Overview
The Home Mortgage Disclosure Act (HMDA) was enacted by Congress in 1975 and is implemented by Regulation C. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) transferred HMDA rulemaking authority to the Consumer Financial Protection Bureau (CFPB) and expanded the scope of information that must be collected, reported, and disclosed under HMDA. In December 2011, the CFPB restated Regulation C, 12 CFR Part 1003. In October 2015, the CFPB issued a HMDA final rule implementing the Dodd-Frank Act amendments. The Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 provided certain reporting exemptions for some financial institutions.
HMDA requires financial institutions, including credit unions, to compile and disclose data about home purchase loans, home improvement loans, and refinancings that they originate or purchase, or for which they receive applications.
The purpose of Regulation C is to provide the public with data that can be used to:
- Help determine whether credit unions are serving the housing needs of their communities;
- Assist public officials in distributing public-sector investments so as to attract private investment to areas where it is needed; and
- Assist in identifying possible discriminatory lending patterns and enforcing compliance with anti-discrimination statutes.
Regulation C is not intended to encourage unsound lending practices or the allocation of credit.
Full text of Regulation C can be found here.
Associated Risks
Compliance risk can occur when the credit union fails to implement the necessary controls to comply with HMDA.
Reputation risk can occur when the credit union incurs fines and penalties as a result of failure to comply with HMDA; or receives negative publicity or declined membership as a result of failure to comply with HMDA.
Strategic risk can occur when the credit union fails to perform adequate planning and due diligence in regard to HMDA.
Examination Objectives
- Appraise the quality of the credit union’s compliance risk management system to ensure compliance with HMDA and Regulation C;
- Determine the reliance that can be placed on the credit union’s compliance risk management system, including internal controls, policies, procedures, and compliance review and audit functions for HMDA and Regulation C;
- Determine the accuracy and timeliness of the credit union’s submitted HMDA LAR; and
- Initiate corrective action when policies or internal controls are deficient, or when violations of law or regulation are identified.
Examination Procedures
Initial Procedures
A. Credit Union Coverage
A credit union is subject to Regulation C if the requirements of §1003.2(g)(1) are met. Determine whether the credit union meets the Asset-Size Threshold Test, the Location Test, the Loan Activity Test, the Federally Related Test, and the Loan-Volume Threshold Test, which are listed below. If all five tests are satisfied, then the credit union is required to report mortgage data in accordance with Regulation C.
- Asset-Size Threshold Test. Determine whether, on the preceding December 31, the credit union had assets in excess of the asset-size threshold published annually in the Federal Register, as included in the Official Interpretations, §1003, comment 2(g)-2. §1003.2(g)(1)(i).
- Location Test. Determine whether, on the preceding December 31, the credit union had a home or branch office located in an MSA. §1003.2(g)(1)(ii).
- Loan Activity Test. Determine whether the credit union 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 during the preceding calendar year. §1003.2(g)(1)(iii).
- Federally Related Test. Determine whether the credit union meets one of the following criteria:
- The credit union is federally insured or federally regulated §1003.2(g)(1)(iv)(A); or
- The credit union 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 §1003.2(g)(1)(iv)(B).
- Loan-Volume Threshold Test. Effective January 1, 2018, and through June 30, 2020, determine whether the credit union originated at least 25 closed-end mortgage loans in each of the two preceding calendar years, or originated at least 500 open-end lines of credit in each of the two preceding calendar years. Effective July 1, 2020, and through December 31, 2021, determine whether the credit union originated at least 100 closed-end mortgage loans in each of the two preceding calendar years, or originated at least 500 open-end lines of credit in each of the two preceding calendar years. Effective January 1, 2022, determine whether the credit union 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. Determine whether transactions are appropriately excluded from coverage by Regulation C according to criteria in §1003.3(c)(1)–(13). The list of excluded transactions and definitions for closed-end mortgage loans and open-end lines of credit are described below in the Transactional Coverage section of these procedures.
Merger or Acquisition Activity
If recent merger or acquisition activity has occurred, determine whether the surviving or newly formed credit union meets the definition of a financial institution in §1003.2(g). After a merger or acquisition, the surviving or newly formed credit union is a financial institution according to §1003.2(g) if it, considering the combined assets, location, and lending activity of the surviving or newly formed credit union and the merged or acquired institutions or acquired branches, satisfies the criteria included in §1003.2(g). For examples of coverage by Regulation C after merger or acquisition activity, please see Official Interpretations, Supplement I to §1003, comment 2(g)-3.
