2018 HMDA Compliance Fair Lending and CRA Implicationsmbba-nh.org/wp-content/uploads/2018/04/HMDA-Fair... · Latest HMDA News • December 21, 2017, CFPB Public Statement on Home

WEALTH ADVISORY | OUTSOURCING | AUDIT, TAX, AND CONSULTING

Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor. | ©2017 CliftonLarsonAllen LLP

2018 HMDA ComplianceFair Lending and CRA Implications

Presented by Marissa Blundell, JD, Principal

CLA Bankers Advisory

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Disclaimers!

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting, or tax advice or opinion provided by CLA Bankers Advisory, a CliftonLarsonAllen LLP Division or CliftonLarsonAllen LLP, to the user. CLA Bankers Advisory, a CliftonLarsonAllen LLP Division is not a law firm and does not provide legal advice. While every effort has been made to ensure the material presented in this presentation is accurate, no warranty is made as to the validity of the content. The user also is cautioned that this material may not be applicable to, or suitable for, the user’s specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. CliftonLarsonAllenLLP assumes no obligation to inform the user of any changes in tax laws or other factors that could affect the information contained herein.

2

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Latest HMDA News

• December 21, 2017, CFPB Public Statement on Home Mortgage Disclosure Act Compliance (similar statements issued by the FDIC, and NCUA)

– “ … for HMDA data collected in 2018 and reported in 2019 the Bureau does not intend to require data resubmission unless data errors are material. Furthermore, the Bureau does not intend to assess penalties with respect to errors in data collected in 2018 and reported in 2019.”

• January 1, 2018, OCC announcement following suit

• March 14, 2018 U.S. Senate passes Economic Growth, Regulatory Relief and Consumer Protection Act (“Regulatory Relief Bill”)

• Regulatory Relief HMDA Provisions

3

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Latest HMDA News

• Relief from certain Home Mortgage Disclosure Act requirements for insureddepositories, if fewer than 500 closed-end mortgage loans in each of 2 preceding calendar years, except for institutions with recent Community Reinvestment Act exam ratings of ‘needs to improve’ or ‘substantial noncompliance’

• the requirements of paragraphs (5) and (6) of subsection 2803 (b) shall not apply

• (5) the number and dollar amount of mortgage loans grouped according to measurements of– A) the total points and fees payable at origination in connection with the mortgage as determined by the Bureau,

taking into account 15 U.S.C. 1602(aa)(4);

– (B) the difference between the annual percentage rate associated with the loan and a benchmark rate or rates for all loans;

– (C) the term in months of any prepayment penalty or other fee or charge payable on repayment of some portion of principal or the entire principal in advance of scheduled payments; and

– (D) such other information as the Bureau may require; and

4

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Latest HMDA News

• (6) the number and dollar amount of mortgage loans and completed applications grouped according to measurements of

– (A) the value of the real property pledged or proposed to be pledged as collateral;

– (B) the actual or proposed term in months of any introductory period after which the rate of interest may change;

– (C) the presence of contractual terms or proposed contractual terms that would allow the mortgagor or applicant to make payments other than fully amortizing payments during any portion of the loan term;

– (D) the actual or proposed term in months of the mortgage loan;

– (E) the channel through which application was made, including retail, broker, and other relevant categories;

– (F) as the Bureau may determine to be appropriate, a unique identifier that identifies the loan originator as set forth in section 5102 of this title;

– (G) as the Bureau may determine to be appropriate, a universal loan identifier;

– (H) as the Bureau may determine to be appropriate, the parcel number that corresponds to the real property pledged or proposed to be pledged as collateral;

– (I) the credit score of mortgage applicants and mortgagors, in such form as the Bureau may prescribe; and

– (J) such other information as the Bureau may require.

5

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Interagency HMDA Compliance Examinations

• Updated FFIEC HMDA Examiner Transaction Testing Guidelines

– All agencies will utilize the HMDA Examiner Transaction Testing Guidelines (uniform standard)

– No longer resubmission requirements based on error rates

– If individual data fields have error rates above the field error resubmission threshold, resubmission will be required.

