice−once according to its own requirements and once according to an investor’s requirements. Ficus Bank relies on the DTI ratio calculated according to the investor’s requirements when it makes the credit decision. Ficus Bank reports the DTI ratio calculated in accordance with the investor’s requirements. Comment 4(a)(23)-1. A Financial Institution relied on the applicant’s or borrower’s DTI ratio in making the credit decision if the DTI ratio was a factor in the credit decision, even if it was not a dispositive factor. For example, if the DTI ratio was one of multiple factors in a Financial Institution’s credit decision, the Financial Institution relied on the DTI ratio, even if the Financial Institution denied the Application because one or more underwriting requirements other than the DTI ratio were not satisfied. Comment 4(a)(23)-2. 81 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
The HMDA Rule does not require a Financial Institution to calculate a DTI ratio and does not require a Financial Institution to rely on an applicant’s or borrower’s DTI ratio in making a credit decision. Comment 4(a)(23)-4. A Financial Institution reports that this data point is not applicable:
because one or more underwriting requirements other than the CLTV ratio were not satisfied. Comments 4(a)(24)-1 and -2. Examples: Ficus Bank reviews an Application that will be secured by two parcels of real property. It calculates the CLTV ratio using its own requirements. It also calculates the CLTV ratio using an investor’s requirements. When making its credit decision, Ficus Bank relies on the CLTV ratio calculated according to the investor’s requirements. Ficus Bank reports the CLTV ratio calculated according to the investor’s requirements. Ficus Bank originates a Covered Loan for the purchase of a Multifamily Dwelling. The Covered Loan is secured by the Multifamily Dwelling and certain securities. Ficus Bank uses both the value of the Multifamily Dwelling and the value of the securities when calculating the CLTV ratio that it relies on when making the credit decision. Ficus Bank reports the CLTV ratio it relies on when making the credit decision. The HMDA Rule does not require a Financial Institution to calculate the CLTV ratio and does not require a Financial Institution to rely on a CLTV ratio in making a credit decision. Comment 4(a)(24)-4. A Financial Institution reports that this data point is not applicable:
5.22 Credit score information
A Financial Institution reports credit score information in the manner described below unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3. Except for purchased Covered Loans, a Financial Institution reports the credit score or scores it relied on in making the credit decision and the name and version of the scoring model used to generate each reported credit score. 12 CFR 1003.4(a)(15)(i). The term “credit score” has the same meaning as set forth in the Fair Credit Reporting Act, 15 USC 1681g(f)(2)(A). 12 CFR 1003.4(a)(15)(ii). A “credit score” is a numerical value or a categorization derived from a statistical tool or modeling system used by a person who makes or arranges a loan to predict the likelihood of certain credit behaviors, including default. A “credit score” does not include: (1) any mortgage score or rating of an automated underwriting system that considers one or more factors in addition to credit information, including loan-to-value ratio, the amount of down payment, or the consumer’s financial assets; or (2) any other elements of the underwriting process or underwriting decision. 15 USC 1681g(f)(2)(A). A Financial Institution relied on a credit score in making the credit decision if the credit score was a factor in the credit decision, even if it was not a dispositive factor. For example, if a credit score was one of multiple factors in a Financial Institution’s credit decision, the Financial Institution relied on the credit score even if the Financial Institution denied the Application because one or more underwriting requirements other than the credit score were not satisfied. Comment 4(a)(15)-1. When a Financial Institution obtained or created two or more credit scores for a single applicant or borrower but relied on only one score in making the credit decision (e.g., by relying on the lowest, highest, most recent, or average of all of the scores), the Financial Institution reports the credit score it actually relied on and the information about the scoring model it used. When a Financial Institution used more than one credit scoring model and combined the scores into a composite score and then relied on the composite score, the Financial Institution reports the composite score and reports that more than one scoring model was used. When a Financial Institution obtained two or more credit scores for the applicant or borrower and relied on multiple credit scores in making the credit decision (e.g., by relying on a scoring grid that considers each of the scores obtained or created for the applicant or borrower without combining the scores into a composite score), the Financial Institution reports one of the credit 84 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
scores that it relied on in making the credit decision. In choosing which credit score to report, a Financial Institution need not use the same approach for its entire HMDA data submission, but it should be generally consistent (e.g., by routinely using one approach within a particular division of the Financial Institution or for a category of Covered Loans). The Financial Institution reports the name and version of the credit-scoring model for the score reported. Comment 4(a)(15)-2. If a transaction involved two or more applicants or borrowers for whom the Financial Institution obtained or created a single credit score and if the Financial Institution relied on that single credit score when making the credit decision, the Financial Institution reports that credit score for the applicant and reports that the data point is not applicable for the co-applicant. Alternatively, at its discretion, the Financial Institution may report that credit score for the first co-applicant and report that the data point is not applicable for the applicant. If a transaction involved more than one applicant and a Financial Institution relied on separate credit scores for each applicant, it reports the credit score it relied on for the applicant and the credit score it relied on for the first co-applicant. Comment 4(a)(15)-3. Examples: Two individuals apply for a Covered Loan. Ficus Bank obtains two credit scores for the applicant and two credit scores for the co-applicant. Ficus Bank relies on the highest of the four credit scores it obtained. Ficus Bank reports the highest credit score and information about the credit scoring model used. Ficus Bank may report the score and information for the applicant and report “not applicable” for the co-applicant or, at its discretion, Ficus Bank can report the score and information for the co-applicant and report “not applicable” for the applicant. Two individuals apply for a Covered Loan. Ficus Bank obtains three credit scores for the applicant and three credit scores for the co-applicant. Ficus Bank relies on the middle credit score for the applicant and the middle score for the co-applicant. Ficus Bank reports the middle score and related scoring model information for the applicant and the middle score and related scoring model information for the co-applicant. A Financial Institution reports that the credit score data point is not applicable:
1. For purchased Covered Loans;
85 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
2. If the Financial Institution did not rely on a credit score;
3. If the Application file was closed for incompleteness (even if a credit score was obtained
or created);
4. If an Application was withdrawn before a credit decision was made (even if a credit score
was obtained or created); or
5. If the applicant and co-applicant, if applicable, are not natural persons. Comments
4(a)(15)-4 through -7.
5.23 Automated underwriting system
information
A Financial Institution reports automated underwriting system (AUS) information in the manner described below unless a partial exemption applies. If a partial exemption applies, see
Section 4.3.3.
Except for purchased Covered Loans, a Financial Institution reports the name of the Automated Underwriting System (AUS), as defined below, that it used to evaluate the Application and the AUS result generated by that AUS. 12 CFR 1003.4(a)(35)(i). A Financial Institution must report this information only if the Financial Institution used an AUS to evaluate the Application. Comment 4(a)(35)-4. For purposes of the HMDA Rule, an Automated Underwriting System or AUS is an electronic tool:
1. Developed by a securitizer, Federal government insurer, or Federal government
guarantor of Closed-End Mortgage Loans or Open-End Lines of Credit. For this purpose, a person is a securitizer, Federal government insurer, or Federal government guarantor of Closed-End Mortgage Loan or Open-End Lines of Credit if that person has ever securitized, provided Federal government insurance for, or provided a Federal government guarantee for a Closed-End Mortgage Loan or Open-End Line of Credit at any point in time. The person does not need to be actively securitizing, insuring, or guaranteeing Closed-End Mortgage Loans or Open-End Lines of Credit at the time that the Financial Institution uses the AUS to evaluate an Application. 12 CFR 1003.4(a)(35)(ii); comment 4(a)(35)-2. If a Financial Institution knows or 86 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
reasonably believes that the system it is using to evaluate an Application is an electronic tool developed by a securitizer, Federal government insurer, or Federal government guarantor of Closed-End Mortgages or Open-End Lines of Credit, then this prong of the definition of AUS is satisfied, and the Financial Institution must report the name of the system and the result generated by that system if the second prong of the definition, below, is satisfied. If a Financial Institution does not know or reasonably does not believe that the system was developed by a securitizer, Federal government insurer, or Federal government guarantor of Closed-End Mortgages or Open-End Lines of Credit, then the Financial Institution reports that the data point is not applicable, provided that the Financial Institution maintains procedures reasonably adapted to determine whether the electronic tool it is using meets the definition of an AUS. Comment 4(a)(35)-7.
2. That provides a result regarding
both (a) the applicant’s credit risk; and (b) whether the Covered Loan is eligible to be originated, purchased, insured, or guaranteed by the securitizer, Federal government insurer, or Federal government guarantor that developed the electronic tool. In order for a system to be an AUS, the system must provide a result regarding both the credit risk of the applicant and the eligibility of the loan to be originated, purchased, insured, or guaranteed by the securitizer, Federal government insurer, or Federal government guarantor that developed the system being used to evaluate the Application. For example, if a system is an electronic tool that provides a determination of the loan’s eligibility to be purchased, but the system does not also provide an assessment of the applicant’s creditworthiness—such as an evaluation of the applicant’s income, debt, and In order to know or reasonably believe that a system is not developed by a securitizer, Federal government insurer, or Federal government guarantor of Closed-End Mortgage Loans or Open-End Lines of Credit, a Financial Institution must maintain procedures reasonably adapted to make such a determination. Reasonably adapted procedures include attempting to determine with reasonable frequency, such as annually, whether the developer of the electronic tool is a securitizer, Federal government insurer, or Federal government guarantor of Closed-End Mortgage Loans or Open-End Lines of Credit. For example, in the course of renewing an annual sales agreement the developer could represent to the Financial Institution that the developer is not such a securitizer, Federal government insurer, or Federal government guarantor of Closed-End Mortgage Loans or Open-End Lines of Credit. Comment 4(a)(35)-7. 87 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
credit history—the system is not an AUS. In that case, the Financial Institution reports that the data point is not applicable. 12 CFR 1003.4(a)(35)(ii); comment 4(a)(35)-2. If a Financial Institution has developed its own proprietary system that it uses to evaluate an Application and the Financial Institution is also a securitizer, the system may be an AUS if it also meets the other elements of the AUS definition. On the other hand, if a Financial Institution has developed its own proprietary system that it uses to evaluate an Application but the Financial Institution is not a securitizer, the system is not an AUS. Comment 4(a)(35)-2. A Financial Institution that used an AUS to evaluate an Application must report the name of the AUS it used to evaluate the Application and the result generated by that system regardless of whether the Financial Institution intends to sell or hold the Covered Loan in its portfolio. For example, if a Financial Institution used an AUS developed by a securitizer to evaluate an Application but ultimately did not sell the Covered Loan and instead holds the Covered Loan in its portfolio, the Financial Institution reports the name of the AUS that the Financial Institution used to evaluate the Application and the result generated by that system. Comments 4(a)(35)-1.i and ii. If a Financial Institution used more than one AUS to evaluate an Application or if a Financial Institution used one AUS to evaluate an Application but it generated multiple results, the Financial Institution must determine which AUS or AUSs and which result or results to report. To do so, the Financial Institution can use the following steps in the exact order they are presented below.
1. The Financial Institution must determine whether an AUS that it used to evaluate the
Application matches the loan type it reported for the Application or Covered Loan. For more information on reporting loan type, see Section 5.6.
2. If the Financial Institution used an AUS that matches loan type (such as Total Scorecard for
an FHA loan), it must determine whether it obtained only one result from that AUS. If the Financial Institution obtained only one result from the AUS that matches loan type, the Financial Institution reports the AUS that matches loan type and the result that it obtained from that AUS.
3. If the Financial Institution did not use an AUS that matches loan type or if it obtained more
than one result from the AUS that matches loan type, the Financial Institution must determine whether an AUS that it used to evaluate the Application matches the purchaser, insurer, or guarantor (if any) for the Covered Loan. 88 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
4. If the Financial Institution used an AUS that matches the purchaser, insurer, or guarantor
(such as Desktop Underwriter for a Covered Loan that Fannie Mae purchased), it must determine whether it obtained only one result from that AUS. If the Financial Institution obtained only one result from the AUS that matches the purchaser, insurer, or guarantor, the Financial Institution reports the AUS that matches and the result that it obtained from that AUS.
5. If the Financial Institution did not use an AUS that matches the purchaser, insurer, or
guarantor or it obtained multiple results from an AUS that matches the purchaser, insurer, or guarantor or loan type, the Financial Institution reports the result it obtained closest in time to the credit decision and the AUS that generated that result, unless the Financial Institution obtained multiple results closest in time to the credit decision. For example, a Financial Institution obtains multiple results closest in time to the credit decision if it obtains two results at noon on the day immediately before it makes the credit decision and does not obtain any results at a later time.
6. If the Financial Institution simultaneously obtains multiple results closest in time to the
credit decision, the Financial Institution reports each of the multiple AUS results that it obtained and the AUSs that generated each of those results up to a total of five results and five AUSs. The Financial Institution will never report more than five results or five AUSs. If the Financial Institution used more than five AUSs or it obtained more than five results, the Financial Institution chooses five AUSs and five results to report. Comment 4(a)(35)-3. The HMDA Rule does not require a Financial Institution to use an AUS when evaluating an Application. Comment 4(a)(35)-4. A Financial Institution reports that the AUS data point is not applicable:
1. If it does not use an AUS to evaluate the Application;
2. When the applicant and co-applicant, if applicable, are not natural persons; or
3. For purchased Covered Loans. Comments 4(a)(35)-4 through -6.
5.24 Interest rate
A Financial Institution reports the interest rate in the manner described below unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3. 89 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
A Financial Institution reports the interest rate applicable to a Covered Loan or to an Application that is approved but not accepted. 12 CFR 1003.4(a)(21). For Applications that are denied, withdrawn or closed for incompleteness, a Financial Institution reports that this data point is not applicable. Comment 4(a)(21)-2. The following table describes which rate a Financial Institution reports depending on the type of transaction. For purposes of this table, the date a revised Loan Estimate or corrected Closing Disclosure is provided to the applicant or borrower is the date disclosed as the “Date Issued” on that revised or corrected disclosure. For an: Report:
Application approved but not accepted for fixedrate Covered Loan subject to Regulation Z’s Loan Estimate and Closing Disclosure requirements Application approved but not accepted for a fixed-rate Covered Loan not subject to Regulation Z’s Loan Estimate and Closing Disclosure requirements Application approved but not accepted for a variable-rate Covered Loan subject to Regulation Z’s Loan Estimate and Closing Disclosure requirements Rate stated in Loan Estimate (if no Closing Disclosure provided) or in Closing Disclosure (if provided), assuming it accurately reflects the rate when Financial Institution approved the Application. If a revised Loan Estimate (but no Closing Disclosure) was provided to the applicant prior to the end of the reporting period in which final action was taken or if a corrected Closing Disclosure was provided to the applicant prior to the end of the reporting period in which final action was taken, the Financial Institution reports the rate stated in the revised or corrected disclosure, as applicable. Otherwise, rate at the time Financial Institution approved the Application. Comments 4(a)(21)-1 and -2. Rate applicable when Financial Institution approved the Application. Comment 4(a)(21)-2. Rate stated in Loan Estimate (if no Closing Disclosure provided) or in Closing Disclosure (if provided), assuming it accurately reflects the rate when Financial Institution approved the Application. If a revised Loan Estimate (but no Closing Disclosure) was provided to the applicant prior to the end of the reporting period in which final action was taken or if a corrected Closing Disclosure was provided to the applicant prior to the end of the reporting period in which final action was taken, the Financial Institution 90 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
For an: Report:
Application approved but not accepted for a variable-rate Covered Loan not subject to Regulation Z’s Loan Estimate and Closing Disclosure requirements reports the rate stated in the revised or corrected disclosure, as applicable. Comments 4(a)(21)-1 and -2. Otherwise, if rate was known when Financial Institution approved the Application, the rate applicable when Financial Institution approved the Application. Comment 4(a)(21)-2. Otherwise, if rate was unknown when Financial Institution approved the Application, the fullyindexed rate based on the index applicable when the Financial Institution approved the Application. Comment 4(a)(21)-3. If rate was known when Financial Institution approved the Application, the rate applicable when Financial Institution approved the Application. Comment 4(a)(21)-2. If rate was unknown when Financial Institution approved the Application, the fully-indexed rate based on the index applicable when the Financial Institution approved the Application. Comment 4(a)(21)-3. Application denied, withdrawn, or closed for incompleteness Not applicable. Comment 4(a)(21)-2. Interest rate set forth in Closing Disclosure. If a corrected Closing Disclosure was provided to the borrower prior to the end of the reporting period in which final action was taken, the Financial Institution reports the rate stated in the corrected disclosure. Comment 4(a)(21)-1. Fixed-rate Covered Loan subject to Regulation Z’s Loan Estimate and Closing Disclosure requirements Fixed-rate Covered Loan not subject to Regulation Z’s Loan Estimate and Closing Disclosure requirements Interest rate applicable at loan closing or account opening. Comment 4(a)(21)-1. Interest rate set forth in Closing Disclosure. If a corrected Closing Disclosure was provided to the borrower prior to the end of the reporting period in which final action was taken, the Financial Institution reports the rate stated in the corrected disclosure. Comment 4(a)(21)-1. Variable-rate Covered Loan subject to Regulation Z’s Loan Estimate and Closing Disclosure requirements Variable-rate Covered Loan not subject to Regulation Z’s Loan Estimate and Closing Disclosure requirements If rate was known when Financial Institution closed loan or opened account, rate applicable at loan closing or account opening. Comment 4(a)(21)-1. 91 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
For an:
If rate was unknown when Financial Institution closed loan or opened account, the fully-indexed rate based on the index applicable to the Covered Loan at loan closing or account opening. Comment 4(a)(21)-3. Report:
5.25 Introductory rate period
A Financial Institution reports the introductory rate period in the manner described below unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3. For a Covered Loan, a Financial Institution reports the introductory rate period as the number of months from loan closing or account opening until the first date the interest rate may change. 12 CFR 1003.4(a)(26). For example, if an Open-End Line of Credit contains an introductory or “teaser” interest rate for two months after the date of account opening and the interest rate may adjust after that two month period, the Financial Institution reports the number of months as “2.” Comment 4(a)(26)-1. For a Covered Loan that includes an introductory interest rate period measured in a unit of time other than months, the Financial Institution reports the introductory period using an equivalent number of whole months without regard for any remainder. For example, if an Open-End Line of Credit contains an introductory interest rate for 50 days after the date of account opening, after which the interest rate may adjust, the Financial Institution reports the number of months as “1”. A Financial Institution reports “1” for any introductory interest rate period that is less than one whole month. Comment 4(a)(26)-5. For an Application, a Financial Institution reports the number of months from loan closing or account opening until the first date the interest rate could have changed under the proposed terms. Comment 4(a)(26)-1. If the period until the first date the interest rate could have changed under the proposed terms is measured in a unit of time other than months, the Financial Institution reports the introductory period using an equivalent number of whole months without regard for any remainder. A Financial Institution reports “1” if the introductory interest rate period could have been less than one whole month under the proposed terms. Comment 4(a)(26)-5. 92 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
A Financial Institution reports the number of months based on when the first interest rate adjustment may occur, even if an interest rate adjustment is not required to occur at that time and even if the rates that will apply, or the periods for which they will apply, are not known at loan closing or account opening. For example, if a Closed-End Mortgage Loan has a 30-year term and is an adjustable-rate product with an introductory interest rate for the first 60 months, after which the interest rate is permitted but not required to vary, the Financial Institution reports the number of months as “60.” Comment 4(a)(26)-1. A Financial Institution is not required to report introductory interest rate periods based on preferred rates unless the terms of the legal obligation provide that the preferred rate will expire at a certain defined date. Preferred rates include loan terms that provide that the initial underlying rate is fixed but that it may increase or decrease upon the occurrence of some future event, such as an employee leaving the employ of the Financial Institution, the borrower closing an existing deposit account with the Financial Institution, or the borrower revoking an election to make automated payments. Comment 4(a)(26)-2. A Financial Institution reports that this data point is not applicable for a fixed-rate Covered Loan or an Application for a fixed-rate Covered Loan. Comment 4(a)(26)-3.
5.26 Rate spread
A Financial Institution reports the rate spread in the manner described below unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3. For Covered Loans that are subject to Regulation Z and for Applications that are approved but not accepted, and that are subject to Regulation Z (other than assumptions, purchased Covered Loans, and Reverse Mortgages), a Financial Institution reports the difference between the Covered Loan’s annual percentage rate (APR) and a comparable transaction’s average prime offer rate (APOR) as of the date the Covered Loan’s interest rate was set. 12 CFR 1003.4(a)(12)(i). Where an application or a preapproval request is an Application under Regulation C, but for which no disclosures are required under Regulation Z, the Financial Institution reports that the data is not applicable. 93 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
If the Covered Loan is an assumption, Reverse Mortgage, a purchased Covered Loan, or is not subject to Regulation Z, the Financial Institution reports that the data point is not applicable. If an Application does not result in the Financial Institution originating a Covered Loan for a reason other than that the Application was approved but not accepted by the applicant, the Financial Institution reports that the data point is not applicable. Comment 4(a)(12)-7. The APOR is an APR that is derived from average interest rates and other loan pricing terms offered to borrowers by a set of creditors for mortgage loans that have low-risk pricing characteristics. 12 CFR 1003.4(a)(12)(ii). The Bureau publishes tables of current and historical APORs by transaction type on the FFIEC’s website at http://www.ffiec.gov/hmda and on the Bureau’s website at http://www.consumerfinance.gov. The methodology used to arrive at these APORs is also published on these websites. A Financial Institution may either use the APORs published on these websites or determine APORs itself by employing the methodology published on these websites. A Financial Institution that determines APORs itself, however, is responsible for correctly determining them in accordance with the published methodology. Comments 4(a)(12)-1 and -2. To determine the reportable rate spread, a Financial Institution can follow these steps:
For an Application (including a preapproval request) that was approved but not accepted, a Financial Institution might have only provided early Regulation Z disclosures, such as a Loan Estimate for a Closed-End Mortgage Loan or disclosures at the time of application under 12 CFR 1026.40 for an Open-End Line of Credit. In such cases where no subsequent disclosures are provided, a Financial Institution may rely on the APR as calculated and disclosed in the Loan Estimate or disclosures at the time of the application under 12 CFR 1026.40, as applicable. Comment 4(a)(12)-8.