B. Transactional Coverage
Determine whether a transaction is subject to Regulation C because it:
- meets the definition of a covered loan as defined in §1003.2(e); and
- is not an excluded transaction as defined in §1003.3(c)(1)–(13).
Covered Loans
Credit unions that meet the definition of a financial institution according to §1003.2(g) must report data on transactions that meet the definition of a covered loan in §1003.2(e). Types of transactions enumerated in §1003.3(c)(1)–(13) are explicitly excluded from Regulation C reporting requirements.
- Covered Loan. Determine whether the transaction meets the definition of a covered loan according to §1003.2(e) and should be reported under Regulation C. A covered loan is a closed-end mortgage loan or an open-end line of credit that is not a transaction specifically excluded from the reporting requirements of the regulation.
- Determine whether the transaction is a closed-end mortgage loan as defined in §1003.2(d). A closed-end mortgage loan is:
- An extension of credit;
- Secured by a lien on a dwelling; and
- Is not an open-ended line of credit, as defined by §1003.2(o).
- Determine whether the transaction is an open-end line of credit as defined in §1003.2(o). An open-end line of credit is:
- An extension of credit;
- Secured by a lien on a dwelling; and
- Is an open-end credit plan as defined in Regulation Z, §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).
- Determine whether the transaction is a closed-end mortgage loan as defined in §1003.2(d). A closed-end mortgage loan is:
- Note: Further, a covered loan secured by five or more separate dwellings, which are not multifamily dwellings, in more than one location is not a loan secured by a multifamily dwelling. For example, 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). Likewise, a covered loan secured by five or more separate dwellings that are located within a multifamily dwelling, but which is not secured by the entire multifamily dwelling (e.g., an entire apartment building or housing complex), is not secured by a multifamily dwelling as defined by §1003.2(n). For example, assume that an investor purchases 10 individual unit condominiums in a 100-unit condominium complex using a covered loan. The covered loan would not be secured by a multifamily dwelling as defined by §1003.2(n). Comment 2(n)-3.
- Excluded Transactions. Determine whether the type of transaction is listed as an excluded transaction in §1003.3(c). The following transactions are not required to be reported under Regulation C:
- A closed-end mortgage loan or open-end line of credit originated or purchased by a credit union acting in a fiduciary capacity §1003.3(c)(1);
- A closed-end mortgage loan or open-end line of credit secured by a lien on unimproved land §1003.3(c)(2);
- Temporary financing §1003.3(c)(3);
- The purchase of an interest in a pool of closed-end mortgage loans or open-end lines of credit §1003.3(c)(4);
- The purchase solely of the right to service closed-end mortgage loans or open-end lines of credit §1003.3(c)(5);
- 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), §1003.3(c)(6);
- 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 §1003.3(c)(7);
- The purchase of a partial interest in a closed-end mortgage loan or open-end line of credit §1003.3(c)(8);
- A closed-end mortgage loan or open-end line of credit that is or will be used primarily for agricultural purposes §1003.3(c)(9);
- 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), §1003.3(c)(10);
- Exclusions based on a credit union’s loan-volume:
- Effective January 1, 2018, and through June 30, 2020, a credit union that originated fewer than 25 closed-end mortgage loans in either of the two proceeding calendar years, and effective July 1, 2020, a credit union that originated fewer than 100 closed-end mortgage loans in either of the two preceding calendar years, is not required to report closed-end mortgage loans §1003.3(c)(11),
- Effective January 1, 2018, and through December 31, 2021, a credit union that originated fewer than 500 open-end lines of credit in either of the two preceding calendar years, and effective January 1, 2022, a credit union that originated fewer than 200 open-end lines of credit in either of the two preceding calendar years, is not required to report open-end lines of credit §1003.3(c)(12); and
- 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 (as before, New York CEMA) classified as a supplemental mortgage under New York Tax Law section 255, where final action was taken on the consolidation and the new funds transaction in the same calendar year. §1003.3(c)(13).
Compilation of Reportable Data – §1003.4
C. Partial Exemptions
The Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 created partial exemptions, not complete exclusions, from some of HMDA’s reporting requirements. The partial exemptions were effective May 24, 2018, and apply to the collection, recording, and reporting of HMDA data on or after that date. If a covered loan or application is covered by a partial exemption, the credit union is not required to collect, record, and report specific data points. The partial exemptions apply only if applicable loan-volume thresholds are met.
