A GUIDE TO HMDA Reporting - ffiec

EDITION EFFECTIVE JANUARY 1, 2013 (For HMDA Submissions due March 1, 2014)

A GUIDE TO

HMDA Reporting

Getting It Right!

Federal Financial Institutions Examination Council

LOAN/APPLICATION REGISTER Page of

Name of Reporting Institution

City, State, ZIP

All columns (except Reasons for Denial) must be completed for each entry. See the instru

Application or Loan Information

Application or Loan Number

Example of Loan Originated Following Preapproval

L B- 6 87 4 3 9 Example of Preapproval Request Denied 5 6 7 8 9 0 4 3 2 1 1 23 4 09 8 7 6 5 Example of Application Denied 5 6 7 8 9 0 4 3 2 11 2 3 4 0 9 8 7 6 5

Date Application Received (mm/dd/ccyy)

01/15/2012

06/01/2012

03/20/2012

A GUIDE TO

HMDA Reporting

Getting It Right!

Edition effective January 1, 2013 (for HMDA submissions due

March 1, 2014 or later)

This edition of the Guide is the comprehensive edition for use with 2013 calendar year data (due March 1, 2014). Appendices include the Consumer Financial Protection Bureau's Regulation C (Home Mortgage Disclosure); the Instructions for Completion of the HMDA Loan/Application Register (LAR); the commentary to Regulation C; the Home Mortgage Disclosure Act; state and county codes, together with metropolitan statistical area (MSA) and metropolitan division (MD) numbers; contact information for the federal supervisory agencies; and the HMDA poster.

April 2013

Contents

Foreword

iv

Introduction

Purposes of HMDA

1

Data Collection, Reporting, and Disclosure in a Nutshell

1

Management's Responsibilities

2

Who Must Report

Coverage Criteria

3

Definition of a "Branch Office"

5

Mergers and Acquisitions

5

Exemptions Based on State Law

6

Brokered or Correspondent Loans: Who Reports?

6

Data Reporting in General

The Loan/Application Register (LAR)

7

Transactions to be Reported

8

Information to be Reported about Each Transaction

8

Transactions Not to be Reported

9

Completing the LAR Step by Step

Caveat

10

Application or Loan Information

10

Action Taken

12

Property Location

13

Applicant Information

15

Sale of the Loan

16

Reasons for Denial

16

Loan Price and Lien Status

16

Sources of Geographic Information (Geocoding Tools)

18

Census Tract Street Address Lookup Resources

18

Census Tract Map Resources

18

ii

Submitting the LAR

Review and Contact Information

21

Checklist for Person Completing the LAR

22

Checklist for the Reviewing Officer

23

Editing the Data

24

Transmitting the Data

24

Resubmitting the Data

24

Disclosing the Data

Disclosure of a Modified LAR

26

Disclosure Statements Prepared by the FFIEC

26

Aggregate Tables Prepared by the FFIEC

26

Glossary

27

Appendices

A-- Form and Instructions for Completion of HMDA Loan/Application

Register

A-1

B-- Form and Instructions for Data Collection on Ethnicity, Race, and Sex

B-1

C-- Regulation C

C-1

D-- Commentary to Regulation C

D-1

E-- The Home Mortgage Disclosure Act

E-1

F-- State and County Codes and MSA/MD Numbers

F-1

G--Federal HMDA Reporting Agencies

G-1

H-- HMDA Poster

H-1

iii

Foreword

iv

A Guide to HMDA Reporting: Getting It Right! will assist you in complying with the Home Mortgage Disclosure Act as implemented by The Consumer Finan cial Protection Bureau's Regulation C, 12 C.F.R. part 1003 (Regulation C). The Guide was written to address the needs of finan cial institution managers and employees responsible for HMDA compliance.

The Guide was developed by the member agencies of the Federal Financial Institu tions Examination Council (FFIEC)--the Consumer Financial Protection Bureau (CFPB), the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve Sys tem (Board), and the National Credit Union Administration (NCUA)--and the Depart ment of Housing and Urban Development (HUD).