2. Determine the APOR
a. Determine the Comparable Transaction
The rate spread is calculated using the APOR for a comparable transaction. Therefore, a Financial Institution must determine what transaction is comparable to the Covered Loan or approved but not accepted Application. To do so, the Financial Institution uses the Covered Loan’s or Application’s amortization type (i.e., fixed-rate or variable-rate) and loan term. For Open-End Lines of Credit, a Financial Institution must identify the most closely comparable closed-end transaction. Comment 4(a)(12)-4. For fixed-rate Covered Loans and Applications, the term for identifying the comparable transaction is the transaction’s maturity (i.e., the period until the last payment will be due under the Closed-End Mortgage Loan contract or Open-End Line of Credit agreement). If an Open-End Line of Credit has a fixed rate but no definite plan length, a Financial Institution can use a 30-year fixed-rate loan as the most closely comparable closed-end transaction. Financial Institutions may refer to the “Average Prime Offer Rates-Fixed” table on the FFIEC website when identifying a comparable fixed-rate transaction. Comment 4(a)(12)-4.i. For variable-rate Covered Loans and Applications, the term for identifying the comparable transaction is the initial, fixed-rate period (i.e., the period until the first scheduled rate adjustment). For example, five years is the relevant term for a variablerate transaction with a five-year, fixed-rate introductory period that is amortized over thirty years. If an Open-End Line of Credit has a variable rate and an optional, fixed-rate feature, a Financial Institution uses the rate table for variable-rate transactions. Comment 4(a)(12)-4.ii. When the term to maturity (or, for a variable-rate transaction, the initial fixed-rate period) is not in whole years, the Financial Institution uses the number of whole years 95 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
closest to the actual loan term (or the initial fixed-rate period). If the actual loan term (or the initial fixed-rate period) is exactly halfway between two whole years, the Financial Institution uses the shorter loan term. The Financial Institution rounds a term shorter than six months to one year, including a term for a variable-rate Covered Loan with no initial, fixed-rate period. Comment 4(a)(12)-4.iii. Term to Maturity or Initial Fixed-Rate Period Term for Comparable Transaction 10 years, 3 months 10 years 10 years, 9 months 11 years 10 years, 6 months 10 years 10 years, 6 months, 18 days 11 years 3 months 1 year If the amortization period is longer than the transaction’s term to maturity (or for an approved but not accepted Application would have been longer than the transaction’s term to maturity), a Financial Institution must use the term to maturity to determine the applicable APOR. Comment 4(a)(12)-4.iv. b. Determine the Rate Set Date The date used to determine the APOR for a comparable transaction is the date on which the Financial Institution set the interest rate for the final time before final action is taken. Comment 4(a)(12)-5. If the: The date used for APOR is the:
Rate was set pursuant to a lock agreement Date that the agreement fixed the interest rate 96 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Lock agreement was extended, but the rate was not re-set Date the Financial Institution exercised its discretion in setting the rate for final time before final action is taken Rate was re-set after the lock agreement was executed, and there was no program change Date that the Financial Institution exercised its discretion in setting the rate for final time before final action is taken Rate was re-set after the lock agreement was executed, and there was a program change Date of the program change, unless the Financial Institution changed the promised rate to the rate that would have been available to the borrower under the new program on the date of the original rate-lock, and the Financial Institution consistently follows that practice or the original lock agreement required that the new program’s rate as of the original rate-lock would be available. In that case, the date of the original rate-lock. Applicant or borrower did not execute a lock agreement Date on which the Financial Institution set the rate for final time before final action is taken Example: Borrower locks a rate of 2.5 percent on June 1 for a 30-year, variable-rate loan with a 5-year, fixed-rate introductory period. On June 15, the borrower decides to switch to a 30-year, fixed-rate loan, and the rate available to the borrower for that product on June 15 is 4.0 percent. On June 1, the 30-year, fixed-rate loan would have been available to the borrower at a rate of 3.5 percent. Ficus Bank offers the borrower the 3.5 percent rate (i.e., the rate that would have been available to the borrower for the fixed-rate product on June 1, the date of the original rate-lock) because the original agreement so provided or because Ficus Bank consistently follows that practice for borrowers who change loan programs. Ficus Bank should use June 1 as the rate-set date. If a Financial Institution received an Application from a broker and is responsible for reporting the approved but not accepted Application or resulting Covered Loan, (e.g., because the Financial Institution originated the loan), the rate-set date is the last date the Financial Institution set the rate with the broker, not the date the broker set the borrower’s rate. Comment 4(a)(12)-5. 97 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
c. Determine the Most Recently Available APOR as of Rate Set Date
A Financial Institution must compare the APR determined in Step 1 to the most recently available APOR that was in effect for the comparable transaction as of the rate-set date. The most recently available rate means the APOR set forth in the applicable table with the most recent effective date as of the date the interest rate was set. A Financial Institution cannot use an APOR before its effective date. Comment 4(a)(12)-6.
3. Determine the Rate Spread
A Financial Institution compares the APOR determined in step 2c, above, to the APR determined in step 1 above. Comment 4(a)(12)-6.
5.27 Non-amortizing features
A Financial Institution reports non-amortizing features in the manner described below unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3. A Financial Institution reports whether the contractual terms include or would have included:
(1) a balloon payment; (2) interest-only payments; (3) negative amortization; or (4) contractual terms, other than those listed above, that would allow for payments other than fully amortizing payments. 12 CFR 1003.4(a)(27). The HMDA Rule defines the terms balloon payment, interestonly payments, negative amortization, and fully amortizing payments by reference to Regulation Z, but without regard to whether the Covered Loan is subject to Regulation Z. Comment 4(a)(27). See 12 CFR 1026.18(s)(5)(i) for the definition of balloon payment, 12 CFR 1026.18(s)(7)(iv) for the definition of interest-only payments, and 12 CFR 1026.18(s)(7)(v) for information on when a contractual term would include negative amortization. 98 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Example: Ficus Bank originates a business-purpose transaction that is exempt from Regulation Z. The borrower, a corporation, uses the loan proceeds to finance the purchase of a Multifamily Dwelling. The loan is secured by a mortgage on the Multifamily Dwelling. The loan includes a balloon payment, as defined by Regulation Z, 12 CFR 1026.18(s)(5)(i), at the end of the loan term. Even though the borrower is not a natural person, the loan is for a business purpose, and a Multifamily Dwelling is not a “dwelling” under Regulation Z, Ficus Bank reports the business-purpose transaction as having a balloon payment.
5.28 Data points for certain loans subject to
Regulation Z
5.28.1 Total loan costs or total points and fees
A Financial Institution reports the total loan costs or total points and fees in the manner described below unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3. For Covered Loans subject to the Ability-to-Repay provisions of Regulation Z, 12 CFR 1026.43, a Financial Institution reports the following:
which Applications were received by the selling entity prior to October 3, 2015. Comment 4(a)(17)(i)-2.
2. The total points and fees charged in connection with the Covered Loan,
calculated pursuant to Regulation Z. The Financial Institution reports the total points and fees if the Covered Loan is not subject to Regulation Z’s Closing Disclosure requirements and is not a purchased Covered Loan. 12 CFR 1003.4(a)(17)(ii). Financial Institutions report that this data point is not applicable for transactions that are not subject to the Ability-to-Repay provisions of Regulation Z, such as Open-End Lines of Credit, Reverse Mortgages, and Covered Loans made primarily for business or commercial purposes. Comment 4(a)(17)(ii)-1. For transactions subject to the Ability-to-Repay provisions of Regulation Z for which a Closing Disclosure was provided, Financial Institutions report that this data point is not applicable. 12 CFR 1003.4(a)(17). Financial Institutions also report that this data point is not applicable for purchased Covered Loans. Comment 4(a)(17)(ii)-1. For Covered Loans subject to the total loan cost reporting requirement, if the amount of total loan costs changes because a Financial Institution provides a corrected Closing Disclosure, the Financial Institution reports the amount disclosed in the corrected Closing Disclosure if the corrected Closing Disclosure was provided to the borrower prior to the end of the reporting period in which loan closing occurred. For this purpose, the date the corrected Closing Disclosure was provided to the borrower is the date disclosed as the “Date Issued” on the corrected Closing Disclosure. Comment 4(a)(17)(i)-3. For Covered Loans subject to the total points and fees reporting requirement, if a Financial Institution determines that the transaction’s total points and fees exceeded the applicable limit and cures the overage pursuant to Regulation Z during the same reporting period in which closing occurred, the Financial Institution reports the revised amount of total points and fees. Comment 4(a)(17)(ii)-2. Example: Ficus Bank is required to submit HMDA data quarterly. It closes a Covered Loan on January 2, 2020, and cures an overage pursuant to Regulation Z on January 9, 2020. Ficus Bank reports the revised amount of total points and fees in both its quarterly LAR submitted for first quarter data by May 30, 2020 and its annual LAR submitted in 2021 for 2020 data. 100 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
5.28.2 Total borrower-paid origination charges
A Financial Institution reports the total borrower-paid origination charges in the manner described below unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3. For Covered Loans subject to the Closing Disclosure requirements of Regulation Z, 12 CFR 1026.19(f), the Financial Institution reports the total of all itemized origination charges that are designated borrower-paid at or before closing. 12 CFR 1003.4(a)(18). This total is disclosed on Line A of the Closing Cost Details page of the Closing Disclosure. For all other transactions, the Financial Institution reports that the data point is not applicable. A Financial Institution reports that the data point does not apply for purchased Covered Loans for which Applications were received by the seller prior to the effective date of the Closing Disclosure requirements of Regulation Z. Comments 4(a)(18)-1 and -2. If the total amount of borrower-paid origination charges changes because a Financial Institution provides a corrected Closing Disclosure pursuant to Regulation Z prior to the end of the reporting period in which the loan closing occurred, the Financial Institution reports the amount disclosed in the corrected Closing Disclosure. For this purpose, the date the corrected Closing Disclosure was provided to the borrower is the date disclosed as the “Date Issued” on the corrected Closing Disclosure. Comment 4(a)(18)-3.
5.28.3 Total discount points
A Financial Institution reports the total discount points in the manner described below unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3. For Covered Loans subject to the Closing Disclosure requirements of Regulation Z, 12 CFR 1026.19(f), a Financial Institution reports the points paid to the creditor to reduce the interest rate. 12 CFR 1003.4(a)(19). This total is disclosed on Line A.01 of the Closing Cost Details page of the Closing Disclosure. For all other transactions, a Financial Institution reports that the data point is not applicable. 101 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
A Financial Institution reports that the data point does not apply for purchased Covered Loans for which an Application was received by the seller prior to the effective date of the Closing Disclosure requirements of Regulation Z. Comments 4(a)(19)-1 and -2. If the total discount points change because a Financial Institution provides a corrected Closing Disclosure pursuant to Regulation Z prior to the end of the reporting period in which the loan closing occurred, the Financial Institution reports the amount disclosed in the corrected Closing Disclosure. For this purpose, the date the corrected Closing Disclosure was provided to the borrower is the date disclosed as the “Date Issued” on the corrected Closing Disclosure. Comment 4(a)(19)-3.
5.28.4 Lender credits
A Financial Institution reports lender credits in the manner described below unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3. For Covered Loans subject to the Closing Disclosure requirements of Regulation Z, 12 CFR 1026.19(f), the Financial Institution reports the amount of lender credits. 12 CFR 1003.4(a)(20). This total is disclosed in the second row under Line J on the Closing Cost Details page of the Closing Disclosure. For all other transactions, the Financial Institution reports that the data point is not applicable. A Financial Institution reports that the data point does not apply for purchased Covered Loans for which an Application was received by the seller prior to the effective date of the Closing Disclosure requirements of Regulation Z. Comments 4(a)(20)-1 and -2. If the amount of the lender credits changes because a Financial Institution provides a corrected Closing Disclosure pursuant to Regulation Z prior to the end of the reporting period in which the loan closing occurred, the Financial Institution reports the amount disclosed in the corrected Closing Disclosure. For this purpose, the date the corrected Closing Disclosure was provided to the borrower is the date disclosed as the “Date Issued” on the corrected Closing Disclosure. Comment 4(a)(20)-3.
5.28.5 Prepayment penalty term
A Financial Institution reports the prepayment penalty term in the manner described below unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3. 102 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
For Covered Loans and Applications subject to Regulation Z, other than Reverse Mortgages or purchased Covered Loans, a Financial Institution reports the term of any prepayment penalty. The term is reported in months. 12 CFR 1003.4(a)(22). A Financial Institution may rely on the definitions and official commentary to Regulation Z, 12 CFR 1026.32(b)(6)(i) or (ii), in determining whether a Covered Loan includes a prepayment penalty. For Covered Loans that are not subject to Regulation Z, Reverse Mortgages, purchased Covered Loans, and Covered Loans or Applications that have no prepayment penalty, the Financial Institution reports that this data point is not applicable.
5.28.6 HOEPA status
For a Covered Loan that is subject to the Home Ownership and Equity Protection Act of 1994 (HOEPA), as implemented in Regulation Z, 12 CFR 1026.32, the Financial Institution reports whether or not the Covered Loan is a high-cost mortgage under Regulation Z. 12 CFR 1003.4(a)(13). Generally, a Financial Institution will report whether or not a consumer credit transaction subject to Regulation Z and secured by a principal dwelling (as that term is interpreted under Regulation Z) is a high-cost mortgage. See 12 CFR 1026.32(a) and its official commentary to determine whether a Covered Loan is subject to HOEPA and whether or not it is a high-cost mortgage under Regulation Z. For an Application or a Covered Loan that is not subject to HOEPA, the Financial Institution reports that this data point is not applicable. Comment 4(a)(13).
5.29 Transaction indicators
A Financial Institution reports the transaction indicators in the manner described below unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3. A Financial Institution separately reports whether or not a Covered Loan is or an Application is for:
103 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Some mortgage loan originators may have obtained an NMLSR ID even if they are not required to obtain one for the particular transaction. Generally, if a mortgage loan originator has been assigned an NMLSR ID, a Financial Institution reports the mortgage loan originator’s NMLSR ID regardless of whether the mortgage loan originator is required to obtain an NMLSR ID for the particular transaction being reported. Comment 4(a)(34)-2. However, there are special rules for certain purchased Covered Loans. If a Financial Institution purchases a Covered Loan that is subject to 12 CFR 1026.36(g) and that was originated prior to January 10, 2014, the Financial Institution may report that the data point is not applicable or may report the NMLSR ID. If a Financial Institution purchases a Covered Loan that is not subject to 12 CFR 1026.36(g) and that was originated prior to January 1, 2018, the Financial Institution may report that the data point is not applicable or may report the NMLSR ID. If more than one individual associated with a Covered Loan or Application meets the definition of “mortgage loan originator,” as defined in Regulation G or Regulation H, a Financial Institution reports the NMLSR ID of the individual mortgage loan originator with primary responsibility for the transaction as of the date of action taken. A Financial Institution that establishes and follows a reasonable, written policy for determining which individual mortgage loan originator has primary responsibility for the reported transaction as of the date of action taken complies with this reporting requirement. Comment 4(a)(34)-3.
5.31 Type of purchaser
A Financial Institution reports the type of purchaser for a Covered Loan if the Financial Institution: (a) originated the Covered Loan it is reporting and sold it within the same calendar year; or (b) purchased the Covered Loan it is reporting and then sold it within the same calendar year. 12 CFR 1003.4(a)(11). When reporting the type of purchaser, a Financial Institution reports the type of entity that purchased the Covered Loan from the Financial Institution, using one of the following:
Fannie Mae.
Ginnie Mae.
Freddie Mac.
Farmer Mac.
105 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Private securitizer, which is an entity (other than one of the government-sponsored
enterprises listed in 1 through 4 immediately above) that the Financial Institution knows or reasonably believes will securitize the Covered Loan. Knowledge or reasonable belief could, for example, be based on the purchase agreement or other related documents, the Financial Institution’s previous transactions with the purchaser, or the purchaser’s role as a securitizer (such as an investment bank). If the Financial Institution selling the Covered Loan does not know or reasonably believe that the purchaser will securitize the loan, and the seller knows that the purchaser frequently holds or disposes of loans by means other than securitization, then the Financial Institution reports the Covered Loan as purchased by, as appropriate, one of the other types of purchasers. Comment 4(a)(11)-4. If the purchaser meets the criteria to be a private securitizer and fits within one of the other reportable categories in 6 through 10 below (including affiliate institution), the Financial Institution reports that the purchaser is a private securitizer. Comment 4(a)(11)-4.
Affiliate institution, which means a company that controls, is controlled by, or is under
common control with the Financial Institution. The term has the meaning set forth in the Bank Holding Company Act of 1956, 12 U.S.C. 1841 et seq. If a purchaser meets the criteria to be an affiliate institution and also fits within one of the other reportable types of purchaser in 7 through 10 below (but not private securitizer above), the Financial Institution reports that the purchaser is an affiliate institution. Comment 4(a)(11)-3.
Commercial bank, savings bank, or savings association.
Credit union, mortgage company, or finance company. A mortgage company is a
nondepository institution that purchases Covered Loans and, typically, originates Covered Loans. Comment 4(a)(11)-5.
Life insurance company.
Other, which is a purchaser that is not any of the above. A Financial Institution would report
the purchaser type of “other” if the purchaser was a bank holding company or thrift holding company that is not a private securitizer and is not an affiliate of the Financial Institution. Comment 4(a)(11)-7. If a Financial Institution sells some interest or interests in a Covered Loan but retains a majority interest in that Covered Loan, the Financial Institution does not report the sale or type of purchaser (i.e., it reports that this data point is not applicable). Comment 4(a)(11)-1. 106 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
If a Financial Institution sells all or a majority interest in the Covered Loan to more than one entity, the Financial Institution reports the type of purchaser based on the entity purchasing the greatest interest in the Covered Loan. Comment 4(a)(11)-1. Covered Loans “swapped” for mortgage-backed securities are to be treated as sales, and the purchaser is the entity receiving the Covered Loans that are swapped. Comment 4(a)(11)-2. A Financial Institution reports that this data point is not applicable:
1. If a Financial Institution sells some interest or interests in a Covered Loan but retains a
majority interest in the loan;
2. For an Application that is denied, withdrawn, closed for incompleteness, or approved but
not accepted; or
3. For a Covered Loan that the Financial Institution does not sell during the same calendar
year that it originated or purchased the Covered Loan. Comments 4(a)(11)-1 and -10. A Financial Institution records that the requirement to report type of purchaser is not applicable if the Financial Institution originated or purchased a Covered Loan and did not sell it during the calendar quarter for which the Financial Institution is recording the data. If the Financial Institution sells the Covered Loan in a subsequent quarter of the same calendar year, the Financial Institution records the type of purchaser on its LAR for the quarter in which the Covered Loan was sold. If a Financial Institution sells the Covered Loan in a succeeding year, the Financial Institution should not record or report the sale. Comment 4(a)(11)-9. 107 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
6. Recording and reporting
6.1 Recording
The HMDA Rule requires a Financial Institution to record the data about a Covered Loan or Application on a LAR within 30 calendar days after the end of the calendar quarter in which the Financial Institution takes final action on the Application or Covered Loan. 12 CFR 1003.4(f). A Financial Institution is not required to record all of its HMDA data for a quarter on a single LAR. Rather, a Financial Institution may record data on a single LAR or may record data on one or more LARs for different branches or different loan types (such as Home Purchase Loans or Home Improvement Loans, or loans on Multifamily Dwellings). Comment 4(f)-1. Other State or Federal regulations may require a Financial Institution to record its data on a LAR more frequently. Comment 4(f)-2. Financial Institutions may maintain their quarterly records in electronic or any other format, provided they can make the information available to their regulatory agencies in a timely manner upon request. Comment 4(f)-3. The 2020 HMDA Thresholds Rule amended Regulation C’s institutional coverage threshold for closed-end mortgage loans as of July 1, 2020. Pursuant to § 1003.4(f), financial institutions that originated fewer than 100 closed-end mortgage loans during 2018 or 2019, but more at least 25 closed-end mortgage loans in 2018 and 2019 and meet all of the other requirements under § 1003.2(g), must still record data on a loan/application register for the first quarter of 2020 by 30 calendar days after the end of the first quarter of 2020. These financial institutions are not, however, required to record closed-end data for the second or third quarters of 2020 because the deadline under § 1003.4(f) for recording such data falls after July 1, 2020. These financial institutions are also not required to report HMDA data collected in 2020 on closed-end mortgage loans (including closed-end data collected in 2020 before July 1). 108 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
6.2 Reporting
In addition to the required data discussed in Section 5, above, effective January 1, 2019, a Financial Institution must include the following when it submits its HMDA data:
A Financial Institution that is a subsidiary of a bank or savings association must complete its own LAR and submit it, directly or through its parent, to the appropriate Federal agency for the subsidiary’s parent. 12 CFR 1003.5(a)(2). A Financial Institution is a subsidiary of a bank or savings association (for purposes of reporting HMDA data to the same agency as the parent) if the bank or savings association holds or controls an ownership interest in the Financial Institution that is greater than 50 percent. Comment 5(a)-6.
6.2.1 Annual reporting
The HMDA Rule maintains the annual reporting requirement, but requires Financial Institutions to submit data electronically in accordance with the procedures published by the Bureau and posted at http://www.consumerfinance.gov/hmda. 12 CFR 1003.5(a)(5). Under the HMDA Rule, a Financial Institution must submit its annual LAR in electronic format to its appropriate Federal agency by March 1 of the year following the calendar year for which data are collected. Appendix A to Part 1003 (through December 31, 2018); 12 CFR 1003.5(a)(1)(i) (after December 31, 2018). An individual who is an authorized representative of the Financial Institution and who has knowledge regarding the submitted data must certify its accuracy and completeness. Appendix A to Part 1003 (through December 31, 2018); 12 CFR 1003.5(a)(1)(i) (after December 31, 2018). A Financial Institution must retain a copy of its submitted annual LAR for at least three years. 12 CFR 1003.5(a)(1)(i). Financial Institutions may retain their annual LARs in either paper or electronic form. Comment 5(a)-4. For more information on reporting under the HMDA Rule or on the electronic submission of data, please see http://www.consumerfinance.gov/hmda.