Loan-Volume Thresholds
A partial exemption applies to a credit union’s applications for, originations of, and purchases of closed-end mortgage loans if the credit union originated fewer than 500 closed-end mortgage loans in each of the two preceding calendar years §1003.3(d)(1)(iv)(2). A partial exemption applies to a credit union’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 §1003.3(d)(1)(iv)(3). However, during 2018 and 2019, a credit union is not required to collect or report any information for open-end lines of credit if the credit union originated fewer than 500 open-end lines of credit during either of the two preceding calendar years. This is because, during 2018 and 2019, open-end lines of credit are excluded transactions for a credit union that originated fewer than 500 open-end lines of credit during either of the two preceding calendar years. 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, a credit union may be able to rely on one or both partial exemptions.
If a covered loan or application is covered by a partial exemption, the credit union is required to collect, record, and report 22 specific data points specified in §1003.4(a)(1)–(38), but is exempt from collecting, recording, and reporting 26 other specific data points for that transaction. A credit union may voluntarily report any or all of the 26 data points for a covered loan or application covered by a partial exemption §1003.3(d)(1)(iv)(4).
Charts illustrating the 22 data points not covered by the partial exemptions and the 26 data points covered by the partial exemptions can be found in Appendix F of A Guide to HMDA Reporting: Getting It Right!.
- Closed-End Mortgage Loans. Determine whether the credit union originated fewer than 500 closed-end mortgage loans in each of the two preceding calendar years thereby qualifying for a partial exemption for closed-end mortgage loans; and
- Open-End Lines of Credit. Determine whether the credit union originated fewer than 500 open-end lines of credit in each of the two preceding calendar years thereby qualifying for a partial exemption for open-end lines of credit.
Disclosure and Reporting – §1003.5
- Determine whether the credit union satisfies requirements related to disclosure and reporting:
- Reporting to agency. Determine whether the credit union submits its annual HMDA LAR to the appropriate Federal agency no later than March 1 following the calendar year for which the data is compiled. §1003.5(a)(1)(i).
- HMDA LAR retention. Determine whether the credit union retained a copy of its submitted annual HMDA LAR for at least three years. §1003.5(a)(1)(i).
- Disclosure statement. Determine whether no later than three business days after the credit union receives notice from the FFIEC that the credit union’s disclosure statement is available the credit union makes 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 credit union’s disclosure statement may be obtained on the CFPB’s website at consumerfinance.gov/hmda. §1003.5(b)(2). A credit union’s disclosure statement may also be obtained from https://ffiec.cfpb.gov.
- Modified HMDA LAR. Determine whether the credit union makes 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 credit union’s HMDA LAR, as modified by the CFPB to protect applicant and borrower privacy, may be obtained on the CFPB’s website at consumerfinance.gov/hmda. §1003.5(c). A credit union’s modified HMDA LAR may also be obtained from https://ffiec.cfpb.gov/.
- Posted notice of availability of data. Determine whether the credit union posts a general notice about the availability of its HMDA data in the lobby of its home office and of each branch office located in each MSA and each MD. This notice must clearly convey that the credit union’s HMDA data is available on the CFPB’s website at www.consumerfinance.gov/hmda. §1003.5(e). A credit union’s HMDA data is also available at https://ffiec.cfpb.gov.
Transaction Testing
- To conduct HMDA transaction testing, examiners select a random sample of entries from the credit union’s HMDA LAR (Total Sample) and ask the credit union to provide the loan or application files (loan files) that correspond to the HMDA LAR sample entries. The size of the Total Sample will depend on the size of the credit union’s HMDA LAR, as shown in column A of the “HMDA Transaction Testing Sample Sizes and Thresholds” table (HMDA table) shown below.
- If a credit union’s HMDA data are collected through multiple data collection and reporting systems, examiners may test a single sample from the credit union’s entire HMDA LAR, test separate samples from each system, or test samples from selected systems chosen based on risk. If examiners do not take a single sample from the entire HMDA LAR, they should document in their work papers from which system(s) they chose the sample(s) and why.
- Once examiners receive the loan files from the credit union, they should verify the accuracy of the data in the entries in the HMDA LAR sample(s) against the corresponding loan files. Examiners should document in their work papers any differences between the data in the HMDA LAR and information in files, and determine whether the differences may be explained by any additional information that the credit union may provide. Differences that are not adequately explained should be identified as errors.