This edition of the Guide reflects several changes resulting from the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). The Dodd-Frank Act transferred rulemaking authority under HMDA from the Board to the CFPB. In addition, the Dodd-Frank Act granted the CFPB supervisory and enforcement authority for entities under its jurisdiction. The Act also abolished the Office of Thrift Supervision. In December 2011, the CFPB restated the Board's implementing regulation, Regulation C, to 12 C.F.R. 1003 (76 Fed. Reg. 78465 (December 19, 2011)). The Guide has been updated to reflect these changes.

The Introduction reviews HMDA's pur poses and data collection, reporting, and disclosure requirements. It also summa rizes management's responsibilities. The remaining parts of the Guide describe in more detail:

what information a covered institution must collect,

how the information should be reported on the HMDA loan/application register, and

how the data will be disclosed to the public by the institution and the FFIEC.

The FFIEC produces a public disclosure statement for every covered institution and for every metropolitan statistical area (MSA) and metropolitan division (MD). The disclosures and other HMDA data are available from the FFIEC, by accessing the FFIEC Internet site, hmda, or by sending an e-mail to HMDAHELP@.

This Guide is a general statement of the requirements of HMDA and Regulation C, not a verbatim restatement of the law. To comply fully with HMDA, you must be familiar with

Regulation C (reproduced in Appendix C to this Guide), including its Appendices A and B (reproduced in Appendices A and B to this Guide),

the Commentary to Regulation C (reproduced in Appendix D to this Guide), and

informal guidance the CFPB may issue from time to time on the web site of the FFIEC.

The Guide merely supplements, and does

not substitute for, those sources. For fur ther information about compliance, con tact your federal HMDA Reporting agency

(see Appendix G to this Guide).

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.

Or send e-mail to HMDAHELP@.

Introduction

Purposes of HMDA

The Home Mortgage Disclosure Act of 1975, as amended, requires many depository and nondepository lenders to collect and publicly disclose information about housing-related loans and applications for such loans, including several applicant/borrower characteristics. HMDA is implemented by the Consumer Financial Protection Bureau's Regulation C (12 C.F.R. Part 1003), which includes commentary (12 C.F.R. Part 1003 Supp. I).

The housing-loan data that lenders must disclose under HMDA:

show whether financial institutions are serving the housing needs of their communities;

assist public officials in distributing public-sector investment so as to attract private investment to areas where it is needed; and

assist in identifying possible discrimina tory leanding patterns and enforcing antidiscrimination statutes.

HMDA does not prohibit any lending activity, nor is it intended to encourage unsound lending practices or the alloca tion of credit.

Data Collection, Reporting, and Disclosure in a Nutshell

As implemented by the Bureau's Regula tion C, HMDA requires covered depository and nondepository institutions to collect and publicly disclose information about applications for, originations of, and pur chases of home purchase loans, home improvement loans, and refinancings. Whether an institution is covered depends generally on its asset size, its location, and whether it is in the business of residential mortgage lending. The regulation's cover age criteria are illustrated in diagrams in the next chapter.

Who Must Report. There are three categories of loans that must be reported: home purchase, home improvement, and refinancing. Each has a specific definition, which may vary from your institution's use of the term. You will find the definitions in the chapter Data Reporting in General. There you will also find a list of types of transactions that are not reportable under HMDA.

Every loan application, origination, and purchase that falls into one or more of the three categories must be reported. With some exceptions, for each transaction the lender reports data about:

the loan, such as its type and amount;

the property, such as its location and type;

the disposition of the application, such as whether it was denied or resulted in an origination; and

the applicant (namely, ethnicity, race, sex, and income).

That information must be recorded on a form known as the HMDA loan/appli cation register (variously known as the HMDA-LAR, the LAR, or the register). A summary of the instructions for com pleting the LAR appears in the chapter Completing the LAR Step by Step.