6.2.2 Quarterly reporting
The HMDA Rule requires some Financial Institutions to report data on a quarterly basis as well as on an annual basis. The quarterly reporting requirement is effective January 1, 2020. It applies to a Financial Institution that reported at least 60,000 originated Covered Loans and Applications (combined) for the preceding calendar year. The Financial Institution does not count purchased Covered Loans when determining whether the quarterly reporting requirement applies. If quarterly reporting is required, the Financial Institution must report all data 110 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
required to be recorded for the calendar quarter within 60 calendar days after the end of the calendar quarter. The quarterly reporting requirement does not apply, however, to the fourth quarter of the year. A Financial Institution subject to the quarterly reporting requirement reports its fourth quarter data as part of its annual submission. In its annual submission, a quarterly reporter will resubmit the data previously submitted for the first three calendar quarters of the year, including any corrections to the data, as well as its fourth quarter data. 12 CFR 1003.5(a)(ii).
6.3 Disclosure of data
6.3.1 Disclosure statement
Effective January 1, 2018, the HMDA Rule changes Regulation C’s disclosure statement requirements. The changes apply to data collected in 2017 and later years. Under the HMDA Rule, the FFIEC shall provide a notice to the Financial Institution that the Financial Institution’s disclosure statement (based on data submitted for the prior calendar year) is available. 12 CFR 1003.5(b)(1). No later than three business days (any calendar day other than a Saturday, Sunday, or legal public holiday) after receiving notice from the FFIEC, the Financial Institution must make available to the public, upon request, a written notice that clearly conveys that the Financial Institution’s disclosure statement may be obtained on the Bureau’s website at . 12 CFR 1003.5(b)(2); comment 5(b)-1. A Financial Institution may, but is not required to, use the sample notice in Attachment C to satisfy the HMDA Rule’s disclosure statement requirement. The notice may be made available in paper or electronic form. Comment 5(b)-2. A Financial Institution must make the notice available to the public for a period of five years. 12 CFR 1003.5(d)(1). At its discretion, a Financial Institution may also provide its disclosure statement and impose a reasonable fee for costs incurred reproducing or providing the statement. 12 CFR 1003.5(d)(2). Even if it provides the disclosure statement, a Financial Institution must comply with the notice requirement. 111 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
6.3.2 Modified LAR
Effective January 1, 2018, the HMDA Rule changes a Financial Institution’s obligations with respect to disclosing its modified LAR. The new requirements apply to data collected in 2017 and later years. Beginning in 2018, upon request from a member of the public, a Financial Institution must provide a written notice regarding the availability of its modified LAR. The written notice must clearly convey that the Financial Institution’s LAR, as modified by the Bureau to protect borrower and applicant privacy, may be obtained on the Bureau’s website at http://www.consumerfinance.gov/hmda. 12 CFR 1003.5(c). A Financial Institution may, but is not required to, use the sample notice in Attachment C to satisfy the HMDA Rule’s modified LAR requirement. Comment 5(c)-2. A Financial Institution may, but is not required to, use the same notice for purposes of this disclosure requirement and the disclosure statement requirement discussed in Section 6.3.1. The notice may be made available in paper or electronic form. Comment 5(c)-1. The notice must be made available in the calendar year following the calendar year for which the Financial Institution collected data. The notice must be made available for three years. 12 CFR 1003.5(d)(1). For example, in calendar year 2021, a Financial Institution must make available a notice that its modified LAR is available on the Bureau’s website if it was required to collect data in 2018, 2019, or 2020. At its discretion, a Financial Institution may also provide its LAR, as modified by the Bureau, and impose a reasonable fee for any costs incurred to reproduce or provide the data. 12 CFR 1003.5(d)(2). Even if it decides to provide the modified LAR, a Financial Institution must comply with the notice requirement.
6.3.3 Posted notices
The HMDA Rule modifies Regulation C’s posting requirement. Beginning January 1, 2018, a Financial Institution must post, in the lobby of its home office and each Branch Office physically located in an MSA or MD, a general notice about the availability of its HMDA data on the Bureau’s website. 12 CFR 1003.5(e). A Financial Institution may, but is not required to, use the sample notice in Attachment C to satisfy this requirement. In any case, the notice must clearly 112 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
convey that the Financial Institution’s HMDA data are available on the Bureau’s website at http://www.consumerfinance.gov/hmda. Comment 5(e).
6.3.4 Aggregated data
The FFIEC will use the annual data submitted pursuant to the HMDA Rule to make available aggregated data for each MSA and MD, showing lending patterns by property location, age of housing stock, and income level, sex, ethnicity, and race. 12 CFR 1003.5(f). 113 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Enforcement provisions
A violation of Regulation C, both before and after the effective date of the HMDA Rule, is subject to administrative sanctions, including civil money penalties. Compliance can be enforced by the Federal Reserve Board, Federal Deposit Insurance Corporation, the Office of the Comptroller of Currency, the National Credit Union Administration, HUD, or the Bureau. An error in compiling or recording data for a Covered Loan or Application is not a violation of HMDA or Regulation C if the error was unintentional and occurred despite maintenance of procedures reasonably adapted to avoid such errors. 12 CFR 1003.6(b)(1). However, a Financial Institution that obtains the property-location information for Applications and Covered Loans from third parties is responsible for ensuring that the information reported is correct. An incorrect entry for a census tract number is deemed a bona fide error and is not a violation if the Financial Institution maintains procedures reasonably adapted to avoid such an error. 12 CFR 1003.6(b)(2). Additionally, a census tract error is not a violation of HMDA or Regulation C if the Financial Institution obtained the census tract number from a geocoding tool on the Bureau’s website. However, a Financial Institution’s failure to provide the correct census tract number because the geocoding tool did not provide any census tract number for the property address is not excused as a bona fide error. Similarly, the failure to enter the correct census tract number because the Financial Institution entered an incorrect property address into the geocoding tool is not excused as a bona fide error. Comment 6(b)-2. If a Financial Institution makes a good-faith effort to record all data fully and accurately within 30 calendar days after the end of the calendar quarter as required under the HMDA Rule, but some data are inaccurate or incomplete, the inaccuracy or omission is not a violation of HMDA or Regulation C if the Financial Institution corrects or completes the data prior to submitting its annual LAR. 12 CFR 1003.6(c)(1). If a Financial Institution that is required to submit quarterly data makes a good-faith effort to report all data fully and accurately within 60 calendar days as required under the HMDA Rule, but some data are inaccurate or incomplete, the inaccuracy or omission is not a violation of HMDA or Regulation C if the Financial Institution corrects or completes the data prior to submitting its annual LAR. 12 CFR 1003.6(c)(2). 114 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Mergers and acquisitions
8.1 Determining coverage
After a merger or acquisition, the surviving or newly formed institution is subject to Regulation C, effective January 1, 2018, if it satisfies the coverage criteria for either a Depository Financial Institution or a Nondepository Financial Institution. See Section 3 for more information on institutional coverage. When determining whether the institution is covered, the surviving or newly formed institution must consider the combined assets, locations, and lending activities of the surviving or newly formed entity and the merged or acquired entities or acquired branches. Comment 2(g)-3.
8.2 Reporting responsibility for calendar
year of merger or acquisition
The following discusses the applicability of the HMDA Rule during the calendar year of a merger or acquisition:
If two institutions that are not subject to Regulation C merge, but the newly formed or surviving institution is subject to Regulation C, no data collection is required for the calendar year of the merger. When a branch office of an institution that is not subject to Regulation C is acquired by another institution that is not subject to Regulation C, and the acquisition results in the acquiring institution becoming subject to Regulation C, no data collection is required for the calendar year of the acquisition. If an institution that is subject to Regulation C and an institution that is not subject to Regulation C merge, and the surviving or newly formed institution is subject to Regulation C, for the calendar year of the merger, data collection is required for Covered Loans and Applications handled in the offices of the institution that was previously subject to Regulation C. For the calendar year of the merger, data collection is optional for Covered Loans and Applications handled in offices of the institution that was not previously subject to Regulation C. 115 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
When an institution that is subject to Regulation C acquires a branch office of an institution that is not subject to Regulation C, data collection is optional for Covered Loans and Applications handled by the acquired branch office for the calendar year of the acquisition. If an institution that is subject to Regulation C and an institution that is not subject to Regulation C merge and the surviving or newly formed institution is not subject to Regulation C, data collection is required for Covered Loans and Applications handled prior to the merger in the previously covered institution’s offices. After the merger date, data collection is optional for Covered Loans and Applications handled in the offices of the institution that was previously covered. When an institution that is not subject to Regulation C acquires a Branch Office of an institution that is subject to Regulation C but that acquisition does not result in the acquiring institution becoming subject to Regulation C, data collection is required for transactions of the acquired Branch Office that take place prior to the acquisition. Data collection by the acquired Branch Office is optional for transactions taking place in the remainder of the calendar year of the acquisition. If two or more institutions that are subject to Regulation C merge and the surviving or newly formed institution is also subject to Regulation C, data collection is required for the entire calendar year of the merger. The surviving or newly formed Financial Institution files either a consolidated submission or separate submissions for that calendar year. When one institution subject to Regulation C acquires a Branch Office of another covered institution, data collection is required for the entire calendar year of the merger. Data for the acquired Branch Office may be submitted by either Financial Institution. Comment 2(g)-4.
8.3 Changes to appropriate Federal agency
or TIN
Under the HMDA Rule, if the appropriate Federal agency for a Financial Institution changes, the Financial Institution must identify its new appropriate Federal agency in its annual submission for the year of the change. For example, if a Financial Institution’s appropriate Federal agency changes in February 2019, it must identify its new appropriate Federal agency beginning with the annual submission of its 2019 data by March 1, 2020. For a Financial Institution required to comply with quarterly reporting requirements, the Financial Institution also must identify its new appropriate Federal agency in its quarterly submissions, beginning 116 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
with its submission for the quarter of the change, unless the change occurs during the fourth quarter. Comment 5(a)-2. For example, if the appropriate Federal agency for a Financial Institution changes during February 2020, the Financial Institution must identify its new appropriate Federal agency beginning with its quarterly submission for the first quarter of 2020. If a Financial Institution obtains a new TIN, it should provide the new number in its subsequent data submission. For example, if two Financial Institutions that previously reported HMDA data merge and the surviving Financial Institution retained its LEI but obtained a new TIN, then the surviving Financial Institution should report the new TIN with its next HMDA data submission. Comment 5(a)-5.
8.4 Determining quarterly reporting
coverage
In the calendar year of a merger, the HMDA Rule requires a surviving or newly formed Financial Institution to report quarterly, beginning with the first quarterly submission due date after the date of the merger, if when added together the surviving or newly formed Financial Institution and all Financial Institutions that merged reported at least 60,000 originated Covered Loans and Applications for the preceding calendar year. Similarly, in the calendar year of an acquisition, the surviving Financial Institution is required to report quarterly, beginning with the first quarterly submission due date after the date of the acquisition, if when added together the surviving Financial Institution and the acquired Financial Institution(s) or Branch Office(s) reported at least 60,000 originated Covered Loans and Applications for the preceding calendar year. If a Financial Institution acquires one or more Branch Offices of another Financial Institution but does not acquire the Financial Institution, it is required to count only the originated Covered Loans and Applications for the Branch Offices(s) that it acquired. Comment 5(a)-1.ii. In the calendar year following a merger or acquisition, the surviving or newly formed Financial Institution is required to comply with the quarterly reporting requirements if a combined total of at least 60,000 originated Covered Loans and Applications is reported for the preceding calendar year by or for the surviving or newly formed Financial Institution and each Financial Institution or Branch Office that merged or was acquired. Comment 5(a)-1.iii. 117 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
8.5 Applicability of partial exemptions under
the 2018 Act after a merger or acquisition
Effective January 1, 2020, following a merger or acquisition, the surviving or newly formed Financial Institution is eligible for partial exemptions if the combined lending activity of the surviving or newly formed Financial Institution and the merged or acquired institutions or acquired branches fall below the threshold under § 1003.3(d)(2) or (3). Comment 3(d)-1. Following a merger or acquisition, the surviving or newly formed Financial Institution is not eligible for partial exemptions if either it or any of the institutions it acquired or with which it merged received a rating of “needs to improve record of meeting community credit needs” during each of its two most recent CRA examinations or a rating of “substantial noncompliance meeting community credit needs on its most recent CRA examination.” Comment 3(d)-2. The scenarios below discuss the application of partial exemptions under the HMDA Rule during the calendar year of a merger or acquisition. The scenarios refer to the partial exemptions for closed-end mortgage loans under § 1003.3(d)(2), but the same principles apply to the partial exemptions with respect to open-end lines of credit under § 1003.3(d)(3). If two institutions eligible for the partial exemption for closed-end mortgage loans merge and the surviving or newly formed Financial Institution meets all of the requirements for the partial exemption, the partial exemption for closed-end mortgage loans applies for the calendar year of the merger. Comment 3(d)-3.i. If two institutions eligible for the partial exemption for closed-end mortgage loans merge and the surviving or newly formed Financial Institution does not meet the requirements for the partial exemption, collection of optional data on closed-end mortgage loans is permitted but not required for the calendar year of the merger (even though the merger creates a Financial Institution that does not meet the requirements for the partial exemptions for closed-end mortgage loans). If a branch office of a Financial Institution that is eligible for the partial exemption is acquired by another Financial Institution that is eligible for the partial exemption, and the acquisition results in a Financial Institution that is not eligible for the partial exemption, collection of optional data for closed-end mortgage loans is permitted but not required for the calendar year of the acquisition. Comment 3(d)-3.ii. 118 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
If a Financial Institution that is eligible for the partial exemption for closed-end mortgage loans merges with a Financial Institution that is not eligible for the partial exemption and the surviving or newly formed Financial Institution is not eligible for the partial exemption, for the calendar year of the merger, collection of optional data for closed-end mortgage loans is required for covered loans and applications handled in the offices of the merged Financial Institution that was previously not eligible for the partial exemption. For the calendar year of the merger, collection of optional data for closed-end mortgage loans is permitted but not required for covered loans and applications handled in the offices of the merged Financial Institution that was previously eligible for the partial exemption. Comment 3(d)-3.iii. If a Financial Institution that is not eligible for the partial exemption for closed-end mortgage loans acquires a branch office of a Financial Institution that is eligible for the partial exemption, for the calendar year of the acquisition, collection of optional data for closed-end mortgage loans is permitted but not required for covered loans and applications handled by the acquired branch office. Comment 3(d)-3.iii. If a Financial Institution that is eligible for the partial exemption for closed-end mortgage loans merges with a Financial Institution that is not eligible for the partial exemption and the surviving or newly formed Financial Institution is eligible for the partial exemption, for the calendar year of the merger, collection of optional data for closed-end mortgage loans is required for covered loans and applications handled in the offices prior to the merger of the Financial Institution that was previously not eligible for the partial exemption. After the merger, collection of optional data for closed-end mortgage loans is permitted but not required for covered loans and applications handled in the offices of the institution that was previously not eligible for the partial exemption. If a Financial Institution remains eligible for the partial exemption for closed-end mortgage loans after acquiring a branch or office of a Financial Institution that is not eligible for the partial exemption, collection of optional data for closedend mortgage loans is required for transactions of the acquired branch office that took place prior to the acquisition. Collection of optional data for closed-end mortgage loans by the acquired branch office is permitted but not required for transactions taking place in the remainder of the calendar year after the acquisition. Comment 3(d)-3.iv. 119 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
or nondepository institution should review the 2018 changes as well as the loan-volume thresholds’effective dates. Financial Institutions that are not insured depository institutions or insured credit unions are not eligible for either of the partial exemptions. For more information on which institutions are subject to the HMDA Rule, see Section 3 of this guide. An institution can also use the HMDA Institutional Coverage Charts to help it determine if it is subject to Regulation C, as amended by the HMDA Rule. However, the HMDA Institutional Coverage Charts and this guide are not substitutes for the HMDA Rule. For more information on the partial exemptions, see Section 4.3. Second, a Financial Institution must assess which of its products and services involve Covered Loans and reportable activity under the HMDA Rule. For more information on which transactions relate to Covered Loans and reportable activity, see Section 4 of this guide. It is important to note that the HMDA Rule may not require a Financial Institution to report Open-End Lines of Credit. Initially, a Financial Institution is not required to collect or report information about Open-End Lines of Credit if it originated fewer than 500 Open-End Lines of Credit in either of the preceding two calendar years. Effective January 1, 2022, a Financial Institution is not required to collect or report information about Open-End Lines of Credit if it originated fewer than 200 Open-End Lines of Credit in either of the preceding two calendar years. For more information on Open-End Lines of Credit, Covered Loans, and Excluded Transactions, see Section 4.1 of this guide. After determining which of its products and services involve transactions that must be reported, a Financial Institution can begin to assess which of its departments, systems, and staff will be affected. Third, the Financial Institution should determine what information it must report and how it will collect this information. The information that a Financial Institution must report might vary depending on the type of transaction being reported. For example, a Financial Institution may not be required to collect and report the same information for a purchased Covered Loan as for an originated Covered Loan. It might not be required to report the same information for a business-purpose loan as for a consumer-purpose loan. Additionally, effective May 24, 2018, the HMDA Rule does not require certain insured depository institutions and insured credit unions to collect, record, or report certain data points if a partial exemption applies to a transaction. For more information on the partial exemptions, see Section 4.3. 121 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
It is important to note that certain financial institutions may no longer be subject to HMDA’s closed-end requirements as of July 1, 2020, because they originated fewer than 100 closed-end mortgage loans during 2018 or 2019, and may therefore stop collecting, recording, and reporting HMDA data as of July 1, 2020. These financial institutions are not required to report HMDA data collected in 2020 on closed-end mortgage loans (including closed-end data collected in 2020 before July 1).22 For more information on the recording HMDA data, see
Section 6.1.
After determining what information must be collected and reported for reportable transactions, a Financial Institution can refine its assessment regarding which of its systems, departments, and staff will be affected by the HMDA Rule.
9.1.1 Identifying changes to business processes, policies,
and systems
The requirements of the HMDA Rule may affect a number of a Financial Institution’s business systems, processes, and policies. A review should be conducted of existing business processes, policies, and systems that the Financial Institution, its agents, and other business partners use. Identifying impacts early will allow the Financial Institution to understand what changes will be needed to support ongoing compliance. When reviewing its existing processes, policies, and systems, a Financial Institution should consider the HMDA Rule’s requirement to submit data electronically beginning in 2018. Beginning in 2018, Financial Institutions will not be able to use paper-based submissions for HMDA data. The Bureau has created a web-based tool for submission of HMDA data. Financial Institutions should become familiar with the new web-based submission tool and be able to use it to submit data beginning in 2018. For more information on the web-based submission tool, see http://www.consumerfinance.gov/hmda/. 22 Note, though, that other laws or regulations may require collection of certain data on home loan activity. For example, Regulation B includes an independent requirement to collect information regarding the applicant’s ethnicity, race, sex, marital status, and age where the credit sought is primarily for the purchase or refinancing of a dwelling that is or will be the applicant’s principal residence and will secure the credit. 122 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Financial Institutions may need to revise or develop processes and policies to comply with the changes to transactional coverage. For example, a Financial Institution may need to develop new processes and policies to comply with the reporting requirements for Open-End Lines of Credit.
9.1.2 Identifying impacts to key service providers or
business partners
Financial Institutions should review their arrangements and agreements with third parties engaged for services related to mortgage or other support activities. Close coordination and discussion of implementation plans with these vendors and business partners is critical to ensure that the services for which they are engaged will continue to support the Financial Institution’s business needs and comply with all regulatory and legal obligations. Third-party relationships may need to be reviewed and adjusted to satisfy requirements for collecting, recording, or reporting required HMDA data, updating compliance and quality control systems and processes, and ensuring record management requirements are in place. If the Financial Institution seeks the assistance of vendors or business partners, it is responsible for understanding the extent of the assistance that they provide. Also, the data collection and reporting requirements in the HMDA Rule reinforce the need to assess current integrations between the Financial Institution’s technology platforms and those of its third-party providers to determine what updates are necessary. Software providers, other vendors, and business partners may offer compliance solutions that can assist with any necessary changes. Identifying these key partners will depend on the Financial Institution’s business model. For example, Financial Institutions may find it helpful to coordinate and discuss potential implementation issues with their correspondents, secondary market partners, and technology vendors. In some cases, institutions may need to negotiate revised or new contracts with these parties, or seek a different set of services. The Bureau expects supervised banks and nonbanks to have an effective process for managing the risks of service provider relationships. For more information, see CFPB Bulletin 2012-03 at http://files.consumerfinance.gov/f/201204_cfpb_bulletin_service-providers.pdf. 123 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
9.2 Implementation and compliance
management support activities
9.2.1 Implementation and compliance management
Financial Institutions should develop implementation plans and follow change management procedures to implement the requirements of the HMDA Rule based on an assessment of impacts. The plans should be developed in consultation with, or reviewed by, key stakeholders such as legal, compliance, and information technology departments. Implementation plans should be proactively and clearly communicated to the Board of Directors and senior management. Policies, procedures, and process maps may need to be updated to reflect the changes made to business processes in response to the requirements of the HMDA Rule. In addition, Financial Institutions’ compliance management systems and other risk management supporting activities may need to be adjusted to reflect the requirements of the HMDA Rule. The HMDA Rule changes the way that HMDA data will be disclosed. These changes will require Financial Institutions to provide new notices and post revised notices. They may also affect policies and procedures. A Financial Institution may, but is not required to, use the model notices in Attachment C. For more information on disclosure requirements, see Section 6.3 of this guide. The HMDA Rule’s changes regarding the collection and reporting of an applicant’s ethnicity, race, and sex will require that Financial Institutions revise their collection forms or Application forms. For more information on collecting ethnicity, race, and sex information, see Section 5.1 of this guide and appendix B to the HMDA Rule. When implementing its compliance plan, a Financial Institution should note that many of the HMDA Rule’s effective dates are applicable based on when a Financial Institution takes final action, not when it received an Application.
9.2.2 HMDA responsibilities
A Financial Institution’s management should ensure that procedures and systems exist to collect and maintain accurate data for each Covered Loan and Application that the Financial Institution 124 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
is responsible for reporting. The individual(s) assigned responsibility for preparing and maintaining the data should understand the regulatory requirements and be provided the resources and tools needed to produce complete and accurate data. Appropriate record entries for a Covered Loan or Application must be made on a LAR within 30 calendar days after the end of the calendar quarter in which the final action occurs (such as origination or purchase of a Covered Loan, or denial or withdrawal of an Application). The data must be submitted on time, and the institution should respond promptly to any questions that may arise during the processing of data submitted. An authorized representative of the Financial Institution with knowledge of the data submitted must certify the accuracy and completeness of the annual data submitted.