- All data fields within the sample may be reviewed, or the supervisory agency may prioritize designated fields for review.
- HMDA transaction testing can be divided into two stages. Both stages test for errors only in individual data fields that are selected for review as provided above in paragraph 4. In Stage 1, examiners review only a subset of the sample (Initial Sample). The size of the Initial Sample will depend on the size of the credit union’s HMDA LAR, as shown in column B of the HMDA table. If the number of errors identified in the Initial Sample falls below the Initial Sample Threshold in column C of the HMDA table for each and every data field reviewed, no further sample review is required and the examiners may conclude the transaction testing. If the number of errors in any data field reviewed equals or exceeds the Initial Sample Threshold in column C of the HMDA table, examiners should proceed to Stage 2 and review the remainder of the Total Sample. In Stage 2, examiners must review all data fields that had one or more errors in the Initial Sample and may review any or all Initial Sample data fields reviewed and found to have no errors in Stage 1.
- If, after reviewing the remainder of the Total Sample in Stage 2, the total number of errors in any data field equals or exceeds the Resubmission Threshold in column D of the HMDA table, examiners should direct the credit union to correct any such data field in its full HMDA LAR and resubmit its HMDA LAR with the corrected data field(s).
- A credit union may also be directed to correct one or more individual data fields and resubmit its HMDA LAR, even if errors in that field or fields do not meet the Resubmission Threshold in column D of the HMDA table, if examiners have a reasonable basis to believe that errors in that field or fields will likely make analysis of the HMDA data unreliable. To illustrate, assume examiners discover that a credit union has incorrectly coded withdrawn applications as denials to such an extent that it likely prevents reliable analysis of underwriting disparities in a fair lending examination. Examiners may direct a credit union to correct the Action Taken data field and resubmit the HMDA LAR even if the number of Action Taken errors found in the Total Sample does not equal or exceed the Resubmission Threshold in column D of the HMDA table.
- A credit union may be directed to resubmit its HMDA LAR in order to include reportable applications or loans that examiners determined were previously omitted from the HMDA LAR.
Tolerances
- For the sole purpose of determining whether the number of errors equals or exceeds the Initial Sample Threshold in column C or the Resubmission Threshold in column D of the HMDA table, examiners should not count the following differences between data in the HMDA LAR and in the loan files as errors:
- Three calendar days or less in the date the application was received or the date shown on the application form reported pursuant to §1003.4(a)(1)(ii);
- One thousand dollars or less in the amount of the covered loan or the amount applied for, as applicable, reported pursuant to §1003.4(a)(7);
- Three calendar days or less in the date of the action taken by the credit union reported pursuant to §1003.4(a)(8)(ii), provided that such differences do not result in reporting data for the wrong calendar year; and
- Rounding errors in reporting the dollar amount, rounded to the nearest thousand, of 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, reported pursuant to §1003.4(a)(10)(iii)
Ethnicity or Race Data Errors
- For purposes of these guidelines, the term “data field” generally refers to individual HMDA Filing Instructions Guide (FIG) fields, each identified by a distinct Data Field Number and Data Field Name. With respect to information on the ethnicity or race of an applicant or borrower, or co-applicant or co-borrower, however, a data field consists of a group of FIG fields as follows:
- The Ethnicity of Applicant or Borrower data field group: comprised of six FIG fields with information on an applicant’s or borrower’s ethnicity (FIG Data Field Numbers 19-24);
- The Ethnicity of Co-Applicant or Co-Borrower data field group: comprised of six FIG fields with information on a co-applicant’s or co-borrower’s ethnicity (FIG Data Field Numbers 25-30);
- The Race of Applicant or Borrower data field group: comprised of eight FIG fields with information on an applicant’s or borrower’s race (FIG Data Field Numbers 33-40); and
- The Race of Co-Applicant or Co-Borrower data field group: comprised of eight FIG fields with information on a co-applicant’s or co-borrower’s race (FIG Data Field Numbers 41-48).[1]
Prospective Changes
- Examiners may direct the credit union to make any appropriate changes in its policies, procedures, audit processes, or other aspects of its compliance management system needed to prevent the reoccurrence of errors identified within the sample that are—absent such changes—capable of repetition, even if the number of errors does not equal or exceed either the Initial Sample Threshold in column C or the Resubmission Threshold in column D of the HMDA table, or even if the errors fall within the tolerances provided in paragraph 9.
