V. Consumer Compliance Lending Issues - Home Mortgage Disclosure Act

V. Lending — HMDA

FDIC Consumer Compliance Examination Manual — Jul y 2021 V–9.1

Home Mortgage Disclosure Act

Background

The Home M ortgage Disclosure Act requires certain financial

institutions to collect, report, and disclose information about

their mortgage lending activity. HMDA was originally

enacted by the Congress in 1975 and is implemented by

Regulation C (12 CFR Part 1003).

HMDA was enacted given public concern over credit

shortages in certain neighborhoods. In particular, Congress

believed that some financial institutions had contributed to the

decline of various geographic areas through their failure to

provide adequate home financing to qualified applicants on

reasonable terms and conditions. Thus, one statutory purpose

of HMDA is to provide the public with information that will

help show whether financial institutions are serving the

housing credit needs of the communities and neighborhoods in

which they are located. A second statutory purpose is to aid

public officials in distributing public sector investment so as to

attract private investment to areas where it is needed. Finally,

the Financial Institutions Reform, Recovery, and Enforcement

Act of 1989 (FIRREA) amended HM DA to require the

collection and disclosure of data about applicant and borrower

characteristics to assist in identifying possible discriminatory

lending patterns and enforcing antidiscrimination statutes.

As the name imp lies, HM DA is a disclosure law that relies

upon public scrutiny for its effectiveness. It does not prohibit

any specific activity of lenders, and it does not establish a

quota system of mortgage loans to be made in any geograp hic

area.

Between 1988 and 1992, Congress amended HM DA’s

coverage. Coverage was expanded in the FIRREA

amendments to include many independent nondepository

mortgage lenders, in addition to the previously covered banks,

savings associations, and credit unions. Coverage of

independent mortgage bankers was further expanded by the

Federal Deposit Insurance Corporation Improvement Act of

1991 HMDA amendments. For a more detailed discussion of

the history of HM DA, see the Federal Financial Institutions

Examination Council’s (FFIEC) website at

www.ffiec.gov/hmda/history2.htm

Prior to the Dodd-Frank Wall Street Reform and Consumer

Protection Act of 2010 (Dodd-Frank Act), HM DA required

financial institutions to report data regarding applications, loan

originations, and loan purchases, as well as certain requests

____________________

12 USC 2801–2810. The HMDA Interagency Examination Procedures cover

HMDA data collected in or after 2018, that is, for loans and applications for

which final action was taken in or after 2018.

In December 2011, the Bureau restated the FRB’s existing Regulation C at 12

CFR 1003. See 76 Fed. Reg. 78465 (Dec. 19, 2011).

80 Fed. Reg. 66128 (Oct. 28, 2015).

under a pre-approval program (as defined in Regulation C).

HMDA also required financial institutions to report certain

applicant and borrower demographic data, such as ethnicity,

race, gender, and gross income. In addition, the reporting of

certain pricing information and the type of purchaser was

required. Data was reported in a “register” reporting format,

compiled by supervisory agencies, and disclosed to the public.

The Dodd-Frank Act amended HM DA to, among other things,

require reporting of additional data points, transfer HMDA

rulemaking authority from the Board of Governors of the

Federal Reserve System (FRB) to the Consumer Financial

Protection Bureau (Bureau), and provide the Bureau with

authority to mandate collection, recording, and reporting of

such other information as the Bureau may require.

In August

2014, the Bureau proposed amendments to Regulation C to

implement the Dodd-Frank Act changes; to require collection,

recording, and reporting of additional information to further

HMDA’s purposes; and to modernize the manner in which

covered financial institutions report HMDA data. The Bureau

published a final rule amending Regulation C in October 2015

(2015 HMDA Rule).

The Bureau published a final rule

further amending Regulation C in September 2017 to facilitate

implementation of the 2015 HMDA Rule (2017 HM DA

Rule).

Beginning in 2018, as discussed further below, the 2015

HMDA Rule requires that financial institutions continue to

report data regarding applications, loan originations, and loan

purchases. The Bureau’s 2015 HM DA Rule changed: (1) the

definition of a financial institution that is subject to Regulation

C; (2) the types of transactions that are subject to Regulation

C; (3) the data that financial institutions are required to collect,

record, and report pursuant to Regulation C; and (4) the

processes for reporting and disclosing HM DA data. The data

are submitted electronically to the Bureau on behalf of the

app ropriate Federal agency associated with the rep orter, and

most of the data are made available to the public on both an

aggregate and a loan-level basis.

On May 24, 2018, the President signed the Economic Growth,

Regulatory Relief, and Consumer Protection Act (2018 Act)

into law.