9.2.3 Staffing and training
To ensure that it can meet its obligations under the HMDA Rule, a Financial Institution should evaluate current staffing levels and relevancy and adequacy of training provided to employees. These employees likely include operations and lending-related staff such as loan officers, processors, compliance, and quality-control staff, as well as others who approve, process, or monitor mortgage loans. Training may also be required for other individuals that the Financial Institution, its agents, or its business partners employ. Execution of tasks related to the preparation of reports or records are likely performed by compliance personnel of Financial Institutions. For some Financial Institutions, however, the data intake and transcribing stage could involve loan officers or processors whose primary function is to evaluate or process Applications. For example, loan officers may obtain information from applicants and input that information into the reporting system. 125 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
ATTACHMENT A:
126 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
ATTACHMENT B:
Action taken chart
Scenarios Reportable
Action Taken Reportable Date
Financial Institution made a credit decision approving an Application, including a preapproval request, before loan closing or account opening and that credit decision resulted in a Covered Loan being originated. Comments 4(a)(8)(i)-1. Financial Institution made counteroffer and applicant accepted resulting in a Covered Loan being originated. Comments 4(a)(8)(i)-9 and 4(a)(8)(ii)-5. Loan originated Generally, loan closing or account opening date. If applicable, can be: later date of initial funds disbursement; date Financial Institution acquired Covered Loan from the party that initially received the Application; or, for a construction-topermanent loan, date Covered Loan converts to permanent financing Financial Institution purchased a Covered Loan after closing or account opening, and Financial Institution did not make a credit decision on the Application prior to closing or account opening. Comments 4(a)(8)(i)-2 and 4(a)(8)(ii)-6. Financial Institution made a credit decision on an Application prior to closing or account opening, but repurchased the Covered Loan from another entity to which the Financial Institution had sold it. Comments 4(a)(8)(i)-2 and 4(a)(8)(ii)-6. Loan purchased Date of purchase 127 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Financial Institution made a credit decision approving an Application before loan closing or account opening, all conditions were satisfied, Financial Institution agreed to extend credit, but a Covered Loan was not originated. Comments 4(a)(8)(i)-3, 4(a)(8)(i)-13, and 4(a)(8)(ii)-4. Financial Institution made a credit decision approving an Application subject to conditions that are solely customary commitment or closing conditions,23 and the conditions were not all met. Comments 4(a)(8)(i)-13 and 4(a)(8)(ii)-4. Financial Institution made a credit decision approving an Application, subject solely to outstanding conditions that are customary commitment or closing conditions, but applicant failed to respond or a Covered Loan was not originated. Comments 4(a)(8)(i)-3 and 4(a)(8)(ii)-4. Financial Institution made a credit decision approving an Application, all underwriting and creditworthiness conditions24 were met, outstanding conditions were solely customary commitment or closing conditions, and applicant expressly withdrew before a Covered Loan was originated. Comments 4(a)(8)(i)-13 and 4(a)(8)(ii)-4. Covered Loan was originated, but Borrower rescinded after closing and before Financial Institution was required to submit its LAR containing information for the Covered Loan. Comments 4(a)(8)(i)-10 and 4(a)(8)(ii)-4. Application approved but not accepted Any reasonable date, such as approval date, deadline for accepting offer, or date file was closed 23 Customary commitment or closing conditions include: a clear-title requirement, an acceptable property survey, acceptable title insurance binder, clear termite inspection, a subordination agreement from another lienholder, and, where the applicant plans to use the proceeds from the sale of one home to purchase another, a settlement statement showing adequate proceeds from the sale. Comment 4(a)(8)(i)-13.ii. 24 Underwriting or creditworthiness conditions include: conditions that constitute a counter-offer, (such as a demand for a higher down-payment), satisfactory debt-to-income or loan-to-value ratios, a determination of need for private mortgage insurance, a satisfactory appraisal requirement, or verification or confirmation, in whatever form the Financial Institution requires, that the applicant meets underwriting conditions concerning applicant creditworthiness, including documentation or verification of income or assets. Comment 4(a)(8)(i)-13.iii. 128 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Financial Institution denied an Application before applicant withdrew it and before file was closed for incompleteness. Comments 4(a)(8)(i)-4 and 4(a)(8)(ii)-2. Financial Institution provided conditional approval specifying underwriting or creditworthiness conditions that were not all met. Comments 4(a)(8)(i)-13 and 4(a)(8)(ii)-2. Application denied Date Application is denied or date notice sent to applicant Financial Institution made a counteroffer to lend on different terms than applicant’s initial request, and applicant did not accept the counteroffer, declined to proceed, or failed to respond. Comments 4(a)(8)(i)- 9 and 4(a)(8)(ii)-2. Application denied (based on the original terms requested by applicant) Date Application is denied or date notice sent to applicant Financial Institution made counteroffer to lend on terms different than applicant’s initial request, applicant agreed to proceed with terms of counteroffer, then Financial Institution conditionally approves application subject to underwriting or creditworthiness conditions, and applicant expressly withdraws before satisfying all underwriting and creditworthiness conditions and before the Financial Institution denies the Application or closes the file for incompleteness. Comment 4(a)(8)(i)-9. Application withdrawn Date the express withdrawal was received or date shown on the notification form (if written withdrawal) 129 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Application expressly withdrawn by applicant before Financial Institution made a credit decision denying or approving the Application and before file was closed for incompleteness. Comments 4(a)(8)(i)-5 and 4(a)(8)(ii)-3. Financial Institution provided conditional approval specifying underwriting or creditworthiness conditions, and the Application was expressly withdrawn by the applicant before the applicant satisfied all specified underwriting or creditworthiness conditions and before the Financial Institution denied the loan or closed the file for incompleteness. Comments 4(a)(8)(i)-5 and 4(a)(8)(ii)-3. Application withdrawn Date the express withdrawal was received or date shown on the notification form (if written withdrawal) Financial Institution approved an Application, subject to underwriting or creditworthiness conditions, sent notice of incompleteness under Regulation B, but the applicant failed to respond within the specified time. Comments 4(a)(8)(i)-13 and 4(a)(8)(ii)-2. Applicant had not satisfied all underwriting or creditworthiness conditions, Financial Institution sent written notice of incompleteness under Regulation B, and the applicant did not respond to the request for additional information within the period of time specified in the notice. Comments 4(a)(8)(i)-6 and 4(a)(8)(ii)-2. File closed for incompleteness Note: A preapproval request that is closed for incompleteness is not reportable under HMDA Date file was closed or date notice sent to applicant Applicant had not satisfied all underwriting or creditworthiness conditions, Financial Institution sent written notice of incompleteness under Regulation B, the applicant did not respond, then the Financial Institution provided notice of adverse action on basis of incompleteness under Regulation B. Comments 4(a)(8)(i)-6 and 4(a)(8)(ii)-2. Either file closed for incompleteness or application denied Note: A preapproval request that is closed for incompleteness is not reportable under HMDA Date file was closed, Application was denied (as applicable), or notice sent to applicant 130 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Application was a request for a preapproval under a Preapproval Program, the Financial Institution approved the preapproval request, but the Application did not result in the Financial Institution originating a Covered Loan. Comments 4(a)(8)(i)-8 and 4(a)(8)(ii)-4. Preapproval request approved but not accepted Any reasonable date, such as approval date, deadline for accepting offer, or date file was closed Application was request for a preapproval under Preapproval Program, and the Financial Institution made a credit decision denying the preapproval request. Comments 4(a)(8)(i)-7 and 4(a)(8)(ii)-2. Preapproval request denied Date preapproval request was denied or date notice sent to applicant 131 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
ATTACHMENT C:
Sample notices
Below is a sample notice that can be provided to members of the public upon request to satisfy § 1003.5(b)(2) and (c). The following language is suggested, but is not required. Home Mortgage Disclosure Act Notice The HMDA data about our residential mortgage lending are available online for review. The data show geographic distribution of loans and applications; ethnicity, race, sex, age and income of applicants and borrowers; and information about loan approvals and denials. These data are available online at the Consumer Financial Protection Bureau’s Web site (www.consumerfinance.gov/hmda). HMDA data for many other financial institutions are also available at this Web site. Below is a sample posted notice that can be used to satisfy § 1003.5(e) and inform the public of availability of HMDA data. The following language is suggested, but is not required. Home Mortgage Disclosure Act Notice The HMDA data about our residential mortgage lending are available online for review. The data show geographic distribution of loans and applications; ethnicity, race, sex, age and income of applicants and borrowers; and information about loan approvals and denials. HMDA data for many other financial institutions are also available online. For more information, visit the Consumer Financial Protection Bureau’s Web site (www.consumerfinance.gov/hmda). 132 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.1
Appendix
Intro
A: Overview of Data
Requirements Chart
B: HMDA Small Entity
Compliance Guide
C: Instructions on
Collection of Data on
Ethnicity, Race, and Sex
D: Institutional Coverage
Chart
E: Transactional
Coverage Chart
F: Partial Exemptions
Charts
G: Data Fields and Data
Points Chart
H: Regulation C
I: Official Interpretations to Regulation C
J: Federal HMDA
Reporting Agencies
K: HMDA Poster
APPENDIX C: Instructions on Collection of
Data on Ethnicity, Race, and Sex
The following is a copy of the CFPB’s HMDA Collection and Reporting of HMDA Information about Ethnicity and Race chart, a reference tool summarizing the options available for collection and reporting of HMDA Ethnicity and Race data. This Chart is not a substitute for Regulation C. Regulation C and its official interpretations (also known as the commentary) are the definitive sources of information regarding its requirements. Regulation C and its official interpretations are available in Appendix H and I of this Guide and at www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1003/.
Effective January 1, 2017
Collection and Reporting of HMDA Information about Ethnicity and Race This chart summarizes the options available to financial institutions to collect and report HMDA race and ethnicity information. Current Regulation C, which implements HMDA, requires certain financial institutions to collect and report information about the ethnicity, race, and sex of applicants for mortgages. Regulation C, as amended by the 2015 HMDA Rule and the 2017 HMDA Rule, will generally require financial institutions to permit applicants to self-identify using disaggregated ethnicity and race categories* beginning January 1, 2018, but which provides a transition rule for applicant data collected prior to January 1, 2018 where final action is taken on or after January 1, 2018. However, because Regulation B generally prohibits creditors from asking for information about ethnicity and race unless authorized by law, including by Regulation C, the Bureau Official Approval Notice issued on September 23, 2016 allows creditors, at their option, at any time from January 1, 2017, through December 31, 2017, to permit applicants to selfidentify using the disaggregated ethnicity and race categories* provided in appendix B to Regulation C, as amended by the 2015 HMDA final rule. Further, on September 20, 2017, the Bureau issued an amendment to Regulation B (2017 Regulation B Rule) to allow creditors flexibility concerning the collection of applicant ethnicity and race information in certain additional specified circumstances.
Application year
Final action year
Ethnicity and race collection and reporting requirements Regulatory references 2017 2017 Collect aggregate and report aggregate, OR Current Regulation C, effective January 1, 2017 (12 CFR part 1003, appendices A and B) 2017 2017 Collect disaggregated and report aggregate Bureau Official Approval Notice (81 FR 66930) 2017 2018 Collect aggregate and report aggregate, OR Current Regulation C, effective January 1, 2017 (12 CFR part 1003, appendices A and B) AND transition rule, effective January 1, 2018 (2015 HMDA Final Rule, comment 4(a)(10)(i)-2) 2017 2018 Collect disaggregated and report aggregate, OR Bureau Official Approval Notice (81 FR
66930) AND
transition rule, effective January 1, 2018
(2015 HMDA Final Rule, comment
4(a)(10)(i)-2)
2017 2018 Collect disaggregated and report disaggregated Bureau Official Approval Notice (81 FR 66930) 2018 and beyond 2018 and beyond Collect disaggregated and report disaggregated, AND 2015 HMDA Rule (80 FR 66127) AND 2017 HMDA Rule (82 FR 43088) 2018 and beyond 2018 and beyond Report whether ethnicity, race, and sex were collected on the basis of visual observation or surname 2015 HMDA Rule (80 FR 66127) AND 2017 HMDA Rule (82 FR 43088) *Only an applicant may self-identify using the disaggregated ethnicity and race categories. When a financial institution collects ethnicity, race, and sex on the basis of visual observation or surname for an application taken in person because the applicant chose not to provide the information, the financial institution must select from the aggregate categories. Prior to the 2015 HMDA Rule, Regulation C required that the financial institution note the ethnicity, race, and sex on the basis of visual observation if the applicant chose not to furnish the information and the application was made in person, but the financial institution is not required to report that ethnicity, race, and sex were collected on the basis of visual observation. Additionally, the 2017 Regulation B Rule and the 2017 HMDA Rule permit certain creditors, at their option to voluntarily collect and report, respectively, certain ethnicity, race, and sex information about applications for certain mortgage loans. This chart provides an overview of the ethnicity and race collection and reporting requirements under HMDA, Regulation C, the Bureau’s Official Approval Notice, and certain aspects of Regulation B. It does not by itself establish any binding obligations. It is intended only to act as a reference and not as a substitute for the regulation or its official commentary. Always consult the regulation text and official commentary for a complete understanding of the law. Version 2.0, 10/16/2017
Appendix
Intro
A: Overview of Data
Requirements Chart
B: HMDA Small Entity
Compliance Guide
C: Instructions on
Collection of Data on
Ethnicity, Race, and Sex
D: Institutional Coverage
Chart
E: Transactional
Coverage Chart
F: Partial Exemptions
Charts
G: Data Fields and Data
Points Chart
H: Regulation C
I: Official Interpretations to Regulation C
J: Federal HMDA
Reporting Agencies
K: HMDA Poster
APPENDIX D: Institutional Coverage Chart
The following is a copy of the CFPB’s HMDA Institutional Coverage Chart, a reference tool illustrating the criteria to help determine whether an institution is covered by Regulation C in 2022. This copy was last updated on April 16, 2020. This Chart is not a substitute for Regulation C. Regulation C and its official interpretations (also known as the commentary) are the definitive sources of information regarding its requirements. Regulation C and its official interpretations are available in Appendix H and I of this Guide and at www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1003/.
Consumer Financial HMDA institutional coverage Protection Bureau The precise criteria for whether an institution is covered by Regulation C are codified in 12 CFR § 1003.2(g). These criteria are illustrated by the following diagrams. Coverage criteria | Effective January 1, 2022¹ Is the institution a bank, credit union, or savings association?
§
§
Depository Institution Yes
No
On the preceding December 31, did the total assets of the institution exceed the asset threshold2? Yes No Yes On the preceding December 31, did the institution have a home or branch office in a Metropolitan Statistical Area (MSA)? No Yes In the preceding calendar year, did the institution originate at least one home purchase loan or refinancing of a home purchase loan secured by a first lien on a one- to four-unit dwelling? No Yes Is the institution federally insured or regulated; was the mortgage loan referred to above insured, guaranteed, or supplemented by a Federal agency; or was the loan intended for sale to Fannie Mae or Freddie Mac? No Yes Did the institution originate at least3:
100 closed-end mortgage loans in each of the two preceding calendar years; or 200 open-end lines of credit in each of the two preceding calendar years? The institution is a depository financial institution covered by Regulation C The institution is not covered No Nondepository Institution Is the institution a for-profit mortgagelending institution (other than a bank, savings association, or credit union)? No Yes Did the institution either:
Have a home or branch office in an
MSA on the preceding December
31, or
Receive applications for, originate, or purchase at least five home purchase loans, home improvement loans, or refinancings related to property located in the same MSA or Metropolitan Division (MD) in the preceding calendar year? No Yes Did the institution originate at least3:
100 closed-end mortgage loans in each of the two preceding calendar years; or 200 open-end lines of credit in each of the two preceding calendar years? No Yes The institution is a nondepository financial institution covered by Regulation C The institution is not covered 1 This chart is effective January 1, 2022. Prior to January 1, 2022, the open-end line of credit threshold is temporarily set at 500. Prior to July 1, 2020, the closed-end mortgage loan threshold is 25. 2 Every year, the Bureau announces the size of the asset threshold in the Federal Register. The asset threshold may change from year to year based on changes in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers. 3 Some transactions are not HMDA reportable and are excluded from the coverage criteria. For more information, please see § 1003.3(c) of Regulation C. This is a compliance aid issued by the Consumer Financial Protection Bureau. The Bureau published a policy statement on compliance aids, available at consumerfinance.gov/policy-compliance/rulemaking/final-rules/policy-statement-compliance-aids, that explains the Bureau’s approach to compliance aids. Version 5.0, 4/16/2020 § § § §
Appendix
Intro
A: Overview of Data
Requirements Chart
B: HMDA Small Entity
Compliance Guide
C: Instructions on
Collection of Data on
Ethnicity, Race, and Sex
D: Institutional Coverage
Chart
E: Transactional
Coverage Chart
F: Partial Exemptions
Charts
G: Data Fields and Data
Points Chart
H: Regulation C
I: Official Interpretations to Regulation C
J: Federal HMDA
Reporting Agencies
K: HMDA Poster
APPENDIX E: Transactional Coverage Chart
The following is a copy of the CFPB’s HMDA Transactional Coverage Chart, effective January 1, 2022, a reference tool illustrating one approach to help determine whether a transaction is reportable under HMDA. This Chart is not a substitute for Regulation C. Regulation C and its official interpretations (also known as the commentary) are the definitive sources of information regarding its requirements. Regulation C and its official interpretations are available in Appendix H and I of this Guide and at www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1003/.
HMDA transactional coverage Consumer Financial Protection Bureau Effective January 1, 2022 Under HMDA and Regulation C, a transaction is reportable only if it is an Application for, an origination of, or a purchase of a Covered Loan. These materials illustrate one approach to help determine whether a transaction involves a Covered Loan. If the transaction involves a Covered Loan, it is reported only if the institution meets the applicable loan-volume thresholds. Terms that are defined in Regulation C are capitalized in this document for ease of reference. Click on the numbers below to view the instructions for each step. Does the transaction involve a Covered Loan? No Yes Transaction involves a Covered Loan 1 Excluded by its purpose? page 2 2 Secured by a lien on a Dwelling? page 3 3 Involve an extension of credit? page 4 4 Other exclusions apply? page 5 Does not involve a Covered Loan Yes No This is a compliance aid issued by the Consumer Financial Protection Bureau. The Bureau published a policy statement on compliance aids, available at consumerfinance.gov/policy-compliance/rulemaking/final-rules/policy-statement-compliance-aids, that explains the Bureau’s approach to compliance aids. Version 4.0, 4/16/2020
1 Is the transaction excluded by its purpose?
Is the transaction primarily for agricultural purposes?
NOTE: Agricultural-purpose transactions include transactions that are secured by a Dwelling that is located on real property that is used primarily for agricultural purposes. § 1003.3(c)(9) Is the transaction otherwise made primarily for a business or commercial purpose? § 1003.3(c)(10) Is the transaction also:
a Home Improvement Loan? § 1003.2(i), a Home Purchase Loan? § 1003.2(j), or a Refinancing? (Including cash-out Refinancing) § 1003.2(p) Proceed to Step 2 No Yes Does not involve a Covered Loan Consumer Financial Protection Bureau back to page 1 page 2 of 6 § § §
Mixed-use property if primary use is not residential Transitory residences Structures originally designed as Dwellings but used exclusively for commercial purposes Properties for long-term housing and medical care if primary use is not residential
§ § §
§
§ § §
§
§
§
§
§
§
§ §
§ § §
§ §
§ § §
§ §
§
§
§
§
§
§
§
§
2 Is the transaction secured by a lien on a Dwelling?¹ Proceed to Step 3 Does not involve a Covered Loan Is the transaction secured by a lien on a Dwelling?¹ Yes No Use the table below to help determine whether the transaction is secured by a lien on a Dwelling. Single family structures Multifamily structures Mixed-use purposes Dwelling Principal residences Apartment buildings or complexes Manufactured home communities Condominium buildings or complexes Cooperative buildings or complexes Mixed-use property if primary use is residential Properties for long-term housing and related services (such as assisted living for senior citizens or supportive housing for people with disabilities) Properties for long-term housing and medical care if primary use is residential Second homes Vacation homes Manufactured Homes or other factory built homes Investment properties Individual condominium units Detached homes Individual cooperative units Not a Dwelling Not a Dwelling Not a Dwelling Transitory residences Transitory residences Recreational vehicles Hotels Boats Hospitals and properties used to provide medical care (such as skilled nursing, rehabilitation, or long-term medical care) Campers Travel trailers Park model RVs Floating homes Houseboats Mobile homes constructed before June 15, 1976 College dormitories Recreational vehicle parks ¹Dwelling means a residential structure, whether or not attached to real property. § 1003.2(f) and comments 2(f)-1 through -5. Consumer Financial Protection Bureau back to page 1 page 3 of 6
3 Does the transaction involve an extension of credit?² Yes Proceed to Step 4 Is or was the transaction:
§ an assumption? comment 2(d)-2.i or completed pursuant to a New York State consolidation, extension, and modification agreement (CEMA)? comment 2(d)-2.ii Credit granted pursuant to a new debt obligation? No Yes No Does not involve a Covered Loan ² Generally under Regulation C, an extension of credit refers to the granting of credit only pursuant to a new debt obligation. If the transaction modifies, renews, extends, or amends the terms of an existing debt obligation, but the existing debt obligation is not satisfied and replaced, the transaction is not a new extension of credit, unless it falls within the two exceptions noted above. § 1003.2(d) and (o), and comments 2(d)-2 and 2(o)-2 Consumer Financial Protection Bureau back to page 1 page 4 of 6 §
4 Do other exclusions apply? § 1003.3(c)(1) through (8) and (c)(13) If NO to all of the questions If YES to any of the questions Transaction involves a Covered Loan Does not involve a Covered Loan Is or was the transaction:
originated or purchased by the Financial Institution acting in a fiduciary capacity? secured by a lien on unimproved land? temporary financing? the purchase of an interest in a pool of otherwise Covered Loans, such as mortgage-participation certificates, mortgage-backed securities, or real estate mortgage investment conduits? the purchase solely of the right to service an otherwise Covered Loan? a purchase as part of a merger or acquisition, or as part of the acquisition of all of the assets and liabilities of a branch office? for a total dollar amount that is less than $500? a purchase of a partial interest in an otherwise Covered Loan? to provide new funds in advance of a consolidation agreement completed pursuant to a New York State CEMA where consolidation occurred in the same year as final action on the transaction? Consumer Financial Protection Bureau back to page 1 page 5 of 6 § § § § § § § § §
Transaction involves a Covered Loan
Regulation C provides different loan-volume reporting thresholds for transactions that involve a Covered Loan depending on whether they involve a Closed-End Mortgage Loan or an Open-End Line of Credit. § 1003.3(c)(11) and (12). Reporting is required if a threshold is met in each of the two preceding calendar years.3 (See Institutional coverage chart effective January 1, 2022 for guidance regarding institutional coverage.) Closed-End Mortgage Loan § 1003.2(d) Open-End Line of Credit § 1003.2(o) Lending activity Lending activity Originated at least 100 Closed-End Mortgage Loans in each of the two preceding calendar years? § 1003.3(c)(11) Yes No Data reporting Originated at least 200 Open-End Lines of Credit in each of the two preceding calendar years? § 1003.3(c)(12) Data reporting Yes No Not required to report ClosedEnd Mortgage Loan Applications, originations, and purchases Required to report all Closed-End Mortgage Loan Applications, originations, and purchases Required to report all Open-End Lines of Credit Applications, originations, and purchases Not required to report Open-End Lines of Credit Applications, originations, and purchases § Only originated Covered Loans count toward the loan-volume thresholds. If a threshold is met, the institution reports all Applications for Covered Loans that it receives, Covered Loans that it originates, and Covered Loans that it purchases for that type of transaction (either Closed-End Mortgage Loan or Open-End Line of Credit, or both, if both thresholds are met). § Covered consumer and business or commercial purpose originations should be counted together when assessing the individual thresholds for Closed-End Mortgage Loans and Open-End Lines of Credit. § A financial institution may voluntarily report Closed-End Mortgage Loans or Open-End Lines of Credit that are excluded because the financial institution does not meet the transactional threshold for that type of transaction. However, if it chooses to voluntarily report Closed-End Mortgage Loans or Open-End Lines of Credit, the financial institution must report all such transactions that would otherwise be covered loans for that calendar year. 3 This chart is effective January 1, 2022. Prior to January 1, 2022, the open-end line of credit threshold is temporarily set at 500. The closed-end mortgage loan threshold is 25 prior to July 1, 2020. Consumer Financial Protection Bureau back to page 1 page 6 of 6
Appendix
Intro
A: Overview of Data
Requirements Chart
B: HMDA Small Entity
Compliance Guide
C: Instructions on
Collection of Data on
Ethnicity, Race, and Sex
D: Institutional Coverage
Chart
E: Transactional
Coverage Chart
F: Partial Exemptions
Charts
G: Data Fields and Data
Points Chart
H: Regulation C
I: Official Interpretations to Regulation C
J: Federal HMDA
Reporting Agencies
K: HMDA Poster
APPENDIX F: Partial Exemptions
The following are charts that illustrate the 26 data points covered by the partial exemptions and the 22 data points that are not covered by the partial exemptions. This copy was last updated on March 19, 2021. These Charts are not a substitute for Regulation C. Regulation C and its official interpretations (also known as the commentary) are the definitive sources of information regarding its requirements. Regulation C and its official interpretations are available in Appendix H and I of this Guide and at www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1003/.