HMDA Transaction Testing Sample Sizes and Thresholds
| HMDA LAR Count | A Total Sample Size | B Initial Sample Size | C Initial Sample Size |
D Resubmission Threshold |
|
|---|---|---|---|---|---|
| # | % | ||||
| 25-50 | 30* | 15 | 2 | 3 | 10.0* |
| 51-100 | 30 | 20 | 2 | 3 | 10.0 |
| 101-130 | 47 | 29 | 2 | 3 | 6.4 |
| 131-190 | 56 | 29 | 2 | 3 | 5.4 |
| 191-500 | 59 | 30 | 2 | 3 | 5.1 |
| 501-100,000 | 79 | 35 | 2 | 4 | 5.1 |
| 100,001+ | 159 | 61 | 2 | 4 | 2.5 |
* For credit unions with fewer than 30 HMDA LAR lines, the full sample size is the credit union’s total number of HMDA LAR lines. The Resubmission Threshold number remains at 3. Accordingly, the Resubmission Threshold percentage will be higher for credit unions with fewer than 30 HMDA LAR lines.
Examples
- Credit Union A’s HMDA LAR contains 35 entries. Examiners select a Total Sample of 30 loans as shown in column A of the HMDA table.
- Examiners test the Initial Sample of 15 as shown in column B of the HMDA table and find two errors in the Action Taken data field, which equals the Initial Sample Threshold in column C of the HMDA table.
- Accordingly, the examiners proceed to review the remaining 15 entries in the Total Sample and find one additional error in the Action Taken data field for a total of three errors in that field, which equals the Resubmission Threshold in column D of the HMDA table. In the review of the remaining entries in the Total Sample, examiners also find two errors in the Rate Spread data field, which is below the Resubmission Threshold in column D of the HMDA table.
- Therefore, Credit Union A is directed to correct the Action Taken data field and resubmit its HMDA LAR with that field corrected.
- Credit Union B’s HMDA LAR contains 125 entries. Examiners select a Total Sample of 47 loans as shown in column A of the HMDA table.
- Examiners test the Initial Sample of 29 loans as shown in column B of the HMDA table and find one error in the Action Taken data field, which is less than the Initial Sample Threshold in column C of the HMDA table; one error in the Loan Type data field, which is less than the Initial Sample Threshold; and no other errors.
- Therefore, examiners end the HMDA transaction testing for Credit Union B and do not proceed to Stage 2 testing of the 18 remaining entries in the Total Sample because no Stage 1 errors in any single data field equaled or exceeded the Initial Sample Threshold.
- Credit Union C’s HMDA LAR contains 500,000 entries. Examiners select a Total Sample of 159 loans as shown in column A of the HMDA table.
- Examiners test the Initial Sample of 61 loans as shown in column B of the HMDA table and find two errors in the Action Taken data field, which equals the Initial Sample Threshold in column C of the HMDA table; and five errors in the Loan Amount data field, which exceeds the Initial Sample Threshold in column C of the HMDA table.
- Accordingly, examiners proceed to test the remaining 98 entries in the Total Sample and find two additional errors in the Action Taken data field, for a total of four errors in that field, which equals the Resubmission Threshold in column D of the HMDA table; five additional errors in the Loan Amount data field, for a total of ten errors in that field, which exceeds the Resubmission Threshold in column D of the HMDA table; and four errors in the Census Tract data field, which equals the Resubmission Threshold in column D of the HMDA table.
- Therefore, Credit Union C is directed to correct the Action Taken data field, the Loan Amount data field, and the Census Tract data field and resubmit its HMDA LAR with those fields corrected.
- Credit Union D’s HMDA LAR contains 1,000 entries. Examiners select a Total Sample of 79 loans as shown in column A of the HMDA table.
- Examiners test the Initial Sample of 35 loans as shown in column B of the HMDA table and find one loan with an error in the FIG Applicant or Borrower Race: 1 field, and a different loan with an error in the FIG Applicant or Borrower Race: 2 field, for a total of two errors in the Race of Applicant or Borrower data field group, which equals the Initial Sample Threshold in column C of the HMDA table.