Effective M ay 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)

82 Fed. Reg. 43088 (Sept. 13, 2017).

Information about the HMDA Platform through which financial institutions

submit HMDA data to the Bureau to be processed and disclosed is available

at https://ffiec.cfpb.gov/.

Pub. L. 115-174, 132 Stat. 1296 (2018), Section 104(a) (codified at 12 USC

2803).

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of the 2018 Act (2018 HM DA Rule). The 2018 HM DA Rule

was published in the Federal Register on September 7, 2018.

On April 16, 2020, the Bureau issued a final rule to increase

the coverage threshold related to closed-end mortgage loan

activity, among other changes (2020 HMDA Rule). The 2020

HMDA Rule was published in the Federal Register on M ay

12, 2020.

Effective July 1, 2020, the origination threshold for

coverage with resp ect to closed-end mortgage loans increased

from at least 25 originations to at least 100 originations in each

of the preceding two calendar years.

The Federal supervisory agencies use HMDA data to support a

variety of activities.

For example, some Federal supervisory

agencies use HM DA data as p art of their fair lending

examination process, and other agencies use HM DA data in

conducting Community Reinvestment Act (CRA) performance

evaluations.

Moreover, HM DA disclosures provide the

public with information on the home mortgage lending

activities of particular reporting entities and on activity in their

communities. These disclosures are used by local, State, and

Federal officials to evaluate housing trends and issues and by

community organizations to monitor financial institution

lending patterns. Because HMDA data serve numerous

important purposes, validating the accuracy of HM DA data is

a key element of the Federal sup ervisory agencies’

examination activities.

Coverage

A. Institutional Coverage

Institutional Coverage Generally

An institution is required to comply with Regulation C only if

it is a financial institution as that term is defined in Regulation

C. The definition of financial institution includes both

depository financial institutions and nondepository financial

institutions, as those terms are separately defined in

Regulation C. 12 CFR 1003.2(g).

An institution uses these two definitions, which are outlined

below, as coverage tests to determine whether it is a financial

institution that is required to comply with Regulation C. For

the purpose of these examination procedures, the term

financial institution refers to an institution that is either a

depository financial institution or a nondepository financial

institution that is subject to Regulation C.

____________________

83 Fed. Reg. 45325 (Sept. 7, 2018).

85 Fed. Reg. 28364 (May 12, 2020).

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:

1. Asset-S ize Threshold. On the preceding December 31,

the bank, savings association, or credit union had assets in

excess of the asset-size threshold published annually in

the Federal Register, as included in the Official

Interpretations, 12 CFR Part 1003, Comment 2(g)-2, and

posted on the Bureau’s website. 12 CFR 1003.2(g)(1)(i).

The phrase “preceding December 31” refers to the

December 31 immediately p receding the current calendar

year. For example, in 2019, the preceding December 31

is December 31, 2018. Comment 2(g)-1.

2. Location Test. On the preceding December 31, the bank,

savings association, or credit union had a home or branch

office located in a metropolitan statistical area (M SA). 12

CFR 1003.2(g)(1)(ii).

For purposes of this location test, a branch office for a

bank, savings association, or credit union is an office: (a)

of the bank, savings association, or credit union (b) that is

considered a branch by the institution’s Federal or State

supervisory agency. For purposes of Regulation C, an

automated teller machine or other free-standing electronic

terminal is not a branch office regardless of whether the

supervisory agency would consider it a branch. 12 CFR

1003.2(c)(1). A branch office of a credit union is any

office where member accounts are established or loans

are made, whether or not a Federal or State agency has

approved the office as a branch. Comment 2(c)(1)-1.

3. Loan-Activity Test. During the preceding calendar year,

the bank, savings association, or 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. 12 CFR 1003.2(g)(1)(iii). For more

information on whether a loan is secured by a dwelling, is

a home purchase loan, or is a refinancing, see 12 CFR

1003.2(f), (j), and (p) and associated commentary.

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

15 USC 1691–1691f, 42 USC 3605, and 12 CFR 1002.

12 USC 2901–2908, and 12 CFR 25, 195, 228, and 345.

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FDIC Consumer Compliance Examination Manual — Jul y 2021 V–9.3

Federal National M ortgage Association (Fannie M ae)

or the Federal Home Loan Mortgage Corporation

(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

closed-end mortgage loan or the open-end line of credit

loan-volume threshold in each of the two preceding

calendar y ears.

• 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

500 open-end lines of credit in each of the two preceding

calendar y ears meets or exceeds the loan-volume

threshold.