– Allowable tolerances for certain data fields

– Special field error resubmission threshold (10%) for institutions with 100 or fewer applications and originations

6

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


HMDA Changes Summarized in 2 Slides – Slide 1

• 2018 Institutional Coverage:

– Originated at least 25 closed end mortgage loans; or 500 covered open-end lines of credit in 2017 and 2016

– Exemption threshold increased to $45 million; therefore if bank, savings assoc., or credit union had assets of less than $45 million on December 31, 2017, exempt from collecting data in 2018

• Transaction Coverage:

– Consumer- purpose, closed-end loans and open-end lines of credit secured by a dwelling

– 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

– NOT otherwise excluded

7

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


HMDA Changes Summarized in 2 Slides – Slide 2

• Additional Data Points to Collect and Report:

– Additional borrower and loan information such as: age, credit score, a unique loan identifier, property value, application channel, automated underwriting information, points and fees, lender credits and others!

• Modified Data Points:

– Additional options for data points such as: Loan purpose

– Now Loan purpose includes “Cash-Out Refinancing” and “Other” in addition to Home Purchase Loan, Home Improvement Loan and Refinancing

– And for Borrower Race/Ethnicity “disaggregated” data options with subcategories

• LAR filing with CFPB using new system, and 2020 quarterly submission requirements for very large producers

8

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Interagency HMDA Compliance Examinations

9

“Key” Data Fields

Universal Loan ID Census Tract Discount Points Total Units

Application Date Ethnicity* Lender Credits AUS Result(s)

Loan Type Race* Interest Rate Reverse Mortgage

Loan Purpose Sex* Debt-to-IncomeRatio

Open-end Line of Credit

Occupancy Type Income Combined Loan To Value

Business orCommercial PurposeLoan Amount Lien Status Loan Term

Action Take Credit Score(s) Property Value

Action Taken Date Origination Charges

ManufacturedHome Secured Prop type

*Many additional details regarding multiple persons

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Fair Lending Claims and Use of HMDA Data

• HMDA LAR data as indicator of potential disparate treatment

– similarly situated borrowers in terms of geography and income with different outcomes (approve/denied) or loan terms (HOEPA)

– redlining (comparison of peer data)

◊ Lender inactivity in underserved areas where competitors are active supports inference of redlining

◊ Potential redlining indicators: Number of applications received, withdrawn, approved but not accepted & closed for incompleteness or loans originated in areas with more minority group residents compared with areas of fewer minority group residents

• Data Integrity check of HMDA LAR fields for accuracy as based on transaction documents/information preceded examination; and internal HMDA-plus data used to explain

10

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Fair Lending Examinations and Use of HMDA Data

11

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Fair Lending Examinations and Use of HMDA Data

• Institutions would add additional data to provide evidence that applicants/borrowers receiving different outcomes were not similarly situated

12

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Fair Lending Compliance Use of Enhanced HMDA Data

• Brighter spotlight on disparities across prohibited bases groups, areas of the country, and against peer results

• Newly required GMI data (race, ethnicity, and & sex) and age data

• Denial reasons are now mandatory and new “other” option

• Actual property addresses in the age of tech such as google maps

• Data integrity check against file documents will be more intensive

13

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Fair Lending Examinations Use of HMDA Data

• HMDA Compliance Exams in 2019 (evaluating the data collected and reported in 2018) will not require resubmission unless data errors are “material”

• When Fair Lending Examinations begin with the HMDA LAR analysis and errors are identified which impact the ability of the examiner to complete the Fair Lending Exam, is this material?

• Regardless of materiality, Fair Lending examination or CRA examination process may require revised data

• Key take away – go about your compliance implementation process as rigorously as you would have done without the announcement!