Data Points Eligible Financial Institutions Need Not Collect or Report under the HMDA Rule For Transactions Covered by a Partial Exemption
Universal Loan Identifier (ULI) (1003.4(a)(1)(i))1
Application Channel (1003.4(a)(33))
Loan Term (1003.4(a)(25))
Reasons for Denial (1003.4(a)(16))2
Property Address (1003.4(a)(9)(i))
Manufactured Home Secured Property Type (1003.4(a)(29))
Manufactured Home Land Property Interest (1003.4(a)(30))
Property Value (1003.4(a)(28))
Multifamily Affordable Units (1003.4(a)(32))
Debt-to-Income Ratio (1003.4(a)(23))
Combined Loan-to-Value Ratio (1003.4(a)(24))
Credit Score (1003.4(a)(15))
Automated Underwriting System (1003.4(a)(35))
Interest Rate (1003.4(a)(21))
Introductory Rate Period (1003.4(a)(26))
Rate Spread (1003.4(a)(12))
Non-Amortizing Features (1003.4(a)(27))
Total Loan Costs or Total Points and Fees (1003.4(a)(17))
Origination Charges (1003.4(a)(18))
Discount Points (1003.4(a)(19))
Lender Credits (1003.4(a)(20))
Prepayment Penalty Term (1003.4(a)(22))
Reverse Mortgage Flag (1003.4(a)(36))
Open-End Line of Credit Flag (1003.4(a)(37))
Business or Commercial Purpose Flag (1003.4(a)(38))
Mortgage Loan Originator Identifier (1003.4(a)(34))
1 If the Financial Institution chooses not to report a ULI for a Covered Loan or Application covered by a partial exemption, it must report a non-universal loan identifier as discussed in Section 5.2 of the Small Entity Compliance Guide. 2 Financial institutions supervised by the Office of the Comptroller of the Currency are required to report reasons for denial on their HMDA loan/application registers (HMDA LARs), even if a partial exemption applies. 12 CFR 27.3(a)(1)(i), 128.6.
Ethnicity (1003.4(a)(10)(i))
Race (1003.4(a)(10)(i))
Sex (1003.4(a)(10)(i))
Age (1003.4(a)(10)(ii))
Income (1003.4(a)(10)(iii))
Legal Entity Identifier (LEI) (1003.5(a)(3))
Application Date (1003.4(a)(1)(ii)
Preapproval (1003.4(a)(4))
Loan Type (1003.4(a)(2))
Loan Purpose (1003.4(a)(3))
Loan Amount (1003.4(a)(7))
Action Taken (1003.4(a)(8)(i))
Action Taken Date (1003.4(a)(8)(ii))
State (1003.4(a)(9)(ii)(A))
County (1003.4(a)(9)(ii)(B))
Census Tract (1003.4(a)(9)(ii)(C))
Construction Method (1003.4(a)(5))
Occupancy Type (1003.4(a)(6)
Lien Status (1003.4(a)(14))
Number of Units (1003.4(a)(31))
HOEPA Status (1003.4(a)(13))
Type of Purchaser (1003.4(a)(11))
Data Points Eligible Financial Institutions Must Collect and Report under the HMDA Rule for Transactions Covered by a Partial Exemption
Appendix
Intro
A: Overview of Data
Requirements Chart
B: HMDA Small Entity
Compliance Guide
C: Instructions on
Collection of Data on
Ethnicity, Race, and Sex
D: Institutional Coverage
Chart
E: Transactional
Coverage Chart
F: Partial Exemptions
Charts
G: Data Fields and Data
Points Chart
H: Regulation C
I: Official Interpretations to Regulation C
J: Federal HMDA
Reporting Agencies
K: HMDA Poster
APPENDIX G: Data Fields and Data Points
The following is a chart that lists data points and corresponding data fields and data field numbers. It also indicates the data points that are covered by partial exemptions. This copy was last updated on March 19, 2021. This chart is not a substitute for Regulation C and the HMDA Filing Instructions Guide. Regulation C and its official interpretations (also known as the commentary) are the definitive sources of information regarding its requirements. Regulation C and its official interpretations are available in Appendix H and I of this Guide and at www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1003/. The Filing Instructions Guide and Supplemental Guide for Quarterly Filers are available at ffiec.cfpb.gov.
TABLE 1: FILING INSTITUTION, REPORTING PERIOD, AND CONTACT INFORMATION
(TRANSMITTAL SHEET)
Data Field Name Regulation C References
1 Record Identifier § 1003.5(a)(5)(a)
2 Financial Institution Name § 1003.5(a)(3)(i) 3 Calendar Year § 1003.5(a)(3)(ii) 4 Calendar Quarter § 1003.5(a)(3)(ii) 5 Contact Person’s Name § 1003.5(a)(3)(iii) 6 Contact Person’s Telephone Number § 1003.5(a)(3)(iii) 7 Contact Person’s E-mail Address § 1003.5(a)(3)(iii) Contact Person’s Office Street 8 Address § 1003.5(a)(3)(iii) 9 Contact Person’s Office City § 1003.5(a)(3)(iii) 10 Contact Person’s Office State § 1003.5(a)(3)(iii) 11 Contact Person’s Office ZIP Code § 1003.5(a)(3)(iii) 12 Federal Agency § 1003.5(a)(3)(iv) Total Number of Entries 13 Contained in Submission § 1003.5(a)(3)(v) 14 Federal Taxpayer Identification Number § 1003.5(a)(3)(vi) 15 Legal Entity Identifier (LEI) § 1003.5(a)(3)(vii) Data Field Number
1
TABLE 2: LOAN/APPLICATION REGISTER
Data Field Name Data Point Name
Record Identifier § 1003.5(a)(5)(a)
2
3
4 Application Date Application Date
Legal Entity Identifier (LEI)
Universal Loan Identifier (ULI) or Non-Universal Loan Identifier (NULI) Legal Entity Identifier (LEI) Universal Loan Identifier (ULI) or Non-Universal Loan Identifier (NULI) § 1003.4(a)(1)(i)(A) § 1003.4(a)(1)(i). Comments 4(a)(1)(i)-1 through -6, and
appendix C
§ 1003.4(a)(1)(ii),
Comments 4(a)(1)(ii)-1 through -3
No
Yes
No
5 Loan Type Loan Type
6 Loan Purpose Loan Purpose
§ 1003.4(a)(2),
Comment 4(a)(2)-1
§ 1003.4(a)(3),
Comments 4(a)(3)-1 through -6
No
No
7 Preapproval Preapproval
§ 1003.4(a)(4),
Comments 4(a)(4)-1 and -2 No
8 Construction Method Construction Method
§ 1003.4(a)(5),
Comments 4(a)(5)-1 through -3 No
9 Occupancy Type Occupancy Type
§ 1003.4(a)(6),
Comments 4(a)(6)-1 through -5 No
10 Loan Amount Loan Amount
§ 1003.4(a)(7),
Comments 4(a)(7)-1 through -9 No
11 Action Taken Action Taken
§ 1003.4(a)(8)(i),
Comments 4(a)(8)(i)-1 through -14 No
Data
Field
Number
Regulation C
References
Data Point
Covered by
Partial
Exemptions?
1
Data
Field
Number
Data Field Name Data Point Name Regulation C
References
Data Point
Covered by
Partial
Exemptions?
12 Action Taken Date Action Taken Date
§ 1003.4(a)(8)(ii),
Comments 4(a)(8)(ii)-1 through -6 No
13 Street Address Property Address
§ 1003.4(a)(9)(i),
Comments 4(a)(9)-1 through -5 and
4(a)(9)(i)-1 through -3
Yes
14 City Property Address
§ 1003.4(a)(9)(i),
Comments 4(a)(9)-1 through -5 and
4(a)(9)(i)-1 through -3
Yes
15 State Property Location &
Property Address
§ 1003.4(a)(9)(i)-(ii),
Comments 4(a)(9)-1 through -5 and
4(a)(9)(i)-1 through -3
No
16 ZIP Code Property Address
§ 1003.4(a)(9)(i),
Comments 4(a)(9)-1 through -5 and
4(a)(9)(i)-1 through -3
Yes
17 County Property Location
§ 1003.4(a)(9)(ii),
Comments 4(a)(9)-1 through -5 and
4(a)(9)(i)-1 through -3
No
18 Census Tract Property Location
§ 1003.4(a)(9)(ii),
Comments 4(a)(9)-1 through -5 and
4(a)(9)(i)-1 through -3
No
19 Ethnicity of Applicant or
Borrower: 1 Ethnicity
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
No
1 Reporting of the State data field is subject to the requirements of both Property Address, provided in 1003.4(a)(9)(i) and covered by the partial exemptions, and Property Location, provided in 1003.4(a)(9)(ii) and not covered by the partial exemptions.
Data
Field
Number
Data Field Name Data Point Name Regulation C
References
Data Point
Covered by
Partial
Exemptions?
20 Ethnicity of Applicant or
Borrower: 2 Ethnicity
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
No
21 Ethnicity of Applicant or
Borrower: 3 Ethnicity
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
No
22 Ethnicity of Applicant or
Borrower: 4 Ethnicity
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
No
23 Ethnicity of Applicant or
Borrower: 5 Ethnicity
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
No
24
Ethnicity of Applicant or
Borrower: Free Form Text
Field for Other Hispanic or
Latino
Ethnicity
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
No
25 Ethnicity of Co-Applicant or
Co-Borrower: 1 Ethnicity
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
No
26 Ethnicity of Co-Applicant or
Co-Borrower: 2 Ethnicity
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
No
27 Ethnicity of Co-Applicant or
Co-Borrower: 3 Ethnicity
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
No
28 Ethnicity of Co-Applicant or
Co-Borrower: 4 Ethnicity
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
No
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
Data
Field
Number
Data Field Name Data Point Name Regulation C
References
Data Point
Covered by
Partial
Exemptions?
29 Ethnicity of Co-Applicant or
Co-Borrower: 5 Ethnicity
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
No
33 Race of Applicant or
Borrower: 1 Race
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
Ethnicity of Co-Applicant or
Co-Borrower: Free Form Text
Field for Other Hispanic or
Latino
No 30 Ethnicity
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
Ethnicity of Applicant or
Borrower Collected on the
Basis of Visual Observation or Surname
No 31 Ethnicity
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
Ethnicity of Co-Applicant or
Co-Borrower Collected on the
Basis of Visual Observation or Surname
No 32 Ethnicity
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
No
34 Race of Applicant or
Borrower: 2 Race
No
35 Race of Applicant or
Borrower: 3 Race
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
No
36 Race of Applicant or
Borrower: 4 Race
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
No
37 Race of Applicant or
Borrower: 5 Race
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
No
Data
Field
Number
Data Field Name Data Point Name Regulation C
References
Data Point
Covered by
Partial
Exemptions?
38
39
Race of Applicant or
Borrower: Free Form Text
Field for American Indian or
Alaska Native Enrolled or
Principal Tribe
Race of Applicant or
Borrower: Free Form Text
Field for Other Asian
Race
Race
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
No
No
40
41
Race of Applicant or
Borrower: Free Form Text
Field for Other Pacific
Islander
Race of Co-Applicant or CoBorrower: 1
Race
Race
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
§ 1003.4(a)(10)(i),
Comments 4(a)(10)(i)-
1 and -2 and appendix
B
No
No
42 Race of Co-Applicant or CoBorrower: 2 Race § 1003.4(a)(10)(i), Comments 4(a)(10)(i)- 1 and -2 and appendix B No 43 Race of Co-Applicant or CoBorrower: 3 Race § 1003.4(a)(10)(i), Comments 4(a)(10)(i)- 1 and -2 and appendix B No 44 Race of Co-Applicant or CoBorrower: 4 Race § 1003.4(a)(10)(i), Comments 4(a)(10)(i)- 1 and -2 and appendix B No 45 Race of Co-Applicant or CoBorrower: 5 Race § 1003.4(a)(10)(i), Comments 4(a)(10)(i)- 1 and -2 and appendix B No 46 Race of Co-Applicant or CoBorrower: Free Form Text Field for American Indian or Alaska Native Enrolled or Principal Tribe Race § 1003.4(a)(10)(i), Comments 4(a)(10)(i)- 1 and -2 and appendix B No
Data
Field
Number
Data Field Name Data Point Name Regulation C
References
Data Point
Covered by
Partial
Exemptions?
47
Race of Co-Applicant or CoBorrower: Free Form Text Field for Other Asian Race § 1003.4(a)(10)(i), Comments 4(a)(10)(i)- 1 and -2 and appendix B No 48 51 Sex of Applicant or Borrower Sex No Race of Co-Applicant or CoBorrower: Free Form Text Field for Other Pacific Islander Race § 1003.4(a)(10)(i), Comments 4(a)(10)(i)- 1 and -2 and appendix B § 1003.4(a)(10)(i), Comments 4(a)(10)(i)- 1 and -2 and appendix B Race of Applicant or Borrower Collected on the Basis of Visual Observation or Surname 49 Race No § 1003.4(a)(10)(i), Comments 4(a)(10)(i)- 1 and -2 and appendix B Race of Co-Applicant or CoBorrower Collected on the Basis of Visual Observation or Surname 50 Race No § 1003.4(a)(10)(i), Comments 4(a)(10)(i)- 1 and -2 and appendix B No 52 Sex of Co-Applicant or CoBorrower Sex § 1003.4(a)(10)(i), Comments 4(a)(10)(i)- 1 and -2 and appendix B No 53 54 55 Age of Applicant or Borrower Age No Sex of Applicant or Borrower Collected on the Basis of Visual Observation or Surname Sex of Co-Applicant or CoBorrower Collected on the Basis of Visual Observation or Surname Sex Sex § 1003.4(a)(10)(i), Comments 4(a)(10)(i)- 1 and -2 and appendix B § 1003.4(a)(10)(i), Comments 4(a)(10)(i)- 1 and -2 and appendix B § 1003.4(a)(10)(ii), Comments 4(a)(10)(ii)- 1 through -5 No No
Data
Field
Number
Data Field Name Data Point Name Regulation C
References
Data Point
Covered by
Partial
Exemptions?
56 Age of Co-Applicant or CoBorrower Age
§ 1003.4(a)(10)(ii),
Comments 4(a)(10)(ii)-
1 through -5 No
57 Income Income
§ 1003.4(a)(10)(iii),
Comments
4(a)(10)(iii)-1 through -
10
No
58 Type of Purchaser Type of Purchaser
§ 1003.4(a)(11),
Comments 4(a)(11)-1 through -10 No
59 Rate Spread Rate Spread
§ 1003.4(a)(12),
Comments 4(a)(12)-1 through -9 Yes
60 HOEPA Status HOEPA Status
§ 1003.4(a)(13),
Comment 4(a)(13)-1 No
61 Lien Status Lien Status
§ 1003.4(a)(14),
Comments
4(a)(14)-1 and -2 No
62 Credit Score of Applicant or
Borrower Credit Score
§ 1003.4(a)(15),
Comments 4(a)(15)-1 through -7 Yes
63 Credit Score of Co-Applicant or Co-Borrower Credit Score § 1003.4(a)(15), Comments 4(a)(15)-1 through -7 Yes 64 Applicant or Borrower, Name and Version of Credit Scoring Model Credit Score § 1003.4(a)(15), Comments 4(a)(15)-1 through -7 Yes 65 Applicant or Borrower, Name and Version of Credit Scoring Model: Conditional Free Form Text Field for Code 8 Credit Score § 1003.4(a)(15), Comments 4(a)(15)-1 through -7 Yes 66 Co-Applicant or Co-Borrower, Name and Version of Credit Scoring Model Credit Score § 1003.4(a)(15), Comments 4(a)(15)-1 through -7 Yes
Data
Field
Number
Data Field Name Data Point Name Regulation C
References
Data Point
Covered by
Partial
Exemptions?
67
Co-Applicant or Co-Borrower,
Name and Version of Credit
Scoring Model: Conditional
Free Form Text Field for
Code 8
Credit Score
§ 1003.4(a)(15),
Comments 4(a)(15)-1 through -7 Yes
68 Reason for Denial: 1 Reason for Denial
§ 1003.4(a)(16),
Comments 4(a)(16)-1 through -4 Yes2
69 Reason for Denial: 2 Reason for Denial
§ 1003.4(a)(16),
Comments 4(a)(16)-1 through -4 Yes2
70 Reason for Denial: 3 Reason for Denial
§ 1003.4(a)(16),
Comments 4(a)(16)-1 through -4 Yes2
71 Reason for Denial: 4 Reason for Denial
§ 1003.4(a)(16),
Comments 4(a)(16)-1 through -4 Yes2
72
Reason for Denial:
Conditional Free Form Text
Field for Code 9
Reason for Denial
§ 1003.4(a)(16),
Comments 4(a)(16)-1 through -4 Yes2
73 Total Loan Costs Total Loan Costs or Total
Points and Fees
§ 1003.4(a)(17),
Comments 4(a)(17)(i)-
1 through -3 Yes
74 Total Points and Fees Total Loan Costs or Total Points and Fees § 1003.4(a)(17), Comments 4(a)(17)(ii)- 1 through -2 Yes 75 Origination Charges Origination Charges § 1003.4(a)(18), Comments 4(a)(18)-1 through -3 Yes 2Financial institutions supervised by the Office of the Comptroller of the Currency are required to report reasons for denial on their HMDA loan/application registers (HMDA LARs), even if a partial exemption applies. 12 CFR 27.3(a)(1)(i), 128.6.
Data
Field
Number
Data Field Name Data Point Name Regulation C
References
Data Point
Covered by
Partial
Exemptions?
76 Discount Points Discount Points
§ 1003.4(a)(19),
Comments 4(a)(19)-1 through -3 Yes
77 Lender Credits Lender Credits
§ 1003.4(a)(20),
Comments 4(a)(20)-1 through -3 Yes
78 Interest Rate Interest Rate
§ 1003.4(a)(21),
Comments 4(a)(21)-1 through -3 Yes
79 Prepayment Penalty Term Prepayment Penalty Term § 1003.4(a)(22), Comments 4(a)(22)-1 through -2 Yes 80 Debt-to-Income Ratio Debt-to-Income Ratio § 1003.4(a)(23), Comments 4(a)(23)-1 through -7 Yes 81 Combined Loan-to-Value Ratio Combined Loan-to-Value Ratio § 1003.4(a)(24), Comments 4(a)(24)-1 through -6 Yes 82 Loan Term Loan Term § 1003.4(a)(25), Comments 4(a)(25)-1 through -5 Yes 83 Introductory Rate Period Introductory Rate Period § 1003.4(a)(26), Comments 4(a)(26)-1 through -5 Yes 84 Balloon Payment Non-Amortizing Features § 1003.4(a)(27)(i), Comment 4(a)(27)-1 Yes 85 Interest-Only Payments Non-Amortizing Features § 1003.4(a)(27)(ii), Comment 4(a)(27)-1 Yes 86 Negative Amortization Non-Amortizing Features § 1003.4(a)(27)(iii), Comment 4(a)(27)-1 Yes 87 Other Non-amortizing Features Non-Amortizing Features § 1003.4(a)(27)(iv), Comment 4(a)(27)-1 Yes
Data
Field
Number
Data Field Name Data Point Name Regulation C
References
Data Point
Covered by
Partial
Exemptions?