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

mortgage loans, open-end lines of credit, and these excluded

transactions are discussed below in T

RANSACTIONAL

COVERAGE.

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 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 T

RANSACTIONS

INVOLVING M ULTIPLE ENTITIE S.

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).

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:

1. Location Test. The institution had a home or branch

office in a metropolitan statistical area (MSA) on the

preceding December 31. 12 CFR 1003.2(g)(2)(i). The

phrase “preceding December 31” refers to the December

31 immediately preceding the current calendar year. For

example, in 2019, the p receding December 31 is

December 31, 2018. Comment 2(g)-1.

For purposes of this location test, a branch office of a

nondepository financial institution is any one of the

institution’s offices at which the institution takes from the

public ap plications for covered loans. A nondepository

financial institution is also deemed to have a branch office

in an MSA or metropolitan division (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 M SA or M D, even if it

does not have an office in that M SA. 12 CFR

1003.2(c)(2). Covered loans and applications for covered

loans are discussed below in T

RANSACTIONAL COVERAGE.

2. Loan-Volume Thresholds. The institution meets or

exceeds either the closed-end mortgage loan threshold or

the op en-end line of credit threshold in each of the two

preceding calendar y ears.

• An institution that 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 y ears meets or

exceeds the loan-volume threshold.

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 T

RANSACTIONAL COVERAGE.

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 sp ecific closed-end 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

RANSACTIONS WITH M ULTIPLE ENTITIE S.

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)–(12).

B. Exemptions Based on S tate Law

Regulation C provides that financial institutions may apply for

an exemption from coverage. Specifically , the Bureau may

exempt a State-chartered or State-licensed financial institution

if the Bureau determines that the financial institution is subject

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to a State disclosure law that contains requirements

substantially similar to those imposed by Regulation C and

adequate enforcement provisions. Any State-licensed 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 exemp tion must comp ly 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).

C. Transaction Coverage

A financial institution is required to collect, record, and report

information only for transactions that are subject to Regulation

Covered Loans

A covered loan can be either a closed-end mortgage loan or an

open-end line of credit, but an excluded transaction cannot be

a covered loan. 12 CFR 1003.2(e).

To determine if a transaction is subject to Regulation C, a

financial institution should first determine whether the loan or

line of credit involved in the transaction is either a closed-end

mort gage loan or an open-end line of credit. See C

LOSED-END

MORTGAGE LOANS AND OPEN-END LINES OF CREDIT, below.

If the loan or line of credit is neither a closed-end mortgage

loan nor an open-end line of credit, the transaction does not

involve a covered loan, and the financial institution is not

required to report information related to the transaction. If the

loan or line of credit is either a closed-end mortgage loan or an

open-end line of credit, the financial institution must

determine if the closed-end mortgage loan or open-end line of

credit is an excluded transaction. See E

XCLUDED

TRANSACTIONS, below. If the closed-end mortgage loan or the

open-end line of credit is an excluded transaction, it is not a

covered loan, and the financial institution is not required to

report information related to 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

REPORTABLE ACTIVITY, below.

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

____________________

It is important to note that Regulation C, comments 2(d)-2 and 2(o)-2,

defines the phrase “ extension of credit” differently than Regulation B, 12

CFR Part 1002.2(q).

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 contemp lates rep eated

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).

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 rep eated 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 rep aid.

A business-p urp ose 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)-

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 sep arate

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., closed-end 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.

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Regulation C provides two narrow exceptions to the

requirement that an “extension of credit” involve a new debt

obligation. The exceptions are designed to cap ture

transactions that are substantially similar to new debt

obligations and should be treated as such.

First, assumptions are extensions of credit under Regulation C.

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. Regulation C clarifies that

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 even if the

new borrower merely assumes the existing debt obligation and

no new debt obligation is created. Comment 2(d)-2.i.

Second, Regulation C provides that transactions completed

pursuant to a New York State consolidation, extension, and

modification agreement (New York CEMA) and classified as

a sup plemental mortgage under New York Tax Law Section

255, such that the borrower owes reduced or no mortgage

recording taxes, is an extension of credit. However, the

regulation also provides that certain transactions providing

new funds that are consolidated into a New York CEMA are

excluded from the HM DA reporting requirements. Comment

2(d)-2.ii; 12 CFR 1003.3(c)(13).

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:

1. Princip al residences;

2. Second homes and vacation homes;

3. Investment properties;

4. Residential structures whether or not attached to real

property;

5. Detached residential structures;

6. Individual condominium and cooperative units;

7. Manufactured homes 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. It also includes a multifamily dwelling, which is a

dwelling that includes five or more individual dwelling units.