14

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


CRA Changing Definitions Based on HMDA Changes

• November 24, 2017, the OCC, FRB, and FDIC amended the existing definitions of “home mortgage loan” and “consumer loan”, related cross references, and the public file content requirements to conform to HMDA revisions

• Home Improvement Loans not secured by a dwelling

– no longer reportable transactions under HMDA

– For the purposes of CRA , may be considered at the option of the financial institution; but, this option requires a financial institution to collect and maintain data on these loans under the category of “other secured consumer loan”

– notwithstanding the institution’s option, may still be evaluated by the Agencies under the lending test in circumstances where consumer lending is a significant portion of an institution’s lending activity and dollar volume

15

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


CRA Evaluations Using Enhanced HMDA Data

• Mandatory reporting of Home Equity Lines of Credit may highlight additional concerns for credit needs

• New field “Uniform Loan Identifier” is the same throughout life of loan

• Interagency Q&A clarifies that bank selling and purchasing activity will be assessed so as not to artificially inflate CRA performance rating

• Awaiting further information from the Agencies to understand rating implications

16

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


OCC CRA Policies and Procedures Manual

• OCC Shift in ratings approach with respect to compliance violations

• OCC examiners will not only issue a downgrade if evidence of illegal practices “directly relates to the institution’s CRA lending activities.”

• No downgrades exceeding one rating level

• FDIC and FED yet to follow leading to non-uniform approach for insitutions

17

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Fair Lending and CRA Opportunities

• Opportunity for more robust ongoing monitoring

• Greater frequency and availability of Peer Data [Remember your Reasonably Expected Market Area (REMA) is not chosen by your institution like your Assessment Area !]

• Opportunity to use HMDA data to tell your institution’s story of service

• Fewer false positives based on indicators from HMDA data about potential discrimination

• Importance of Self Evaluation Cannot Be UNDERSTATED

18

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Fair Lending Legal Theories

• Two major legal theories in Fair Lending

– Disparate Treatment

– Disparate Impact (no intent required) * Fair Housing Act

• On June 25, 2015, the Supreme Court, by a five-to-four margin, upheld the application of disparate impact under the Fair Housing Act (“FHA”) in Texas Department of Housing & Community Affairs v. The Inclusive Communities Project, Inc. While upholding the theory, the Court imposed significant limitations on its application in practice.

• In a disparate-impact claim, a plaintiff may establish liability, without proof of intentional discrimination, if an identified business practice has a disproportionate effect on certain groups of individuals and if the practice is not grounded in soundbusiness considerations. The Court, however, imposed important limitations on the application of the theory “to protect potential defendants against abusive disparate-impact claims.” In particular, the Court held that a racial imbalance, without more, cannot sustain a claim, and directed lower courts to “examine with care” the claims at the pleadings stage. The Court emphasized the plaintiff’s burden to establish a “robust” causal connection between the challenged practice and the alleged disparities. Further, a defendant’s justification is “not contrary to the disparate-impact requirement, unless … artificial, arbitrary, and unnecessary.” Finally, “remedial orders” must “concentrate on the elimination of the offending practice” through “race-neutral means.”

– Source: Paul Hancock, Symposium: The Supreme Court recognizes but limits disparate impact in its Fair Housing Act decision, SCOTUSblog (Jun. 26, 2015, 8:58 AM), http://www.scotusblog.com/2015/06/paul-hancock-fha/

19

http://www.scotusblog.com/case-files/cases/texas-department-of-housing-and-community-affairs-v-the-inclusive-communities-project-inc/?wpmp_switcher=desktop

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Requirement to Compile and Report Data for Covered Loans

• Applies to applications for covered loans received, originated and purchased for each calendar year

• Generally: a “closed-end mortgage loan” or an “open-end line of credit”

– Not otherwise excluded – covered separately

• Both “closed-end mortgage loan” and “open-end line of credit” definitions include “extension of credit” and “secured by a lien on a dwelling”

• “Closed-end mortgage loan” is an extension of credit secured by a dwelling that is not an “open-end line of credit”

20

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Excluded Transactions

• (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)

• Notice shift to a dwelling-secured based definition rather than the purpose driving the data collection and reporting requirements

21

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Home Purchase Loan

• 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

• If multiple properties are involved, a Home purchase loan includes a covered loan secured by one dwelling and used to purchase another dwelling

• Commercial and other loans may be home purchase loans, such as a loan or line of credit to purchase an apartment building originated in the commercial loan dept.