88 Property Value Property Value
§ 1003.4(a)(28),
Comments 4(a)(28)-1 through -4 Yes
89 Manufactured Home Secured
Property Type
Manufactured Home
Secured Property Type
§ 1003.4(a)(29),
Comments 4(a)(29)-1 through -4 Yes
90 Manufactured Home Land
Property Interest
Manufactured Home Land
Property Interest
§ 1003.4(a)(30),
Comments 4(a)(30)-1 through -6 Yes
91 Total Units Total Units
§ 1003.4(a)(31),
Comments 4(a)(31)-1 through -4 No
92 Multifamily Affordable Units Multifamily Affordable Units § 1003.4(a)(32), Comments 4(a)(32)-1 through -6 Yes 93 Submission of Application Application Channel § 1003.4(a)(33)(i), Comments 4(a)(33)-1, 4(a)(33)(i)-1, Yes 94 Initially Payable to Your Institution Application Channel § 1003.4(a)(33)(ii), Comments 4(a)(33)(ii)- 1 through -2 Yes 95 Mortgage Loan Originator NMLSR Identifier Mortgage Loan Originator NMLSR Identifier § 1003.4(a)(34), Comments 4(a)(34)-1 through -4 Yes 96 Automated Underwriting System: 1 Automated Underwriting System § 1003.4(a)(35), Comments 4(a)(35)-1 through -7 Yes 97 Automated Underwriting System: 2 Automated Underwriting System § 1003.4(a)(35), Comments 4(a)(35)-1 through -7 Yes 98 Automated Underwriting System: 3 Automated Underwriting System § 1003.4(a)(35), Comments 4(a)(35)-1 through -7 Yes
Data
Field
Number
Data Field Name Data Point Name Regulation C
References
Data Point
Covered by
Partial
Exemptions?
99 Automated Underwriting
System: 4
Automated Underwriting
System
§ 1003.4(a)(35),
Comments 4(a)(35)-1 through -7 Yes
100 Automated Underwriting
System: 5
Automated Underwriting
System
§ 1003.4(a)(35),
Comments 4(a)(35)-1 through -7 Yes
101
Automated Underwriting
System: Conditional Free
Form Text Field for Code 5
Automated Underwriting
System
§ 1003.4(a)(35),
Comments 4(a)(35)-1 through -7 Yes
102 Automated Underwriting
System Result: 1
Automated Underwriting
System
§ 1003.4(a)(35),
Comments 4(a)(35)-1 through -7 Yes
103 Automated Underwriting
System Result: 2
Automated Underwriting
System
§ 1003.4(a)(35),
Comments 4(a)(35)-1 through -7 Yes
104 Automated Underwriting
System Result: 3
Automated Underwriting
System
§ 1003.4(a)(35),
Comments 4(a)(35)-1 through -7 Yes
105 Automated Underwriting
System Result: 4
Automated Underwriting
System
§ 1003.4(a)(35),
Comments 4(a)(35)-1 through -7 Yes
106 Automated Underwriting
System Result: 5
Automated Underwriting
System
§ 1003.4(a)(35),
Comments 4(a)(35)-1 through -7 Yes
107
Automated Underwriting
System Result: Conditional
Free Form Text Field for
Code 16
Automated Underwriting
System
§ 1003.4(a)(35),
Comments 4(a)(35)-1 through -7 Yes
108 Reverse Mortgage Reverse Mortgage § 1003.4(a)(36) Yes 109 Open-End Line of Credit Open-End Line of Credit § 1003.4(a)(37), Comment 4(a)(37)-1 Yes 110 Business or Commercial Purpose Business or Commercial Purpose § 1003.4(a)(38), Comment 4(a)(38)-1 Yes
i This chart is intended to be used as a reference tool for data required to be collected, recorded, and reported under Regulation C, as amended by the 2015 HMDA Rule, 2017 HMDA Rule, and the 2018 Act that was further clarified by the 2019 HMDA Rule. It includes the data field numbers and data field names that are provided in the HMDA Filing Instructions Guide. The HMDA Filing Instructions can be found at https://ffiec.cfpb.gov
Appendix
Intro
A: Overview of Data
Requirements Chart
B: HMDA Small Entity
Compliance Guide
C: Instructions on
Collection of Data on
Ethnicity, Race, and Sex
D: Institutional Coverage
Chart
E: Transactional
Coverage Chart
F: Partial Exemptions
Charts
G: Data Points and Data
Fields Chart
H: Regulation C
I: Official Interpretations to Regulation C
J: Federal HMDA
Reporting Agencies
K: HMDA Poster
APPENDIX H: Regulation C
The following is a copy of Regulation C. This copy is current as of January 1, 2022. This appendix is a compilation of material and not an official legal edition of the Code of Federal Regulations or the Federal Register. We have made every effort to ensure the material presented in this tool is accurate, but if you are relying on it for legal research you should consult the official editions of those sources to confirm your findings.
Regulation C
§ 1003.1 AUTHORITY, PURPOSE, AND SCOPE.
(a) Authority. This part, known as Regulation C, is issued by the Bureau of Consumer Financial Protection (Bureau) pursuant to the Home Mortgage Disclosure Act (HMDA) (12 U.S.C. 2801 et seq.,) as amended. The information-collection requirements have been approved by the U.S. Office of Management and Budget (OMB) under 44 U.S.C. 3501 et seq. and have been assigned OMB numbers for institutions reporting data to the Office of the Comptroller of the Currency (1557-0159), the Federal Deposit Insurance Corporation (3064-0046), the Federal Reserve System (7100-0247), the Department of Housing and Urban Development (HUD) (2502-0529), the National Credit Union Administration (3133-0166), and the Bureau of Consumer Financial Protection (3170-0008). (b) Purpose. (1) This part implements the Home Mortgage Disclosure Act, which is intended to provide the public with loan data that can be used:
(i) To help determine whether financial institutions are serving the housing needs of their communities; (ii) To assist public officials in distributing public-sector investment so as to attract private investment to areas where it is needed; and (iii) To assist in identifying possible discriminatory lending patterns and enforcing antidiscrimination statutes. (2) Neither the act nor this part is intended to encourage unsound lending practices or the allocation of credit. (c) Scope. This part applies to financial institutions as defined in §1003.2(g). This part requires a financial institution to submit data to the appropriate Federal agency for the financial institution as defined in §1003.5(a)(4), and to disclose certain data to the public, about covered loans for which the financial institution receives applications, or that it originates or purchases, and that are secured by a dwelling located in a State of the United States of America, the District of Columbia, or the Commonwealth of Puerto Rico. § 1003.2 DEFINITIONS In this part:
H-1
(a) Act means the Home Mortgage Disclosure Act (HMDA) (12 U.S.C. 2801 et seq.), as amended. (b) Application— (1) In general. Application means an oral or written request for a covered loan that is made in accordance with procedures used by a financial institution for the type of credit requested. (2) Preapproval programs. A request for preapproval for a home purchase loan, other than a home purchase loan that will be an open-end line of credit, a reverse mortgage, or secured by a multifamily dwelling, is an application under this section if the request is reviewed under a program in which the financial institution, after a comprehensive analysis of the creditworthiness of the applicant, issues a written commitment to the applicant valid for a designated period of time to extend a home purchase loan up to a specified amount. The written commitment may not be subject to conditions other than:
(i) Conditions that require the identification of a suitable property; (ii) Conditions that require that no material change has occurred in the applicant's financial condition or creditworthiness prior to closing; and (iii) Limited conditions that are not related to the financial condition or creditworthiness of the applicant that the financial institution ordinarily attaches to a traditional home mortgage application. (c) Branch office means:
(1) Any office of a bank, savings association, or credit union that is considered a branch by the Federal or State supervisory agency applicable to that institution, excluding automated teller machines and other free-standing electronic terminals; and (2) Any office of a for-profit mortgage-lending institution (other than a bank, savings association, or credit union) that takes applications from the public for covered loans. A for-profit mortgagelending institution (other than a bank, savings association, or credit union) is also deemed to have a branch office in an MSA or in an MD, if, in the preceding calendar year, it received applications for, originated, or purchased five or more covered loans related to property located in that MSA or MD, respectively. (d) Closed-end mortgage loan means an extension of credit that is secured by a lien on a dwelling and that is not an open-end line of credit under paragraph (o) of this section. (e) Covered loan means a closed-end mortgage loan or an open-end line of credit that is not an excluded transaction under §1003.3(c). H-2
(f) Dwelling means a residential structure, whether or not attached to real property. The term includes but is not limited to a detached home, an individual condominium or cooperative unit, a manufactured home or other factory-built home, or a multifamily residential structure or community. (g) Financial institution means a depository financial institution or a nondepository financial institution, where:
(1) Depository financial institution means a bank, savings association, or credit union that:
(i) On the preceding December 31 had assets in excess of the asset threshold established and published annually by the Bureau for coverage by the Act, based on the year-to-year change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers, not seasonally adjusted, for each twelve month period ending in November, with rounding to the nearest million; (ii) On the preceding December 31, had a home or branch office in an MSA; (iii) In the preceding calendar year, originated at least one home purchase loan or refinancing of a home purchase loan, secured by a first lien on a one- to four-unit dwelling; (iv) Meets one or more of the following two criteria:
(A) The institution is federally insured or regulated; or (B) Any loan referred to in paragraph (g)(1)(iii) of this section was insured, guaranteed, or supplemented by a Federal agency, or was intended by the institution for sale to the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation; and (v) Meets at least one of the following criteria:
(A) In each of the two preceding calendar years, originated at least 100 closed-end mortgage loans that are not excluded from this part pursuant to §1003.3(c)(1) through (10) or (13); or (B) In each of the two preceding calendar years, originated at least 200 open-end lines of credit that are not excluded from this part pursuant to §1003.3(c)(1) through (10); and (2) Nondepository financial institution means a for-profit mortgage-lending institution (other than a bank, savings association, or credit union) that:
(i) On the preceding December 31, had a home or branch office in an MSA; and (ii) Meets at least one of the following criteria:
H-3
(A) In each of the two preceding calendar years, originated at least 100 closed-end mortgage loans that are not excluded from this part pursuant to §1003.3(c)(1) through (10) or (13); or (B) In each of the two preceding calendar years, originated at least 200 open-end lines of credit that are not excluded from this part pursuant to §1003.3(c)(1) through (10). (h) [Reserved] (i) Home improvement loan means a closed-end mortgage loan or an open-end line of credit that is for the purpose, in whole or in part, of repairing, rehabilitating, remodeling, or improving a dwelling or the real property on which the dwelling is located. (j) Home purchase loan means a closed-end mortgage loan or an open-end line of credit that is for the purpose, in whole or in part, of purchasing a dwelling. (k) Loan/Application Register means both the record of information required to be collected pursuant to §1003.4 and the record submitted annually or quarterly, as applicable, pursuant to §1003.5(a). (l) Manufactured home means any residential structure as defined under regulations of the U.S. Department of Housing and Urban Development establishing manufactured home construction and safety standards (24 CFR 3280.2). For purposes of §1003.4(a)(5), the term also includes a multifamily dwelling that is a manufactured home community. (m) Metropolitan Statistical Area (MSA) and Metropolitan Division (MD). (1) Metropolitan Statistical Area or MSA means a Metropolitan Statistical Area as defined by the U.S. Office of Management and Budget. (2) Metropolitan Division (MD) means a Metropolitan Division of an MSA, as defined by the U.S. Office of Management and Budget. (n) Multifamily dwelling means a dwelling, regardless of construction method, that contains five or more individual dwelling units. (o) Open-end line of credit means an extension of credit that:
(1) Is secured by a lien on a dwelling; and
(2) Is an open-end credit plan as defined in Regulation Z, 12 CFR 1026.2(a)(20), but without regard to whether the credit is consumer credit, as defined in §1026.2(a)(12), is extended by a creditor, as defined in §1026.2(a)(17), or is extended to a consumer, as defined in §1026.2(a)(11). H-4
(p) Refinancing means a closed-end mortgage loan or an open-end line of credit in which a new, dwelling-secured debt obligation satisfies and replaces an existing, dwelling-secured debt obligation by the same borrower. (q) Reverse mortgage means a closed-end mortgage loan or an open-end line of credit that is a reverse mortgage transaction as defined in Regulation Z, 12 CFR 1026.33(a), but without regard to whether the security interest is created in a principal dwelling. H-5
§ 1003.3 EXEMPT INSTITUTIONS AND EXCLUDED AND PARTIALLY EXEMPT TRANSACTIONS. (a) Exemption based on state law. (1) A state-chartered or state-licensed financial institution is exempt from the requirements of this part if the Bureau determines that the institution is subject to a state disclosure law that contains requirements substantially similar to those imposed by this part and that contains adequate provisions for enforcement. (2) Any state, state-chartered or state-licensed financial institution, or association of such institutions, may apply to the Bureau for an exemption under paragraph (a) of this section. (3) An institution that is exempt under paragraph (a) of this section shall use the disclosure form required by its state law and shall submit the data required by that law to its state supervisory agency for purposes of aggregation. (b) Loss of exemption. An institution losing a state-law exemption under paragraph (a) of this
section shall comply with this part beginning with the calendar year following the year for which
it last reported loan data under the state disclosure law.
(c) Excluded transactions. The requirements of this part do not apply to:
(1) A closed-end mortgage loan or open-end line of credit originated or purchased by a financial institution acting in a fiduciary capacity; (2) A closed-end mortgage loan or open-end line of credit secured by a lien on unimproved land; (3) Temporary financing; (4) The purchase of an interest in a pool of closed-end mortgage loans or open-end lines of credit; (5) The purchase solely of the right to service closed-end mortgage loans or open-end lines of credit; (6) The purchase of closed-end mortgage loans or open-end lines of credit as part of a merger or acquisition, or as part of the acquisition of all of the assets and liabilities of a branch office as defined in §1003.2(c); (7) A closed-end mortgage loan or open-end line of credit, or an application for a closed-end mortgage loan or open-end line of credit, for which the total dollar amount is less than $500; (8) The purchase of a partial interest in a closed-end mortgage loan or open-end line of credit; H-6
(9) A closed-end mortgage loan or open-end line of credit used primarily for agricultural purposes; (10) A closed-end mortgage loan or open-end line of credit that is or will be made primarily for a business or commercial purpose, unless the closed-end mortgage loan or open-end line of credit is a home improvement loan under §1003.2(i), a home purchase loan under §1003.2(j), or a refinancing under §1003.2(p); (11) A closed-end mortgage loan, if the financial institution originated fewer than 100 closed-end mortgage loans in either of the two preceding calendar years; a financial institution may collect, record, report, and disclose information, as described in §§1003.4 and 1003.5, for such an excluded closed-end mortgage loan as though it were a covered loan, provided that the financial institution complies with such requirements for all applications for closed-end mortgage loans that it receives, closed-end mortgage loans that it originates, and closed-end mortgage loans that it purchases that otherwise would have been covered loans during the calendar year during which final action is taken on the excluded closed-end mortgage loan; (12) An open-end line of credit, if the financial institution originated fewer than 200 open-end lines of credit in either of the two preceding calendar years; a financial institution may collect, record, report, and disclose information, as described in §§1003.4 and 1003.5, for such an excluded open-end line of credit as though it were a covered loan, provided that the financial institution complies with such requirements for all applications for open-end lines of credit that it receives, open-end lines of credit that it originates, and open-end lines of credit that it purchases that otherwise would have been covered loans during the calendar year during which final action is taken on the excluded open-end line of credit; or (13) A transaction that provided or, in the case of an application, proposed to provide new funds to the applicant or borrower in advance of being consolidated in a New York State consolidation, extension, and modification agreement classified as a supplemental mortgage under New York Tax Law section 255; the transaction is excluded only if final action on the consolidation was taken in the same calendar year as final action on the new funds transaction. (d) Partially exempt transactions. (1) For purposes of this paragraph (d), the following definitions apply:
(i) Insured credit union means an insured credit union as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752). (ii) Insured depository institution means an insured depository institution as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813). (iii) Optional data means the data identified in § 1003.4(a)(1)(i), (a)(9)(i), and (a)(12), (15) through (30), and (32) through (38). (iv) Partially exempt transaction means a covered loan or application that is partially exempt under paragraph (d)(2) or (3) of this section. H-7
(2) Except as provided in paragraph (d)(6) of this section, an insured depository institution or insured credit union that, in each of the two preceding calendar years, originated fewer than 500 closed-end mortgage loans that are not excluded from this part pursuant to paragraphs (c)(1) through (10) or paragraph (c)(13) of this section is not required to collect, record, or report optional data as defined in paragraph (d)(1)(iii) of this section for applications for closed-end mortgage loans that it receives, closed-end mortgage loans that it originates, and closed-end mortgage loans that it purchases. (3) Except as provided in paragraph (d)(6) of this section, an insured depository institution or insured credit union that, in each of the two preceding calendar years, originated fewer than 500 open-end lines of credit that are not excluded from this part pursuant to paragraphs (c)(1) through (10) of this section is not required to collect, record, or report optional data as defined in paragraph (d)(1)(iii) of this section for applications for open-end lines of credit that it receives, open-end lines of credit that it originates, and open-end lines of credit that it purchases. (4) A financial institution eligible for a partial exemption under paragraph (d)(2) or (3) of this
section may collect, record, and report optional data as defined in paragraph (d)(1)(iii) of this
section for a partially exempt transaction as though the institution were required to do so,
provided that:
(i) If the institution reports the street address, city name, or Zip Code for the property securing a covered loan, or in the case of an application, proposed to secure a covered loan pursuant to § 1003.4(a)(9)(i), it reports all data that would be required by § 1003.4(a)(9)(i) if the transaction were not partially exempt; (ii) If the institution reports any data for the transaction pursuant to § 1003.4(a)(15), (16), (17), (27), (33), or (35), it reports all data that would be required by § 1003.4(a)(15), (16), (17), (27), (33), or (35), respectively, if the transaction were not partially exempt. (5) If, pursuant to paragraph (d)(2) or (3) of this section, a financial institution does not report a universal loan identifier (ULI) pursuant to § 1003.4(a)(1)(i) for an application for a covered loan that it receives, a covered loan that it originates, or a covered loan that it purchases, the financial institution shall assign and report a non-universal loan identifier (NULI). The NULI must be composed of up to 22 characters to identify the covered loan or application, which:
(i) May be letters, numerals, or a combination of letters and numerals; (ii) Must be unique within the annual loan/application register in which the covered loan or application is included; and (iii) Must not include any information that could be used to directly identify the applicant or borrower. (6) Paragraphs (d)(2) and (3) of this section do not apply to an insured depository institution that, as of the preceding December 31, had received a rating of “needs to improve record of meeting community credit needs” during each of its two most recent examinations or a rating of “substantial noncompliance in meeting community credit needs” on its most recent examination under section 807(b)(2) of the Community Reinvestment Act of 1977 (12 U.S.C. 2906(b)(2)). H-8
§ 1003.4 COMPILATION OF REPORTABLE DATA.