A multifamily dwelling includes a manufactured home

community.

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 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. 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.

The following are not dwellings:

1. Recreational vehicles, such as boats, camp ers, travel

trailers, or park model recreational vehicles;

2. Houseboats, floating homes, or mobile homes constructed

before June 15, 1976;

3. Transitory residences, such as hotels, hospitals, college

dormitories, or recreational vehicle parks; and

4. Structures originally designed as a dwelling but used

exclusively for commercial purposes, such as a home

converted to a daycare facility or professional office.

Comment 2(f)-3.

A property that is used for both residential and commercial

purposes, such as a building that has apartment and retail

units, is a dwelling if the property’s primary use is residential.

Comment 2(f)-4.

A property used for both long-term housing and to provide

assisted living or supportive housing services is a dwelling.

However, transitory residences used to provide such services

are not dwellings. Properties used to provide medical care,

such as skilled nursing, rehabilitation, or long-term medical

care, are not dwellings. If a property is used for long-term

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housing, to provide related services (such as assisted living),

and to provide medical care, the prop erty is a dwelling if its

primary use is residential. Comment 2(f)-5.

A financial institution may use any reasonable standard to

determine a property’s primary use, such as square footage,

income generated, or number of beds or units allocated for

each use. It may select the standard on a case-by-case basis.

Comments 2(f)-4 and -5.

D. Excluded Transactions

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.

The following are excluded transactions:

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

that a financial institution originates or purchases in a

fiduciary cap acity , 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).

2. 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. Regulation C

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

app lication 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.

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

that is temporary financing. 12 CFR 1003.3(c)(3). A

transaction is excluded as temporary financing if it is

designed to be rep laced by sep arate 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). In addition, a

____________________

A dwelling also includes a multifamily residential structure or community

such as an apartment, condominium, cooperative building or complex, or a

manufactured home community. A loan related to a manufactured home

community is secured by a dwelling for purposes of § 1003.2(f) even if it is

construction-only loan or line of credit is considered

temporary financing and excluded under Regulation C if

the loan or line of credit is extended to a person

exclusively to construct a dwelling for sale. Comments

3(c)(3)-1 and -2.

4. The purchase of an interest in a pool of closed-end

mortgage loans or open-end lines of credit, such as

mort gage-p articip ation certificates, mortgage-backed

securities, or real estate mortgage investment conduits.

12 CFR 1003.3(c)(4); comment 3(c)(4)-1.

5. The purchase solely of the right to service closed-end

mortgage loans or open-end lines of credit. 12 CFR

1003.3(c)(5).

6. The p urchase 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

Regulation C, see comments 2(g)-3 and -4.

7. A closed-end mortgage loan or an open-end line of credit,

or an app lication for a closed-end mortgage loan or open-

end line of credit, for which the total dollar amount is less

than $500. 12 CFR 1003.3(c)(7).

8. The p urchase of a p artial 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.

9. 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.

Regulation C 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.

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

that is or will be made primarily for business or

not secured by any individual manufactured homes, but only by the land that

constitutes the manufactured home community including sites for

manufactured homes. Comment 2(f)(2).

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FDIC Consumer Compliance Examination Manual — Jul y 2021 V–9.7

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 12 CFR 1003.2(f), (i), (j), and (p)

and the associated commentary .

Regulation C 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 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 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. 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 originates 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.

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

app lications 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). Regulation B permits a financial

____________________

Amendments to Equal Credit Opportunity Act (Regulation B) Ethnicity and

Race Information Collection. 82 Fed. Reg. 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).

institution to collect information regarding the ethnicity,

race, and sex of an ap plicant for a closed-end mortgage

loan that is an excluded transaction under 12 CFR

1003.3(c)(11), if the financial institution submits HM DA

data concerning such closed-end mortgage loans and

applications or if it submitted such HM DA data for any of

the preceding five calendar y ears.

12. An open-end line of credit if the number of open-end

lines of credit that the financial institution originated in

either of the two p receding calendar years does not meet

or exceed the applicable threshold. 12 CFR

1003.3(c)(12); comment 3(c)(12)-1. A financial

institution is not required to collect, record, or report

open-end lines of credit if it originated fewer than 500 of

them in either of the two preceding calendar years.

However, the financial institution will still be required to

collect and report information regarding closed-end

mortgage loans if it originated at least 100 of them in each

of the two preceding calendar years. Comment 3(c)(12)-

1. For more information on how to determine if a

financial institution “originated” a particular line of credit

when multiple entities are involved in the transaction, see

comments 4(a)-2 through -4.