Additional information essential to reporting property location appears in the chapter Sources of Geographic Information (Geocoding Tools).

1

Introduction

An institution must transmit its LAR to the data processor (FFIEC), ordinarily in electronic form, and preferably by using the Submission via Web option or Inter net e-mail with an encrypted file (HRID_ Agency_Year.ENC) attachment. Instruc tions concerning transmittal can be found in Submitting the LAR. Every reporting institution must also disclose its LAR to the public after deleting information that might compromise consumer privacy. See Dis closing the Data.

The FFIEC, on behalf of the agencies, cre ates a series of tables from each institu tion's data. Every institution must make its tables available to the public. In addition, the FFIEC will prepare and release tables that aggregate all reporting institutions' data by metropolitan statistical area or metropolitan division. Those disclosures are discussed in more detail in Disclosing the Data.

Management's Responsibilities

If your institution is required to comply with HMDA, management must ensure that:

Procedures are in place for collecting and maintaining accurate data regarding each loan application, loan origination, and loan purchase-- for home purchase loans, homeimprovement loans, and refinancings.

The individuals assigned responsibility for preparing and maintaining the data understand the regulatory requirements and are given the resources and tools needed to produce complete and accurate data.

Appropriate record entries are made on the LAR within thirty calendar days after the end of the calendar quarter in which final action occurs (such as origination or purchase of a loan, or denial or withdrawal of an application). For loans sold, the type of purchaser may be added later.

An officer of the institution monitors the collection of the loan/application data during the course of the year for compliance with the reporting instruc tions and reviews the accuracy of the data submitted to FFIEC, as the insti tution's data processor, at year-end.

The loan/application data are submit ted annually on time (by March 1 fol lowing the calendar year of the data), and the institution responds promptly to any questions that may arise during processing of the data submitted.

Administrative sanctions. Given the importance of accurate and timely sub mission of HMDA data, a violation of the reporting requirements may subject the reporting institution to administrative sanctions, including the imposition of civil money penalties, where applicable.

2

Who Must Report

Coverage Criteria

Whether a depository institution or nondepository institution1 is covered depends on its size, the extent of its business in an MSA, and whether it is in the business of

residential mortgage lending. The precise coverage criteria, set out in the definition of "financial institution" in ? 1003.2 of Regulation C, are illustrated by the follow ing diagrams.

Coverage Criteria for Depository Institutions

Is the institution a bank, credit union, or savings association?

NO

See next page

YES

On the preceding December 31,

NO

did the total assets of the institution

exceed the coverage threshold?2

It is exempt

YES

On the preceding December 31, did

NO

the institution have a home or branch

office in an MSA?3

It is exempt

YES

In the preceding calendar year, did

1 Unless context suggest

the institution originate at least one

otherwise, the Guide uses the term "depository institutions" to apply to banks and savings

home purchase loan (excluding tem porary financing such as a construc

NO

associations (as those terms are defined in the Federal Deposit Insurance Act) and credit unions that make feder

tion loan) or refinancing of a home purchase loan secured by a first lien on a one- to-four-family dwelling?

ally related mortgage loans,

and the term "nondepository institutions" to apply to other

YES

mortgage lending institutions.

These common usages differ

Is the institution federally insured or

from section 303 of HMDA, which generally defines all of

regulated; was the mortgage loan

these institutions as "deposi

insured, guaranteed, or supple

NO

tory institutions."

mented by a federal agency; or was

2 Every December, the Con sumer Financial Protection Bureau will announce the

the loan intended for sale to Fannie Mae or Freddie Mac?

threshold for the following year

in the Federal Register. The asset threshold may change

YES

from year to year based on

changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers.

3 See the next subchapter for the definition of a "branch

HMDA Applies to Loan Originations, Purchases, and Applications in the Current Calendar Year

office."

It is exempt It is exempt

3

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