(a) Data format and itemization. A financial institution shall collect data regarding applications for covered loans that it receives, covered loans that it originates, and covered loans that it purchases for each calendar year. A financial institution shall collect data regarding requests under a preapproval program, as defined in §1003.2(b)(2), only if the preapproval request is denied, is approved by the financial institution but not accepted by the applicant, or results in the origination of a home purchase loan. Except as provided in § 1003.3(d), the data collected shall include the following items:
(1)
(i) A universal loan identifier (ULI) or, for a partially exempt transaction under § 1003.3(d), either a ULI or a non-universal loan identifier (NULI) as described in § 1003.3(d)(5) for the covered loan application that can be used to identify and retrieve the covered loan or application file. Except for a purchased covered loan or application described in paragraphs (a)(1)(i)(D) and (E) of this section or a partially exempt transaction for which a NULI is assigned and reported under § 1003.3(d), the financial institution shall assign and report a ULI that:
(A) Begins with the financial institution's Legal Entity Identifier (LEI) that is issued by:
(1) A utility endorsed by the LEI Regulatory Oversight Committee; or (2) A utility endorsed or otherwise governed by the Global LEI Foundation (GLEIF) (or any successor of the GLEIF) after the GLEIF assumes operational governance of the global LEI system. (B) Follows the LEI with up to 23 additional characters to identify the covered loan or application, which:
(1) May be letters, numerals, or a combination of letters and numerals; (2) Must be unique within the financial institution; and (3) Must not include any information that could be used to directly identify the applicant or borrower; and (C) Ends with a two-character check digit, as prescribed in appendix C to this part. (D) For a purchased covered loan that any financial institution has previously assigned or reported with a ULI under this part, the financial institution that purchases the covered loan must use the ULI that was assigned or previously reported for the covered loan. H-9
(E) For an application that was previously reported with a ULI under this part and that results in an origination during the same calendar year that is reported in a subsequent reporting period pursuant to §1003.5(a)(1)(ii), the financial institution may report the same ULI for the origination that was previously reported for the application. (ii) Except for purchased covered loans, the date the application was received or the date shown on the application form. (2) Whether the covered loan is, or in the case of an application would have been, insured by the Federal Housing Administration, guaranteed by the Department of Veterans Affairs, or guaranteed by the Rural Housing Service or the Farm Service Agency. (3) Whether the covered loan is, or the application is for, a home purchase loan, a home improvement loan, a refinancing, a cash-out refinancing, or for a purpose other than home purchase, home improvement, refinancing, or cash-out refinancing. (4) Whether the application or covered loan involved a request for a preapproval of a home purchase loan under a preapproval program. (5) Whether the construction method for the dwelling related to the property identified in paragraph (a)(9) of this section is site-built or a manufactured home. (6) Whether the property identified in paragraph (a)(9) of this section is or will be used by the applicant or borrower as a principal residence, as a second residence, or as an investment property. (7) The amount of the covered loan or the amount applied for, as applicable. (i) For a closed-end mortgage loan, other than a purchased loan, an assumption, or a reverse mortgage, the amount to be repaid as disclosed on the legal obligation. For a purchased closed-end mortgage loan or an assumption of a closed-end mortgage loan, the unpaid principal balance at the time of purchase or assumption. (ii) For an open-end line of credit, other than a reverse mortgage open-end line of credit, the amount of credit available to the borrower under the terms of the plan. (iii) For a reverse mortgage, the initial principal limit, as determined pursuant to section 255 of the National Housing Act (12 U.S.C. 1715z-20) and implementing regulations and mortgagee letters issued by the U.S. Department of Housing and Urban Development. (8) The following information about the financial institution's action:
(i) The action taken by the financial institution, recorded as one of the following:
(A) Whether a covered loan was originated or purchased; H-10
(B) Whether an application for a covered loan that did not result in the origination of a covered loan was approved but not accepted, denied, withdrawn by the applicant, or closed for incompleteness; and (C) Whether a preapproval request that did not result in the origination of a home purchase loan was denied or approved but not accepted. (ii) The date of the action taken by the financial institution. (9) The following information about the location of the property securing the covered loan or, in the case of an application, proposed to secure the covered loan:
(i) The property address; and
(ii) If the property is located in an MSA or MD in which the financial institution has a home or branch office, or if the institution is subject to paragraph (e) of this section, the location of the property by:
(A) State;
(B) County; and
(C) Census tract if the property is located in a county with a population of more than 30,000 according to the most recent decennial census conducted by the U.S. Census Bureau. (10) The following information about the applicant or borrower:
(i) Ethnicity, race, and sex, and whether this information was collected on the basis of visual observation or surname; (ii) Age; and (iii) Except for covered loans or applications for which the credit decision did not consider or would not have considered income, the gross annual income relied on in making the credit decision or, if a credit decision was not made, the gross annual income relied on in processing the application. (11) The type of entity purchasing a covered loan that the financial institution originates or purchases and then sells within the same calendar year. (12) (i) For covered loans and applications that are approved but not accepted, and that are subject to Regulation Z, 12 CFR part 1026, other than assumptions, purchased covered H-11
loans, and reverse mortgages, the difference between the covered loan's annual percentage rate and the average prime offer rate for a comparable transaction as of the date the interest rate is set. (ii) “Average prime offer rate” means an annual percentage rate that is derived from average interest rates and other loan pricing terms currently offered to consumers by a set of creditors for mortgage loans that have low-risk pricing characteristics. The Bureau publishes tables of average prime offer rates by transaction type at least weekly and also publishes the methodology it uses to derive these rates. (13) For covered loans subject to the Home Ownership and Equity Protection Act of 1994, as implemented in Regulation Z, 12 CFR 1026.32, whether the covered loan is a high-cost mortgage under Regulation Z, 12 CFR 1026.32(a). (14) The lien status (first or subordinate lien) of the property identified under paragraph (a)(9) of this section. (15) (i) Except for purchased covered loans, the credit score or scores relied on in making the credit decision and the name and version of the scoring model used to generate each credit score. (ii) For purposes of this paragraph (a)(15), “credit score” has the meaning set forth in 15 U.S.C. 1681g(f)(2)(A). (16) The principal reason or reasons the financial institution denied the application, if applicable. (17) For covered loans subject to Regulation Z, 12 CFR 1026.43(c), the following information:
(i) If a disclosure is provided for the covered loan pursuant to Regulation Z, 12 CFR 1026.19(f), the amount of total loan costs, as disclosed pursuant to Regulation Z, 12 CFR 1026.38(f)(4); or (ii) If the covered loan is not subject to the disclosure requirements in Regulation Z, 12 CFR 1026.19(f), and is not a purchased covered loan, the total points and fees charged in connection with the covered loan, expressed in dollars and calculated pursuant to Regulation Z, 12 CFR 1026.32(b)(1). (18) For covered loans subject to the disclosure requirements in Regulation Z, 12 CFR 1026.19(f), the total of all itemized amounts that are designated borrower-paid at or before closing, as disclosed pursuant to Regulation Z, 12 CFR 1026.38(f)(1). (19) For covered loans subject to the disclosure requirements in Regulation Z, 12 CFR 1026.19(f), the points paid to the creditor to reduce the interest rate, expressed in dollars, as H-12
described in Regulation Z, 12 CFR 1026.37(f)(1)(i), and disclosed pursuant to Regulation Z, 12 CFR 1026.38(f)(1). (20) For covered loans subject to the disclosure requirements in Regulation Z, 12 CFR 1026.19(f), the amount of lender credits, as disclosed pursuant to Regulation Z, 12 CFR 1026.38(h)(3). (21) The interest rate applicable to the approved application, or to the covered loan at closing or account opening. (22) For covered loans or applications subject to Regulation Z, 12 CFR part 1026, other than reverse mortgages or purchased covered loans, the term in months of any prepayment penalty, as defined in Regulation Z, 12 CFR 1026.32(b)(6)(i) or (ii), as applicable. (23) Except for purchased covered loans, the ratio of the applicant's or borrower's total monthly debt to the total monthly income relied on in making the credit decision. (24) Except for purchased covered loans, the ratio of the total amount of debt secured by the property to the value of the property relied on in making the credit decision. (25) The scheduled number of months after which the legal obligation will mature or terminate or would have matured or terminated. (26) The number of months, or proposed number of months in the case of an application, until the first date the interest rate may change after closing or account opening. (27) Whether the contractual terms include or would have included any of the following:
(i) A balloon payment as defined in Regulation Z, 12 CFR 1026.18(s)(5)(i); (ii) Interest-only payments as defined in Regulation Z, 12 CFR 1026.18(s)(7)(iv); (iii) A contractual term that would cause the covered loan to be a negative amortization loan as defined in Regulation Z, 12 CFR 1026.18(s)(7)(v); or (iv) Any other contractual term that would allow for payments other than fully amortizing payments, as defined in Regulation Z, 12 CFR 1026.43(b)(2), during the loan term, other than the contractual terms described in this paragraph (a)(27)(i), (ii), and (iii). (28) The value of the property securing the covered loan or, in the case of an application, proposed to secure the covered loan relied on in making the credit decision. (29) If the dwelling related to the property identified in paragraph (a)(9) of this section is a manufactured home and not a multifamily dwelling, whether the covered loan is, or in the case H-13
of an application would have been, secured by a manufactured home and land, or by a manufactured home and not land. (30) If the dwelling related to the property identified in paragraph (a)(9) of this section is a manufactured home and not a multifamily dwelling, whether the applicant or borrower:
(i) Owns the land on which it is or will be located or, in the case of an application, did or would have owned the land on which it would have been located, through a direct or indirect ownership interest; or (ii) Leases or, in the case of an application, leases or would have leased the land through a paid or unpaid leasehold. (31) 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. (32) If the property securing the covered loan or, in the case of an application, proposed to secure the covered loan includes a multifamily dwelling, the number of individual dwelling units related to the property that are income-restricted pursuant to Federal, State, or local affordable housing programs. (33) Except for purchased covered loans, the following information about the application channel of the covered loan or application:
(i) Whether the applicant or borrower submitted the application for the covered loan directly to the financial institution; and (ii) Whether the obligation arising from the covered loan was, or in the case of an application, would have been initially payable to the financial institution. (34) For a covered loan or application, the unique identifier assigned by the Nationwide Mortgage Licensing System and Registry for the mortgage loan originator, as defined in Regulation G, 12 CFR 1007.102, or Regulation H, 12 CFR 1008.23, as applicable. (35) (i) Except for purchased covered loans, the name of the automated underwriting system used by the financial institution to evaluate the application and the result generated by that automated underwriting system. (ii) For purposes of this paragraph (a)(35), an “automated underwriting system” means an electronic tool developed by a securitizer, Federal government insurer, or Federal government guarantor of closed-end mortgage loans or open-end lines of credit that provides a result regarding the credit risk of the applicant and whether the covered loan is eligible to be originated, purchased, insured, or guaranteed by that securitizer, Federal H-14
government insurer, or Federal government guarantor. A person is a securitizer, Federal government insurer, or Federal government guarantor of closed-end mortgage loans or open-end lines of credit, respectively, if it has ever securitized, provided Federal government insurance, or provided a Federal government guarantee for a closed-end mortgage loan or open-end line of credit. (36) Whether the covered loan is, or the application is for, a reverse mortgage. (37) Whether the covered loan is, or the application is for, an open-end line of credit. (38) Whether the covered loan is, or the application is for a covered loan that will be, made primarily for a business or commercial purpose. (b) Collection of data on ethnicity, race, sex, age, and income. (1) A financial institution shall collect data about the ethnicity, race, and sex of the applicant or borrower as prescribed in appendix B to this part. (2) Ethnicity, race, sex, age, and income data may but need not be collected for covered loans purchased by a financial institution. (c)-(d) [Reserved] (e) Data reporting for banks and savings associations that are required to report data on small business, small farm, and community development lending under CRA. Banks and savings associations that are required to report data on small business, small farm, and community development lending under regulations that implement the Community Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.) shall also collect the information required by paragraph 4(a)(9)(ii) of this section for property located outside MSAs and MDs in which the institution has a home or branch office, or outside any MSA. (f) Quarterly recording of data. A financial institution shall record the data collected pursuant to this section on a loan/application register within 30 calendar days after the end of the calendar quarter in which final action is taken (such as origination or purchase of a covered loan, sale of a covered loan in the same calendar year it is originated or purchased, or denial or withdrawal of an application). H-15
§ 1003.5 DISCLOSURE AND REPORTING.
(a) Reporting to agency.
(1)(i) Annual reporting. By March 1 following the calendar year for which data are collected and recorded as required by§ 1003.4, a financial institution shall submit its annual loan/application register in electronic format to the appropriate Federal agency at the address identified by such agency. An authorized representative of the financial institution with knowledge of the data submitted shall certify to the accuracy and completeness of data submitted pursuant to this paragraph (a)(1)(i). The financial institution shall retain a copy of its annual loan/ application register submitted pursuant to this paragraph (a)(1)(i) for its records for at least three years. (ii) [Reserved] (iii) When the last day for submission of data prescribed under this paragraph (a)(1) falls on a Saturday or Sunday, a submission shall be considered timely if it is submitted on the next succeeding Monday. (2) A financial institution that is a subsidiary of a bank or savings association shall complete a separate loan/application register. The subsidiary shall submit the loan/application register, directly or through its parent, to the appropriate Federal agency for the subsidiary’s parent at the address identified by the agency. (3) A financial institution shall provide with its submission:
(i) Its name;
(ii) The calendar year the data submission covers pursuant to paragraph (a)(1)(i) 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). (4) For purposes of paragraph (a) of this section, ‘‘appropriate Federal agency’’ means the appropriate agency for the financial institution as determined pursuant to section 304(h)(2) of the Home Mortgage Disclosure Act (12 U.S.C. 2803(h)(2)) or, with respect to a financial institution subject to the Bureau’s supervisory authority under section 1025(a) of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5515(a)), the Bureau. H-16
(5) Procedures for the submission of data pursuant to paragraph (a) of this section are available at www.consumerfinance.gov/hmda. (b) Disclosure statement. (1) The Federal Financial Institutions Examination Council (FFIEC) will make available a disclosure statement based on the data each financial institution submits for the preceding calendar year pursuant to paragraph (a)(1)(i) of this section. (2) No later than three business days after receiving notice from the FFIEC that a financial institution's disclosure statement is available, the financial institution shall make available to the public upon request at its home office, and each branch office physically located in each MSA and each MD, a written notice that clearly conveys that the institution's disclosure statement may be obtained on the Bureau's Web site at www.consumerfinance.gov/hmda. (c) Modified loan/application register. (1) A financial institution shall make available to the public upon request at its home office, and each branch office physically located in each MSA and each MD, a written notice that clearly conveys that the institution's loan/application register, as modified by the Bureau to protect applicant and borrower privacy, may be obtained on the Bureau's Web site at www.consumerfinance.gov/hmda. (2) A financial institution shall make available the notice required by paragraph (c)(1) of this
section following the calendar year for which the data are collected.
(d) Availability of written notices.
(1) A financial institution shall make the notice required by paragraph (c) of this section available to the public for a period of three years and the notice required by paragraph (b)(2) of this
section available to the public for a period of five years. An institution shall make these notices
available during the hours the office is normally open to the public for business. (2) A financial institution may make available to the public, at its discretion and in addition to the written notices required by paragraphs (b)(2) or (c)(1) of this section, as applicable, its disclosure statement or its loan/application register, as modified by the Bureau to protect applicant and borrower privacy. A financial institution may impose a reasonable fee for any cost incurred in providing or reproducing these data. (e) Posted notice of availability of data. A financial institution shall post a general notice about the availability of its HMDA data in the lobby of its home office and of each branch office physically located in each MSA and each MD. This notice must clearly convey that the institution's HMDA data is available on the Bureau's Web site at www.consumerfinance.gov/hmda. H-17
(f) Aggregated data. Using data submitted by financial institutions pursuant to paragraph (a)(1)(i) of this section, the FFIEC will make available aggregate data for each MSA and MD, showing lending patterns by property location, age of housing stock, and income level, sex, ethnicity, and race. § 1003.6 ENFORCEMENT. (a) Administrative enforcement. A violation of the Act or this part is subject to administrative sanctions as provided in section 305 of the Act (12 U.S.C. 2804), including the imposition of civil money penalties, where applicable. Compliance is enforced by the agencies listed in section 305 of the Act. (b) Bona fide errors. (1) An error in compiling or recording data for a covered loan or application is not a violation of the Act or this part if the error was unintentional and occurred despite the maintenance of procedures reasonably adapted to avoid such an error. (2) An incorrect entry for a census tract number is deemed a bona fide error, and is not a violation of the Act or this part, provided that the financial institution maintains procedures reasonably adapted to avoid such an error. (c) Quarterly recording and reporting. If a financial institution makes a good-faith effort to record all data required to be recorded pursuant to § 1003.4(f) fully and accurately within 30 calendar days after the end of each calendar quarter, and some data are nevertheless inaccurate or incomplete, the inaccuracy or omission is not a violation of the Act or this part provided that the institution corrects or completes the data prior to submitting its annual loan/application register pursuant to § 1003.5(a)(1)(i). H-18
APPENDIX A TOPART 1003
—[Reserved]
APPENDIX B TO PART 1003—FORM AND INSTRUCTIONS FOR DATA COLLECTION ON ETHNICITY,
RACE, AND SEX
You may list questions regarding the ethnicity, race, and sex of the applicant on your loan application form, or on a separate form that refers to the application. (See the sample data collection form below for model language.)
trust, you must report that the requirement to report the applicant's ethnicity, race, and sex is not applicable if the trust is the applicant. On the other hand, if the applicant is a natural person, and is the beneficiary of a trust, you must report the applicant's ethnicity, race, and sex.
8. You must report the ethnicity, race, and sex of an applicant as provided by the applicant.
For example, if an applicant selects the “Asian” box the institution reports “Asian” for the race of the applicant. Only an applicant may self-identify as being of a particular Hispanic or Latino subcategory (Mexican, Puerto Rican, Cuban, Other Hispanic or Latino) or of a particular Asian subcategory (Asian Indian, Chinese, Filipino, Japanese, Korean, Vietnamese, Other Asian) or of a particular Native Hawaiian or Other Pacific Islander subcategory (Native Hawaiian, Guamanian or Chamorro, Samoan, Other Pacific Islander) or of a particular American Indian or Alaska Native enrolled or principal tribe. An applicant may select an ethnicity or race subcategory even if the applicant does not select an aggregate ethnicity or aggregate race category. For example, if an applicant selects only the “Mexican” box, the institution reports “Mexican” for the ethnicity of the applicant but does not also report “Hispanic or Latino.”
9. You must offer the applicant the option of selecting more than one ethnicity or race. If an
applicant selects more than one ethnicity or race, you must report each selected designation, subject to the limits described below.
i. Ethnicity—Aggregate categories and subcategories. There are two aggregate ethnicity
categories: Hispanic or Latino; and Not Hispanic or Latino. The Hispanic or Latino category has four subcategories: Mexican; Puerto Rican; Cuban; and Other Hispanic or Latino. You must report every aggregate ethnicity category selected by the applicant. If the applicant also selects one or more ethnicity subcategories, you must report each ethnicity subcategory selected by the applicant, except that you must not report more than a total of five aggregate ethnicity categories and ethnicity subcategories combined. For example, if the applicant selects both aggregate ethnicity categories and also selects all four ethnicity subcategories, you must report Hispanic or Latino, Not Hispanic or Latino, and any three, at your option, of the four ethnicity subcategories selected by the applicant. To determine how to report the Other Hispanic or Latino ethnicity subcategory for purposes of the fiveethnicity maximum, see paragraph 9.ii below.
ii. Ethnicity—Other subcategories. An applicant may select the Other Hispanic or Latino
ethnicity subcategory, an applicant may provide a particular Hispanic or Latino ethnicity not listed in the standard subcategories, or an applicant may do both. If the applicant provides only a particular Hispanic or Latino ethnicity in the space provided, you are permitted, but are not required, to report Other Hispanic or Latino in addition to reporting the particular Hispanic or Latino ethnicity provided by the applicant. For example, if an applicant provides only “Dominican,” you should report “Dominican.” You are permitted, but not required, to report Other Hispanic or Latino as well. If an applicant selects the Other Hispanic or Latino ethnicity subcategory and also provides a particular Hispanic or H-20
Latino ethnicity not listed in the standard subcategories, you must report both the selection of Other Hispanic or Latino and the additional information provided by the applicant, subject to the five-ethnicity maximum. For purposes of the maximum of five reportable ethnicity categories and ethnicity subcategories combined, as set forth in paragraph 9.i, the Other Hispanic or Latino subcategory and additional information provided by the applicant together constitute only one selection. For example, if the applicant selects Other Hispanic or Latino and enters “Dominican” in the space provided, Other Hispanic or Latino and “Dominican” are considered one selection. Similarly, if the applicant only enters “Dominican” in the space provided and you report both “Dominican” and Other Hispanic or Latino as permitted by this paragraph 9.ii, the reported items together are considered one selection.
iii. Race—Aggregate categories and subcategories. There are five aggregate race
categories: American Indian or Alaska Native; Asian; Black or African American; Native Hawaiian or Other Pacific Islander; and White. The Asian and the Native Hawaiian or Other Pacific Islander aggregate categories have seven and four subcategories, respectively. The Asian race subcategories are: Asian Indian; Chinese; Filipino; Japanese; Korean; Vietnamese; and Other Asian. The Native Hawaiian or Other Pacific Islander race subcategories are: Native Hawaiian; Guamanian or Chamorro; Samoan; and Other Pacific Islander. You must report every aggregate race category selected by the applicant. If the applicant also selects one or more race subcategories, you must report each race subcategory selected by the applicant, except that you must not report more than a total of five aggregate race categories and race subcategories combined. For example, if the applicant selects all five aggregate race categories and also selects some race subcategories, you report only the five aggregate race categories. On the other hand, if the applicant selects the White, Asian, and Native Hawaiian or Other Pacific Islander aggregate race categories, and the applicant also selects the Korean, Vietnamese, and Samoan race subcategories, you must report White, Asian, Native Hawaiian or Other Pacific Islander, and any two, at your option, of the three race subcategories selected by the applicant. In this example, you must report White, Asian, and Native Hawaiian or Other Pacific Islander, and in addition you must report (at your option) either Korean and Vietnamese, Korean and Samoan, or Vietnamese and Samoan. To determine how to report an Other race subcategory and the American Indian or Alaska Native category for purposes of the five-race maximum, see paragraphs 9.iv and 9.v below.
iv. Race—Other subcategories. An applicant may select the Other Asian race subcategory
or the Other Pacific Islander race subcategory, an applicant may provide a particular Asian race or Pacific Islander race not listed in the standard subcategories, or an applicant may do both. If the applicant provides only a particular Asian race or Pacific Islander race in the space provided, you are permitted, but are not required, to report Other Asian or Other Pacific Islander, as applicable, in addition to reporting the particular Asian race or Pacific Islander race provided by the applicant. For example, if an applicant provides only “Hmong,” you should report “Hmong.” You are permitted, but not required, to report Other H-21
Asian as well. If an applicant selects the Other Asian race or the Other Pacific Islander race subcategory and provides a particular Asian race or Pacific Islander race not listed in the standard subcategories, you must report both the selection of Other Asian or Other Pacific Islander, as applicable, and the additional information provided by the applicant, subject to the five-race maximum. For purposes of the maximum of five reportable race categories and race subcategories combined, as set forth in paragraph 9.iii, the Other race subcategory and additional information provided by the applicant together constitute only one selection. Thus, using the same facts in the example offered in paragraph 9.iii above, if the applicant also selects Other Asian and enters “Thai” in the space provided, Other Asian and Thai are considered one selection. Similarly, if the applicant enters only “Thai” in the space provided and you report both “Thai” and Other Asian as permitted by this paragraph 9.iv, the reported items together are considered one selection. In the same example, you must report any two (at your option) of the four race subcategories selected by the applicant, Korean, Vietnamese, Other Asian-Thai, and Samoan, in addition to the three aggregate race categories selected by the applicant.
v. Race—American Indian or Alaska Native category. An applicant may select the
American Indian or Alaska Native race category, an applicant may provide a particular American Indian or Alaska Native enrolled or principal tribe, or an applicant may do both. If the applicant provides only a particular American Indian or Alaska Native enrolled or principal tribe in the space provided, you are permitted, but are not required, to report American Indian or Alaska Native in addition to reporting the particular American Indian or Alaska Native enrolled or principal tribe provided by the applicant. For example, if an applicant provides only “Navajo,” you should report “Navajo.” You are permitted, but not required, to report American Indian or Alaska Native as well. If an applicant selects the American Indian or Alaska Native race category and also provides a particular American Indian or Alaska Native enrolled or principal tribe, you must report both the selection of American Indian or Alaska Native and the additional information provided by the applicant. For purposes of the maximum of five reportable race categories and race subcategories combined, as set forth in paragraph 9.iii, the American Indian or Alaska Native category and additional information provided by the applicant together constitute only one selection.
10. If the applicant chooses not to provide the information for an application taken in person,
note this fact on the collection form and then collect the applicant's ethnicity, race, and sex on the basis of visual observation or surname. You must report whether the applicant's ethnicity, race, and sex was collected on the basis of visual observation or surname. When you collect an applicant's ethnicity, race, and sex on the basis of visual observation or surname, you must select from the following aggregate categories: Ethnicity (Hispanic or Latino; not Hispanic or Latino); race (American Indian or Alaska Native; Asian; Black or African American; Native Hawaiian or Other Pacific Islander; White); sex (male; female).