• Home purchase loan definition includes both a combined construction/permanent loan or line of credit, and the separate permanent financing that replaces a construction-only loan or line of credit for the same borrower at a later time

• A home purchase loan does not include a construction-only loan or line of credit which are excluded from Reg C as “temporary financing”

22

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Home Improvement Loan

• Is 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

• A covered loan is a Home Improvement Loan even if only a part of the purpose is for repairing, rehabilitating, remodeling, or improving a dwelling

• Improvements to real property are considered “home improvements” – for example, installation of a swimming pool, construction of a garage, or landscaping

• Commercial and other loans may be Home Improvement loans, such as a covered loan to improve an apartment building originated in the commercial loan department

23

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Home Improvement Loan

• A covered loan 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

– 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

• 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 to determine whether home improvement purpose

– No confirmation that the borrower actually uses any of the funds for the stated purpose(s) is required

24

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Refinancing

• A covered loan in which a new, dwelling-secured debt obligation satisfies and replaces an existing, dwelling-secured debt obligation by the same borrower

• whether a refinancing has occurred is determined by reference to whether, based on the parties' contract and applicable law, the original debt obligation has been satisfied or replaced by a new debt obligation--whether the original lien is satisfied is irrelevant

• Existing debt obligation being replaced also must have been secured by a dwelling

• Same borrower undertakes both the existing and the new obligation(s)

– requirement satisfied even if only one borrower is the same on both obligations

25

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Refinancing continued

• Same borrower requirement

– Example, assume that two spouses are divorcing. If both spouses are obligated on obligation X, but only one spouse is obligated on obligation Y, then obligation Y is a refinancing if all other requirements are met. On the other hand, if only spouse A is obligated on obligation X, and only spouse B is obligated on obligation Y, then obligation Y is not a refinancing

• Where two or more new obligations replace an existing obligation, each new obligation is a refinancing if, taken together, the new obligations satisfy the existing obligation

• Where one new obligation replaces two or more existing obligations, the new obligation is a refinancing if it satisfies each of the existing obligations

26

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Exclusion for business or commercial purpose

• “Closed end mortgage loan or open-end line of credit” that is or will be made primarily for a business or commercial purpose, IS excluded UNLESS the transaction is a “home improvement loan” , “home purchase loan” or a “refinancing”

• No categorical exclusion for a business- or commercial-purpose closed-end mortgage loan or open-end line of credit, even where made primarily for a business or commercial purpose

• If the closed end mortgage loan or line or credit is either a home improvement loan, a home purchase loan, or a refinancing and no other exclusion applies, it is a covered loan.

• If loan or line is primarily for a business, commercial, or organizational purpose under Regulation Z and its related commentary, then it also is for HMDA

27

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Examples of Covered business/commercial purpose transactions

• A closed-end mortgage loan or an open-end line of credit for a business or commercial purpose but meets the definition of a home improvement loan, a home purchase loan, or a refinancing so is NOT excluded/IS covered:

• A closed-end mortgage loan or an open-end line of credit

– to purchase or to improve a multifamily dwelling or a single-family investment property, or a refinancing of a closed-end mortgage loan or an open-end line of credit secured by a multifamily dwelling or a single-family investment property

– to improve a doctor's office or a daycare center that is located in a dwelling other than a multifamily dwelling

– to a corporation, if the funds from the loan or line of credit will be used to purchase or to improve a dwelling, or if the transaction is a refinancing