- Accordingly, the examiners proceed to test the remaining 44 entries in the Total Sample and find one loan with an error in the FIG Applicant or Borrower Race: 2 field, and one loan with errors in both the FIG Applicant or Borrower Race: 1 field and the FIG Applicant or Borrower Race: 2 field, for a total of four loans with at least one error in one of the eight Race of Applicant or Borrower FIG fields, which equals the Resubmission Threshold in column D of the HMDA table.
- Therefore, Credit Union D is directed to correct all eight FIG fields in the Race of Applicant or Borrower data field group and resubmit its HMDA LAR with those FIG fields corrected.
- The following table summarizes how the errors in this example are counted toward the Resubmission Threshold in column D of the HMDA table:
Example: Calculating Error Rates for Applicant or Borrower Race
| FIG Applicant or Borrower Race: 1 Field | FIG Applicant or Borrower Race: 2 Field | Race of Applicant or Borrower Data Field Group | |
|---|---|---|---|
| Loan #1 | Error (Initial Sample) | 1 | |
| Loan #2 | Error (Initial Sample) | 1 | |
| Loan #3 | Error (Remaining Sample) | 1 | |
| Loan #4 | Error (Remaining Sample) | Error (Remaining Sample) | 1 |
| Total Errors | 4 |
Attachment A
HMDA
CHECKLIST
Initial Procedures
| Item | Description | YES | NO | N/A |
|---|---|---|---|---|
| 1 | Did the credit union have assets exceeding the current asset test as of December 31 of the preceding year? §1003.2(g)(1)(i) | |||
| 2 | Did the credit union have a home or branch office in a Metropolitan Statistical Area (MSA) on December 31 of the preceding year? §1003.2(g)(1)(ii) | |||
| 3 | Did the credit union originate, in the preceding calendar year, at least one home purchase loan (other than temporary financing such as a construction loan) or refinancing of a home purchase loan secured by a first lien on a one-to-four-unit dwelling? §1003.2(g)(1)(iii) | |||
| 4 |
Effective January 1, 2018, and through June 30, 2020, did the credit union originate at least 25 closed-end mortgage loans in each of the two preceding calendar years, or originate at least 500 open-end lines of credit in each of the two preceding calendar years? §1003.2(g)(1)(v) Effective July 1, 2020, and through December 31, 2021, did the credit union originate at least 100 closed-end mortgage loans in each of the two preceding calendar years, or originate at least 500 open-end lines of credit in each of the two preceding calendar years? Effective January 1, 2022, did the credit union originate at least 100 closed-end mortgage loans in each of the two preceding calendar years, or originate at least 200 open-end lines of credit in each of the two preceding calendar years? |
Note: If the answer to any one of the above questions is “No,” then the credit union is not required to collect HMDA data for the current year. Stop here.
Note: If all of the answers to questions 1, 2, 3, and 4 are "Yes," the credit union is subject to HMDA in the current year and the remainder of the checklist should be completed (unless exempt by virtue of similar state law).[3]
| Item | Description | YES | NO | N/A |
|---|---|---|---|---|
| 5 | Were there any mergers or acquisitions since January 1 of the preceding calendar year? | |||
| 6 | Was either institution required to report under HMDA that year? |
Note: If the answer to question 6 is “No,” the merged institution does not have to report transactions that occurred during the year of the merger. In that situation, data collection should begin on January 1 of the following calendar year.
If a reporting institution merged with a non-reporting institution, and the reporting institution is the surviving institution, for the year of the merger, data collection is required for the reporting institution’s transactions; data collection is optional for the transactions handled in offices of the previously exempt non-reporting institution.
If a reporting institution merged with a non-reporting institution, and the non-reporting institution is the surviving institution, or a new institution is formed, for the year of the merger, data collection is required for the reporting institution for transactions that occurred prior to the merger; data collection is optional for transactions that occurred after the merger date.