11. If the applicant declines to answer these questions by checking the “I do not wish to
provide this information” box on an application that is taken by mail or on the internet, or H-22
declines to provide this information by stating orally that he or she does not wish to provide this information on an application that is taken by telephone, you must report “information not provided by applicant in mail, internet, or telephone application.”
12. If the applicant begins an application by mail, internet, or telephone, and does not
provide the requested information on the application but does not check or select the “I do not wish to provide this information” box on the application, and the applicant meets in person with you to complete the application, you must request the applicant's ethnicity, race, and sex. If the applicant does not provide the requested information during the in-person meeting, you must collect the information on the basis of visual observation or surname. If the meeting occurs after the application process is complete, for example, at closing or account opening, you are not required to obtain the applicant's ethnicity, race, and sex.
13. When an applicant provides the requested information for some but not all fields, you
report the information that was provided by the applicant, whether partial or complete. If an applicant provides partial or complete information on ethnicity, race, and sex and also checks the “I do not wish to provide this information” box on an application that is taken by mail or on the internet, or makes that selection when applying by telephone, you must report the information on ethnicity, race, and sex that was provided by the applicant. H-23
H-24
APPENDIX C TO PART 1003—PROCEDURES FOR GENERATING A CHECK DIGIT AND VALIDATING A
ULI
The check digit for the Universal Loan Identifier (ULI) pursuant to §1003.4(a)(1)(i)(C) is calculated using the ISO/IEC 7064, MOD 97-10 as it appears on the International Standard ISO/IEC 7064:2003, which is published by the International Organization for Standardization (ISO). ©ISO. This material is reproduced from ISO/IEC 7064:2003 with permission of the American National Standards Institute (ANSI) on behalf of ISO. All rights reserved. Generating a Check Digit Step 1: Starting with the leftmost character in the string that consists of the combination of the Legal Entity Identifier (LEI) pursuant to §1003.4(a)(1)(i)(A) and the additional characters identifying the covered loan or application pursuant to §1003.4(a)(1)(i)(B), replace each alphabetic character with numbers in accordance with Table I below to obtain all numeric values in the string.
Table I—Alphabetic to Numeric Conversion Table
The alphabetic characters are not case-sensitive and each letter, whether it is capitalized or in lower-case, is equal to the same value as each letter illustrates in the conversion table. For example, A and a are each equal to 10. A = 10 B = 11 C = 12 D = 13 E = 14 F = 15 G = 16 H = 17 H-25
I = 18
J = 19
K = 20
L = 21
M = 22
N = 23
O = 24
P = 25
Q = 26
R = 27
S = 28
T = 29
U = 30
V = 31
W = 32
X = 33
Y = 34
Z = 35
H
-26
Step 2: After converting the combined string of characters to all numeric values, append two zeros to the rightmost positions. Step 3: Apply the mathematical function mod = (n,97) where n = the number obtained in step 2 above and 97 is the divisor. Alternatively, to calculate without using the modulus operator, divide the numbers in step 2 above by 97. Truncate the remainder to three digits and multiply it by 97. Round the result to the nearest whole number. Step 4: Subtract the result in step 3 from 98. If the result is one digit, add a leading 0 to make it two digits. Step 5: The two digits in the result from step 4 is the check digit. Append the resulting check digit to the rightmost position in the combined string of characters described in step 1 above to generate the ULI. Example For example, assume the LEI for a financial institution is 10Bx939c5543TqA1144M and the financial institution assigned the following string of characters to identify the covered loan:
999143X. The combined string of characters is 10Bx939c5543TqA1144M999143X. Step 1: Starting with the leftmost character in the combined string of characters, replace each alphabetic character with numbers in accordance with Table I above to obtain all numeric values in the string. The result is 10113393912554329261011442299914333. Step 2: Append two zeros to the rightmost positions in the combined string. The result is 1011339391255432926101144229991433300. H-27
Step 3: Apply the mathematical function mod = (n,97) where n = the number obtained in step 2 above and 97 is the divisor. The result is 60. Alternatively, to calculate without using the modulus operator, divide the numbers in step 2 above by 97. The result is 1042617929129312294946332267952920.618556701030928. Truncate the remainder to three digits, which is .618, and multiply it by 97. The result is 59.946. Round this result to the nearest whole number, which is 60. Step 4: Subtract the result in step 3 from 98. The result is 38. Step 5: The two digits in the result from step 4 is the check digit. Append the check digit to the rightmost positions in the combined string of characters that consists of the LEI and the string of characters assigned by the financial institution to identify the covered loan to obtain the ULI. In this example, the ULI would be 10Bx939c5543TqA1144M999143X38. Validating A ULI To determine whether the ULI contains a transcription error using the check digit calculation, the procedures are described below. Step 1: Starting with the leftmost character in the ULI, replace each alphabetic character with numbers in accordance with Table I above to obtain all numeric values in the string. Step 2: Apply the mathematical function mod=(n,97) where n=the number obtained in step 1 above and 97 is the divisor. Step 3: If the result is 1, the ULI does not contain transcription errors. Example For example, the ULI assigned to a covered loan is 10Bx939c5543TqA1144M999143X38. Step 1: Starting with the leftmost character in the ULI, replace each alphabetic character with numbers in accordance with Table I above to obtain all numeric values in the string. The result is 1011339391255432926101144229991433338. Step 2: Apply the mathematical function mod=(n,97) where n is the number obtained in step 1 above and 97 is the divisor. Step 3: The result is 1. The ULI does not contain transcription errors. H-28
Appendix
Intro
A: Overview of Data
Requirements Chart
B: HMDA Small Entity
Compliance Guide
C: Instructions on
Collection of Data on
Ethnicity, Race, and Sex
D: Institutional Coverage
Chart
E: Transactional
Coverage Chart
F: Partial Exemptions
Charts
G: Data Fields and Data
Points Chart
H: Regulation C
I: Official Interpretations to Regulation C
J: Federal HMDA
Reporting Agencies
K: HMDA Poster
APPENDIX I: Official Interpretations to Regulation C
The following is a copy of the commentary to Regulation C. This copy is current as January 1, 2022. This appendix is a compilation of material and not an official legal edition of the Code of Federal Regulations or the Federal Register. We have made every effort to ensure the material presented in this tool is accurate, but if you are relying on it for legal research you should consult the official editions of those sources to confirm your findings.
Supplement I to Part 1003—Official Interpretations INTRODUCTION
1. Status. The commentary in this supplement is the vehicle by which the Bureau of Consumer
Financial Protection issues formal interpretations of Regulation C (12 CFR part 1003).
SECTION 1003.2—DEFINITIONS
2(B) APPLICATION
1. Consistency with Regulation B. Bureau interpretations that appear in the official commentary
to Regulation B (Equal Credit Opportunity Act, 12 CFR part 1002, Supplement I) are generally applicable to the definition of application under Regulation C. However, under Regulation C the definition of an application does not include prequalification requests.
2. Prequalification. A prequalification request is a request by a prospective loan applicant (other
than a request for preapproval) for a preliminary determination on whether the prospective loan applicant would likely qualify for credit under an institution's standards, or for a determination on the amount of credit for which the prospective applicant would likely qualify. Some institutions evaluate prequalification requests through a procedure that is separate from the institution's normal loan application process; others use the same process. In either case, Regulation C does not require an institution to report prequalification requests on the loan/application register, even though these requests may constitute applications under Regulation B for purposes of adverse action notices.
3. Requests for preapproval. To be a preapproval program as defined in § 1003.2(b)(2), the
written commitment issued under the program must result from a comprehensive review of the creditworthiness of the applicant, including such verification of income, resources, and other matters as is typically done by the institution as part of its normal credit evaluation program. In addition to conditions involving the identification of a suitable property and verification that no material change has occurred in the applicant's financial condition or creditworthiness, the written commitment may be subject only to other conditions (unrelated to the financial condition or creditworthiness of the applicant) that the lender ordinarily attaches to a traditional home mortgage application approval. These conditions are limited to conditions such as requiring an acceptable title insurance binder or a certificate indicating clear termite inspection, and, in the case where the applicant plans to use the proceeds from the sale of the applicant's present home to purchase a new home, a settlement statement showing adequate proceeds from the sale of the present home. Regardless of its name, a program that satisfies the definition of a preapproval program in § 1003.2(b)(2) is a preapproval program for purposes of Regulation C. Conversely, a program that a financial institution describes as a “preapproval program” that I-1
does not satisfy the requirements of § 1003.2(b)(2) is not a preapproval program for purposes of Regulation C. If a financial institution does not regularly use the procedures specified in § 1003.2(b)(2), but instead considers requests for preapprovals on an ad hoc basis, the financial institution need not treat ad hoc requests as part of a preapproval program for purposes of Regulation C. A financial institution should, however, be generally consistent in following uniform procedures for considering such ad hoc requests. 2(C) BRANCH OFFICE Paragraph 2(c)(1)
1. Credit unions. For purposes of Regulation C, a “branch” of a credit union is any office where
member accounts are established or loans are made, whether or not the office has been approved as a branch by a Federal or State agency. (See 12 U.S.C. 1752.)
2. Bank, savings association, or credit unions. A branch office of a bank, savings association, or
credit union does not include a loan-production office if the loan-production office is not considered a branch by the Federal or State supervisory authority applicable to that institution. A branch office also does not include the office of an affiliate or of a third party, such as a thirdparty broker. Paragraph 2(c)(2)
1. General. A branch office of a for-profit mortgage lending institution, other than a bank savings
association or credit union, does not include the office of an affiliate or of a third party, such as a third-party broker. 2(D) CLOSED-END MORTGAGE LOAN
1. Dwelling-secured. Section 1003.2(d) defines a closed-end mortgage loan as an extension of
credit that is secured by a lien on a dwelling and that is not an open-end line of credit under §1003.2(o). Thus, for example, a loan to purchase a dwelling and secured only by a personal guarantee is not a closed-end mortgage loan because it is not dwelling-secured.
2. Extension of credit. Under § 1003.2(d), a dwelling-secured loan is not a closed-end mortgage
loan unless it involves an extension of credit. For example, some transactions completed pursuant to installment sales contracts, such as some land contracts, depending on the facts and circumstances, may or may not involve extensions of credit rendering the transactions closed-end mortgage loans. In general, extension of credit under § 1003.2(d) refers to the granting of credit only pursuant to a new debt obligation. Thus, except as described in comments 2(d)-2.i and .ii, if a transaction modifies, renews, extends, or amends the terms of an existing debt obligation, but the existing debt obligation is not satisfied and replaced, the transaction is not a closed-end mortgage loan under § 1003.2(d) because there has been no I-2
new extension of credit. The phrase extension of credit thus is defined differently under Regulation C than under Regulation B, 12 CFR part 1002.
i. Assumptions. For purposes of Regulation C, an assumption is a transaction in which an
institution enters into a written agreement accepting a new borrower in place of an existing borrower as the obligor on an existing debt obligation. For purposes of Regulation C, assumptions include successor-in-interest transactions, in which an individual succeeds the prior owner as the property owner and then assumes the existing debt secured by the property. Under § 1003.2(d), assumptions are extensions of credit even if the new borrower merely assumes the existing debt obligation and no new debt obligation is created. See also comment 2(j)-5.
ii. New York State consolidation, extension, and modification agreements. A transaction
completed pursuant to a New York State consolidation, extension, and modification agreement and classified as a supplemental mortgage under New York Tax Law section 255, such that the borrower owes reduced or no mortgage recording taxes, is an extension of credit under § 1003.2(d). Comments 2(i)-1, 2(j)-5, and 2(p)-2 clarify whether such transactions are home improvement loans, home purchase loans, or refinancings, respectively. Section 1003.3(c)(13) provides an exclusion from the reporting requirement for a preliminary transaction providing or, in the case of an application, proposing to provide new funds to the borrower in advance of being consolidated within the same calendar year into a supplemental mortgage under New York Tax Law section 255. See comment 3(c)(13)- 1 concerning how to report a supplemental mortgage under New York Tax Law section 255 in this situation. 2(F) DWELLING
whether they are used as residences. Houseboats, floating homes, and mobile homes constructed before June 15, 1976, are also excluded, regardless of whether they are used as residences. Also excluded are transitory residences such as hotels, hospitals, college dormitories, and recreational vehicle parks, and structures originally designed as dwellings but used exclusively for commercial purposes, such as homes converted to daycare facilities or professional offices.
4. Mixed-use properties. A property used for both residential and commercial purposes, such as
a building containing apartment units and retail space, is a dwelling if the property's primary use is residential. An institution may use any reasonable standard to determine the primary use of the property, such as by square footage or by the income generated. An institution may select the standard to apply on a case-by-case basis.
5. Properties with service and medical components. For purposes of § 1003.2(f), a property
used for both long-term housing and to provide related services, such as assisted living for senior citizens or supportive housing for persons with disabilities, is a dwelling and does not have a non-residential purpose merely because the property is used for both housing and to provide services. However, transitory residences that are used to provide such services are not dwellings. See comment 2(f)-3. Properties that are used to provide medical care, such as skilled nursing, rehabilitation, or long-term medical care, also are not dwellings. See comment 2(f)-3. If a property that is used for both long-term housing and to provide related services also is used to provide medical care, the property is a dwelling if its primary use is residential. An institution may use any reasonable standard to determine the property's primary use, such as by square footage, income generated, or number of beds or units allocated for each use. An institution may select the standard to apply on a case-by-case basis. 2(G) FINANCIAL INSTITUTION
1. Preceding calendar year and preceding December 31. The definition of financial institution
refers both to the preceding calendar year and the preceding December 31. These terms refer to the calendar year and the December 31 preceding the current calendar year. For example, in 2021, the preceding calendar year is 2020 and the preceding December 31 is December 31,
2020. Accordingly, in 2021, Financial Institution A satisfies the asset-size threshold described in
§ 1003.2(g)(1)(i) if its assets exceeded the threshold specified in comment 2(g)-2 on December 31, 2020. Likewise, in 2021, Financial Institution A does not meet the loan-volume test described in § 1003.2(g)(1)(v)(A) if it originated fewer than 100 closed-end mortgage loans during either 2019 or 2020.
2. Adjustment of exemption threshold for banks, savings associations, and credit unions. For
data collection in 2022, the asset-size exemption threshold is $50 million. Banks, savings associations, and credit unions with assets at or below $50 million as of December 31, 2021, are exempt from collecting data for 2022. I-4
3. Merger or acquisition—coverage of surviving or newly formed institution. After a merger or
acquisition, the surviving or newly formed institution is a financial institution under § 1003.2(g) if it, considering the combined assets, location, and lending activity of the surviving or newly formed institution and the merged or acquired institutions or acquired branches, satisfies the criteria included in § 1003.2(g). For example, A and B merge. The surviving or newly formed institution meets the loan threshold described in § 1003.2(g)(1)(v)(B) if the surviving or newly formed institution, A, and B originated a combined total of at least 200 open-end lines of credit in each of the two preceding calendar years. Likewise, the surviving or newly formed institution meets the asset-size threshold in § 1003.2(g)(1)(i) if its assets and the combined assets of A and B on December 31 of the preceding calendar year exceeded the threshold described in § 1003.2(g)(1)(i). Comment 2(g)-4 discusses a financial institution's responsibilities during the calendar year of a merger.
4. Merger or acquisition—coverage for calendar year of merger or acquisition. The scenarios
described below illustrate a financial institution's responsibilities for the calendar year of a merger or acquisition. For purposes of these illustrations, a “covered institution” means a financial institution, as defined in § 1003.2(g), that is not exempt from reporting under § 1003.3(a), and “an institution that is not covered” means either an institution that is not a financial institution, as defined in § 1003.2(g), or an institution that is exempt from reporting under § 1003.3(a).
i. Two institutions that are not covered merge. The surviving or newly formed institution
meets all of the requirements necessary to be a covered institution. No data collection is required for the calendar year of the merger (even though the merger creates an institution that meets all of the requirements necessary to be a covered institution). When a branch office of an institution that is not covered is acquired by another institution that is not covered, and the acquisition results in a covered institution, no data collection is required for the calendar year of the acquisition.
ii. A covered institution and an institution that is not covered merge. The covered institution
is the surviving institution, or a new covered institution is formed. For the calendar year of the merger, data collection is required for covered loans and applications handled in the offices of the merged institution that was previously covered and is optional for covered loans and applications handled in offices of the merged institution that was previously not covered. When a covered institution acquires a branch office of an institution that is not covered, data collection is optional for covered loans and applications handled by the acquired branch office for the calendar year of the acquisition.
iii. A covered institution and an institution that is not covered merge. The institution that is
not covered is the surviving institution, or a new institution that is not covered is formed. For the calendar year of the merger, data collection is required for covered loans and applications handled in offices of the previously covered institution that took place prior to the merger. After the merger date, data collection is optional for covered loans and I-5
applications handled in the offices of the institution that was previously covered. When an institution remains not covered after acquiring a branch office of a covered institution, data collection is required for transactions of the acquired branch office that take place prior to the acquisition. Data collection by the acquired branch office is optional for transactions taking place in the remainder of the calendar year after the acquisition.
iv. Two covered institutions merge. The surviving or newly formed institution is a covered
institution. Data collection is required for the entire calendar year of the merger. The surviving or newly formed institution files either a consolidated submission or separate submissions for that calendar year. When a covered institution acquires a branch office of a covered institution, data collection is required for the entire calendar year of the merger. Data for the acquired branch office may be submitted by either institution.
5. Originations. Whether an institution is a financial institution depends in part on whether the
institution originated at least 100 closed-end mortgage loans in each of the two preceding calendar years or at least 200 open-end lines of credit in each of the two preceding calendar years. Comments 4(a)-2 through -4 discuss whether activities with respect to a particular closed-end mortgage loan or open-end line of credit constitute an origination for purposes of § 1003.2(g).
6. Branches of foreign banks—treated as banks. A Federal branch or a State-licensed or
insured branch of a foreign bank that meets the definition of a “bank” under section 3(a)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1813(a)) is a bank for the purposes of § 1003.2(g).
7. Branches and offices of foreign banks and other entities—treated as nondepository financial
institutions. A Federal agency, State-licensed agency, State-licensed uninsured branch of a foreign bank, commercial lending company owned or controlled by a foreign bank, or entity operating under section 25 or 25A of the Federal Reserve Act, 12 U.S.C. 601 and 611 (Edge Act and agreement corporations) may not meet the definition of “bank” under the Federal Deposit Insurance Act and may thereby fail to satisfy the definition of a depository financial institution under § 1003.2(g)(1). An entity is nonetheless a financial institution if it meets the definition of nondepository financial institution under § 1003.2(g)(2). 2(I) HOME IMPROVEMENT LOAN
kitchen and in part to pay college tuition is a home improvement loan under § 1003.2(i). Similarly, for example, a loan that is completed pursuant to a New York State consolidation, extension, and modification agreement and that is classified as a supplemental mortgage under New York Tax Law section 255, such that the borrower owes reduced or no mortgage recording taxes, is a home improvement loan if any of the loan's funds are for home improvement purposes. See also comment 2(d)-2.ii.
2. Improvements to real property. Home improvements include improvements both to a dwelling
and to the real property on which the dwelling is located (for example, installation of a swimming pool, construction of a garage, or landscaping).
3. Commercial and other loans. A home improvement loan may include a closed-end mortgage
loan or an open-end line of credit originated outside an institution's residential mortgage lending division, such as a loan or line of credit to improve an apartment building originated in the commercial loan department.
4. Mixed-use property. A closed-end mortgage loan or an open-end line of credit to improve a
multifamily dwelling used for residential and commercial purposes (for example, a building containing apartment units and retail space), or the real property on which such a dwelling is located, is a home improvement loan if the loan's proceeds are used either to improve the entire property (for example, to replace the heating system), or if the proceeds are used primarily to improve the residential portion of the property. An institution may use any reasonable standard to determine the primary use of the loan proceeds. An institution may select the standard to apply on a case-by-case basis. See comment 3(c)(10)-3.ii for guidance on loans to improve primarily the commercial portion of a dwelling other than a multifamily dwelling.
5. Multiple-purpose loans. A closed-end mortgage loan or an open-end line of credit may be
used for multiple purposes. For example, a closed-end mortgage loan that is a home improvement loan under § 1003.2(i) may also be a refinancing under § 1003.2(p) if the transaction is a cash-out refinancing and the funds will be used to improve a home. Such a transaction is a multiple-purpose loan. Comment 4(a)(3)-3 provides details about how to report multiple-purpose covered loans.
6. Statement of borrower. In determining whether a closed-end mortgage loan or an open-end
line of credit, or an application for a closed-end mortgage loan or an open-end line of credit, is for home improvement purposes, an institution may rely on the applicant's or borrower's stated purpose(s) for the loan or line of credit at the time the application is received or the credit decision is made. An institution need not confirm that the borrower actually uses any of the funds for the stated purpose(s). 2(J) HOME PURCHASE LOAN I-7
Assumptions. Under § 1003.2(j), an assumption is a home purchase loan when an institution enters into a written agreement accepting a new borrower as the obligor on an existing obligation to finance the new borrower's purchase of the dwelling securing the existing obligation, if the resulting obligation is a closed-end mortgage loan or an open-end line of credit. A transaction in which borrower B finances the purchase of borrower A's dwelling by assuming borrower A's existing debt obligation and that is completed pursuant to a New York State consolidation, extension, and modification agreement and is classified as a supplemental mortgage under New York Tax Law section 255, such that the borrower owes reduced or no mortgage recording taxes, is an assumption and a home purchase loan. See comment 2(d)-2.ii.
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RegAlert holds no document that amends or replaces this one. This is not a check that it is in force: confirm with the regulator.
“This edition of the Guide incorporates amendments made to HMDA by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) 3”
“Cross References: CA 21-17 “Revised Home Mortgage Disclosure Act Examination Procedures” (December 17, 2021)”
“Cross References: CA 18-9 “Designated Home Mortgage Disclosure Act Key Data Fields” (December 7, 2018)”
“Cross References: CA 17-4 “Expectations for Supervised Institutions Regarding Amended Regulation C” (December 21, 2017)”
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