28

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Examples of Excluded business/commercial purpose transactions

• A closed-end mortgage loan or an open-end line of credit which are for a business or commercial purpose and do not meet the definition of a home improvement loan, a home purchase loan, or a refinancing so IS excluded /NOT covered

• A closed-end mortgage loan or an open-end line of credit – funds will be used primarily:

– to improve or expand a business, for example to renovate a family restaurant that is not located in a dwelling, or to purchase a warehouse, business equipment, or inventory;

– for business or commercial purposes other than home purchase, home improvement, or refinancing, even if the loan or line of credit is cross-collateralized by a covered loan

29

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Multipurpose Loans

• If a covered loan is a home purchase loan as well as a home improvement loan, a refinancing, or a cash-out refinancing, report loan as a home purchase loan

• If a covered loan is a home improvement loan as well as a refinancing or cash-out refinancing report as a refinancing or a cash-out refinancing, as appropriate

• If a covered loan is a refinancing or cash-out refinancing as well as for another purpose (but not a home purchase), such as for the purpose of paying educational expenses, report as a refinancing or a cash-out refinancing, as appropriate

• If a covered loan is a home improvement loan as well as for another purpose (but not a home purchase, a refinancing or a cash-out refinancing) Report as a home improvement loan

30

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Loan purpose “Other than…”

• 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, report a purpose “other than” home purchase, home improvement, refinancing, or cash-out refinancing

– if a covered loan is for the purpose of paying educational expenses report a purpose other than home purchase, home improvement, refinancing, or cash-out refinancing.

– if the financial institution was unconditionally obligated to refinance the obligation subject to conditions within the borrower's control report a purpose other than home purchase, home improvement, refinancing, or cash-out refinancing if it is a refinancing

31

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Property Information - generally

• Report 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– address and geocoding information

• If a covered loan is related to more than one property, but only one property is taken as security (or, for application, proposed to be taken as security) report the information required for the property taken as or proposed to be security

• If more than one property is taken or, for applications, proposed to be security for a single covered loan, report the covered loan or application in a single entry on its loan/application register and provide the information required for one of the properties taken as security that contains a dwelling

– Do not report information about the other properties taken as security--for the various data collection requirements related to the property information the financial institution reports information for the property identified in this section

32

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Property Location

• Report property address corresponding to the property identified on the legal obligation related to the covered loan as identified by the applicant if loan not originated

• i. Street address. ii. City name iii. State name iv. Zip Code

• (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—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 otherwise required to report

33

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Applicant /Borrower Information - generally

• Report ethnicity, race, and sex, and whether this information was collected on the basis of visual observation or surname

• FI must ask the applicant for this information (but cannot require the applicant to provide it) regardless of taken in person, by mail or telephone, or on the internet

• Inform the applicant that Federal law requires this information to be collected in order to protect consumers and to monitor compliance with Federal statutes that prohibit discrimination against applicants on these bases

• Inform the applicant that if the information is not provided where the application is taken in person, FI is required to note the information on the basis of visual observation or surname

• For applications taken by telephone, FI must state the information in the collection form orally, except for that information which pertains uniquely to applications taken in writing, for example, the italicized language in the sample data collection form

34

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Applicant/Borrower Information - generally

• If applications accepted through electronic media with a video component, FI must treat the application as taken in person; If FI accepts an application through electronic media without a video component (for example, facsimile), FI must treat the application as accepted by mail

• If a covered loan or application includes a guarantor, FI does not report the guarantor's ethnicity, race, and sex

• If there are no co-applicants, FI must report that there is no co-applicant; If there is more than one co-applicant, FI must provide the ethnicity, race, and sex only for the first co-applicant listed on the collection form

• A co-applicant may provide an absent co-applicant's ethnicity, race, and sex on behalf of the absent co-applicant; If information is not provided for an absent co-applicant, FI must report “information not provided by applicant in mail, internet, or telephone application” for the absent co-applicant

35

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Ethnicity, race, and sex continued

• Report the ethnicity, race, and sex of an applicant as provided by 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

• FI must offer the applicant the option of selecting more than one ethnicity or race. If an applicant selects more than one ethnicity or race, FI must report each selected designation, subject to the limits described

36

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Ethnicity – Aggregate categories and subcategories

• There are two aggregate ethnicity categories: Hispanic or Latino; and Not Hispanic or Latino

• If an applicant selects Hispanic or Latino, the applicant may also select up to four ethnicity subcategories: Mexican; Puerto Rican; Cuban; and Other Hispanic or Latino.