If both institutions were HMDA reporters, data collection is required for the entire year of the merger. The merged institution may file either a consolidated submission or separate submissions.
| Item | Description | YES | NO | N/A |
|---|---|---|---|---|
| 7 | Does the credit union have policies and procedures as well as training in place that are adequate, on an ongoing basis, to ensure compliance with HMDA and Regulation C? | |||
| 8 | Do the credit union’s internal review procedures and audit schedules comprehensively cover all of the pertinent regulatory requirements associated with HMDA and Regulation C? | |||
| 9 | Do the audits or internal analysis performed by the credit union include a reasonable amount of transactional analysis, written reports that detail findings and recommendations for corrective actions? | |||
| 10 | Do the credit union’s internal reviews include any regulatory changes that may have occurred since the prior examination? | |||
| 11 | Has the credit union assigned one or more individuals responsibility for oversight, data update, and data entry, along with timeliness of the credit union’s data submission? | |||
| 12 | Is the credit union’s Board of Directors informed of the results of all analyses? | |||
| 13 | Did individuals who have been assigned responsibility for data entry receive appropriate training in the completion of the HMDA LAR and receive copies of Regulation C, the Official Interpretations of Regulation C, and the FFIEC’s “A Guide to HMDA Reporting: Getting it Right!” in a timely manner? | |||
| 14 | Has the credit union ensured effective corrective action in response to previously identified deficiencies? | |||
| 15 | Does the credit union perform HMDA LAR volume analysis from year-to-year to detect increases or decreases in activity for possible omissions of data? | |||
| 16 | Does the credit union maintain documentation for those loans it packages and sells to other institutions? |
Evaluation of Policies and Procedures
| Item | Description | YES | NO | N/A |
|---|---|---|---|---|
| 17 | Does the individual(s) assigned responsibility for the credit union’s compliance with HMDA and Regulation C possess an adequate level of knowledge and have they established a method for staying abreast of changes to laws and regulations? | |||
| 18 | Does the credit union ensure that individuals assigned compliance responsibilities receive adequate training to ensure compliance with the requirements of the regulation? | |||
| 19 | Does the individual(s) assigned responsibility for the credit union’s compliance with HMDA and Regulation C know whom to contact, at the credit union or their supervisory agency, if they have questions not answered by the written materials? | |||
| 20 | Has the credit union established and implemented adequate controls to ensure that separation of duties exists (e.g., data entry, review, oversight, and approval)? | |||
| 21 | Does the credit union maintain internal reports or records that document policy and procedure revisions as well as any informal self-assessment of the credit union’s compliance with the regulation? | |||
| 22 | Does the credit union have procedures in place for identifying transactions that are not required to be reported (i.e., excluded transactions)? | |||
| 23 | Does the credit union have policies and procedures in place that address HMDA LAR reporting responsibilities for transactions involving more than one institution? | |||
| 24 | Does the credit union have procedures in place for determining whether it qualifies for the partial exemptions (closed-end mortgage loans and open-end lines of credit)? | |||
| 25 | If the credit union offers preapprovals, does the credit union’s preapproval program meet the specifications detailed in the HMDA regulation? If so, do the credit union’s policies and procedures provide adequate guidance for the reporting of preapproval requests that are approved or denied in accordance with the regulation? | |||
| 26 | Has the credit union established a method for determining and reporting the lien status for all originated loans and applications? | |||
| 27 | Do the credit union’s policies and procedures contain guidance for collecting ethnicity, race, and sex for all loan applications, including applications made by telephone, mail, and Internet? | |||
| 28 | Do the credit union’s policies and procedures address the collection of the rate spread (difference between the APR and the average prime offer rate for a comparable transaction as of the date the interest rate is set)? | |||
| 29 | Has the credit union established a system for tracking rate lock dates and calculating the rate spread? | |||
| 30 | Do the credit union’s policies and procedures address how to determine if a loan is subject to the Home Ownership and Equity Protection Act and the reporting of these loans? | |||
| 31 | Is the HMDA LAR updated within 30 days after the end of each calendar quarter? | |||
| 32 | Is data collected at all branches, and if so, are the appropriate personnel sufficiently trained to ensure that all branches are reporting data under the same guidelines? | |||
| 33 | Are the credit union’s loan officers, including loan officers in the business loan department who may handle loan applications reportable under HMDA (including loans and applications for multifamily or mixed-use properties and small business refinances secured by residential real estate), informed of the reporting requirements necessary to assemble the information? | |||
| 34 | Has the Board of Directors established an independent review of the policies, procedures, and HMDA data to ensure compliance and accuracy? | |||