• FI must report each aggregate ethnicity category and each ethnicity subcategory selected by the applicant

• If an applicant selects the Other Hispanic or Latino ethnicity subcategory, the applicant may also provide a particular Hispanic or Latino ethnicity not listed in the standard subcategoriesMust report both the selection of Other Hispanic or Latino and the additional information provided by the applicant

37

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Race

• Five aggregate race categories: American Indian or Alaska Native; Asian; Black or African American; Native Hawaiian or Other Pacific Islander; and White

– Asian and the Native Hawaiian or Other Pacific Islander aggregate categories have seven and four subcategories, respectively

– Asian race subcategories are: Asian Indian; Chinese, Filipino; Japanese; Korean; Vietnamese; and Other Asian

– Native Hawaiian or Other Pacific Islander race subcategories are: Native Hawaiian; Guamanian or Chamorro; Samoan; and Other Pacific Islander

• FI 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 FI must not report more than a total of five aggregate race categories and race subcategories combined.

38

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Race – “Other” subcategories

• If an applicant selects the “Other “Asian race subcategory or the “Other “ Pacific Islander race subcategory, the applicant may also provide a particular Other Asian or Other Pacific Islander race not listed in the standard subcategories

• FI 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

– Where Other race subcategory selected and also provided additional information, for purposes of the maximum of five reportable race categories and race subcategories combined set forth above, the Other race subcategory and additional information provided by the applicant together constitute only one selection

39

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Ethnicity, race, sex – generally

• 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

– FI must report whether the applicant's ethnicity, race, and sex was collected on the basis of visual observation or surname

– Collection of an applicant's ethnicity, race, and sex on the basis of visual observation or surname, 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)

40

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


Ethnicity, race, sex – generally

• Applicant 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, the applicant's ethnicity, race, and sex must be requested

– If the applicant does not provide the requested information during the in-person meeting, the information must be collected 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, the applicant's ethnicity, race, and sex are not required to be obtained

• Applicant provides the requested information for some but not all fields 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.

41

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP


More Ahead!

• Additional content from the CFPB’s public statement:…”The Bureau intends to engage in a rulemaking to reconsider various aspects of the 2015 HMDA Rule such as the institutional and transactional coverage tests and the rules discretionary data points”

• What new HMDA data will be publically available versus redacted

• Community Reinvestment Act changes

• Impact of non-uniform CRA regulatory approach

• Pending Regulatory Relief Bill

42

twitter.com/CLAconnectfacebook.com/cliftonlarsonallen

linkedin.com/company/cliftonlarsonallen

©2

01

7 C

lifto

nLa

rso

nA

llen

LLP

CLAconnect.com

Thank You!Questions? Contact: [email protected]: 781-402-6406

CLA Bankers AdvisoryA CliftonLarsonAllen LLP Division131 Hartwell Avenue, Suite 300Lexington, MA 02421T 781-402-6400 F 781-402-6450

43

http://www.twitter.com/CLA_CPAs

http://www.facebook.com/CliftonLarsonAllen

http://www.linkedin.com/company/cliftonlarsonallen

mailto:[email protected]

Documents

2018 HMDA Compliance Fair Lending and CRA Implicationsmbba-nh.org/wp-content/uploads/2018/04/HMDA-Fair... · Latest HMDA News • December 21, 2017, CFPB Public Statement on Home