| 35 | Is the Board of Directors advised each year of the accuracy and timeliness of the credit union’s data submissions? | |||
| 36 | Does the credit union have procedures in place to comply with the requirement to submit data in electronic format to the appropriate Federal agency? | |||
| 37 | Are the credit union’s loan officers familiar with the disclosure, reporting, and retention requirements associated with the loan application registers and the FFIEC public disclosure statements? | |||
| 38 | Are the credit union’s loan officers familiar with the disclosure statements that will be produced from the data? | |||
| 39 | Are the credit union’s loan officers aware that civil money penalties may be imposed when a credit union has submitted erroneous data and has not established adequate procedures to ensure the accuracy of the data? | |||
| 40 | Are the credit union’s loan officers aware that correction and resubmission of erroneous data will be required if the number of errors identified reaches certain resubmission thresholds? |
Transaction Testing
| Item | Description | YES | NO | N/A |
|---|---|---|---|---|
| 41 | Has the credit union accurately compiled home mortgage disclosure information on a register in the format prescribed in Regulation C? | |||
| 42 | Has the credit union been directed to correct and resubmit its HMDA data when necessary? |
Disclosure and Reporting
| Item | Description | YES | NO | N/A |
|---|---|---|---|---|
| 43 | Does the credit union submit its annual HMDA LAR to the appropriate Federal agency no later than March 1 following the calendar year for which the data is compiled? | |||
| 44 | If quarterly reporting is required, does the credit union submit the data within 60 calendar days after the end of the calendar quarter? | |||
| 45 | Does the credit union maintain its annual HMDA LAR for at least 3 years after submission? | |||
| 46 | No later than three business days after receiving notice from the FFIEC that the disclosure statement is available, does the credit union 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 credit union’s disclosure statement may be obtained on the CFPB’s website at www.consumerfinance.gov/hmda? | |||
| 47 | Does the credit union 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 credit union’s LAR, as modified by the CFPB to protect applicant and borrower privacy, may be obtain on the CFPB’s website at www.consumerfinance/gov/hmda? | |||
| 48 | Does the credit union make the notice regarding its modified LAR available to the public for three years and the notice regarding its disclosure statement available to the public for five years? | |||
| 49 | Does the credit union make the notices regarding its modified LAR and disclosure statement available during the hours the office is normally open to the public for business? | |||
| 50 | If the credit union imposes a fee for costs incurred in providing or reproducing the data, is the fee reasonable? | |||
| 51 | Does the credit union 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 MD, which clearly conveys that the credit union’s HMDA data is available on the CFPB’s website at www.consumerfinance.gov/hmda? | |||
| 52 | If the credit union has a subsidiary covered by HMDA, did the subsidiary complete a separate HMDA LAR? | |||
| 53 | If the credit union has a subsidiary covered by HMDA, did the subsidiary submit a completed HMDA LAR directly to the appropriate Federal agency? | |||
| 54 | If the answer to the question above is “No,” did the subsidiary submit a completed HMDA LAR through its parent? | |||
| 55 | Was the credit union’s HMDA LAR transmittal sheet accurately completed? | |||
| 56 | Did an authorized representative of the credit union with knowledge of the data submitted certify the accuracy and completeness of the data? | |||
| 57 | Is the signature of the representative who certified the accuracy of the data retained on file at the credit union? | |||
| 58 | If there were errors in the HMDA LAR, did the credit union take steps to correct and prevent the occurrence of such errors in the future? | |||
| 59 | Does the credit union use materials available from the Census Bureau or from a private publisher, or an automated geocoding system in order to obtain the proper census tract numbers? | |||
| 60 | If the credit union relies on outside assistance to obtain the census tract numbers (e.g., private “geocoding” services or real estate appraisals), does the credit union have adequate procedures in place to ensure that the census tract numbers are obtained in instances where they are not provided by the outside source? | |||
| 61 | If the credit union relies on outside assistance to obtain the census tract numbers (e.g., private “geocoding” services or real estate appraisals), has the credit union taken steps to ensure that the provider of outside services is using the appropriate Census Bureau data? |
Footnotes
[1] Data fields indicating whether ethnicity or race information was collected on the basis of visual observation or surname (FIG Data Field Numbers 31, 32, 49, and 50) are not included in any data group enumerated in paragraph 10 and are treated as individual data fields for purposes of these guidelines.
[2] Example 4 describes analogous error rates and corrective actions for the race field.
[3] Credit unions that are not federally insured are subject to HMDA only if they answered “Yes” to questions 1, 2, 3, and 4 and at least one of the loans in question 3 was insured, guaranteed, or supplemented by a Federal agency or was intended by the credit union for sale to Fannie Mae or Freddie Mac. §1003.2(g)(1)(iv).