A financial institution may report applications for,

originations of, or purchases of open-end lines of credit

that are excluded transactions under 12 CFR

1003.3(c)(12). However, a financial institution that

chooses to report such excluded applications,

originations, or purchases must report all app lications for

otherwise covered open-end lines of credit that it receives,

all otherwise covered open-end lines of credit it

originates, and all otherwise covered open-end lines of

credit it purchases that would otherwise be covered loans

for a given calendar year. 12 CFR 1003.3(c)(12);

comment 3(c)(12)-2. Regulation B permits a financial

institution to collect information regarding the ethnicity,

race, and sex of an applicant for an open-end line of credit

that is an excluded transaction under 12 CFR

1003.3(c)(12), if it submits HM DA data concerning such

open-end lines of credit and applications or if it submitted

such HMDA data for any of the preceding five calendar

years.

13. A transaction that provided (or, in the case of an

app lication, p roposed to provide) new funds to the

borrower in advance of being consolidated in a New York

CEM A classified as a sup plemental mortgage under New

York Tax Law Section 255. However, the transaction is

excluded only if final action on the consolidation was

October 2017 Regulation B Amendments.

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V–9.8 FDIC Consumer Compliance Examination Manual — July 2021

taken in the same calendar y ear 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)-

New funds provided in advance of being consolidated

into a New York CEM A classified as a supp lemental

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.

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

PPLICATIONS and ORIGINATIONS AND PURCHASES OF

COVERED LOANS, below. There are sp ecial rules that ap p ly if

multiple entities are involved in the transaction. These special

rules are discussed in T

RANSACTION INVOLVING M ULTIPLE

ENTITIE S, below. There are also partial exemptions for which

the financial institution would not be required to collect,

record, or report certain data points for the transaction that

qualifies for the partial exemption. These partial exemptions

are discussed below in P

ARTIAL EXEMPTIONS.

A. 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).

This definition of application is similar to the Regulation B

definition, except that prequalification requests are not

applications under Regulation C. Interpretations that appear in

the official commentary to Regulation B are generally

applicable to the definition of application under Regulation C,

except for those interpretations that include a prequalification

request within the definition of application. Comment 2(b)-1.

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

A preapproval request is an application under Regulation C if

the request is:

1. For a home purchase loan;

2. Not secured by a multifamily dwelling;

3. Not for an open-end line of credit or for a reverse

mortgage; 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 Regulation C 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

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

app lication include requiring an acceptable title insurance

binder or a certificate indicating clear termite inspection

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FDIC Consumer Compliance Examination Manual — Jul y 2021 V–9.9

and, if the applicant plans to use the proceeds from the

sale of the ap p licant’s p resent home to purchase a new

home, a settlement statement showing adequate p roceeds

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.

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), 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

RANSACTIONS INVOLVING M ULTIPLE EN TITIE S, below.

Although requests under preapproval programs are

app lications, 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 HM DA

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.

B. 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 T

RANSACTIONS INVOLVING

MULTIPLE EN TITIE S, below.

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 y ear 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.

C. 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.

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. See comment 4(a)-

In the case of an application that did not result in an

origination, a financial institution reports the action it took on

that ap plication if it made a credit decision on the app lication

or was reviewing the app lication when the ap p lication was

withdrawn or closed for incompleteness. 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.

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V–9.10 FDIC Consumer Compliance Examination Manual — July 2021

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.

D. Partial Exemptions

The 2018 Act created p artial exemp tions from some of the

2015 HMDA Rule’s requirements for certain financial

institutions. 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 p artial exemp tions were

effective M ay 24, 2018, and apply to the collection, recording,

and reporting of HM DA data on or after that date. A list of the

data points covered by the partial exemptions is provided

below. See A Guide to HM DA Reporting: Getting It Right!

Appendix G for a list of both the partially exempt data fields

and data points.

As discussed below, only a financial institution that is an

insured credit union or an insured depository institution is

eligible for the partial exemptions. Additionally, as explained

below, in order to be eligible for the partial exemptions, an

insured depository institution must not have received certain

ratings in its most recent performance evaluations under the

Community Reinvestment Act (CRA).

As discussed below, each of the partial exemp tions ap plies

only to certain covered loans and applications and only if an

app licable loan-volume threshold is met. An insured

depository institution or insured credit union: (1) must meet

the ap plicable loan-volume threshold for closed-end mortgage

loans in order for a partial exemption to apply to its closed-end

mortgage loan transactions; and (2) must meet the applicable

loan-volume threshold for open-end lines of credit in order for

a p artial exemp tion to app ly to its op en-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 specific data points

specified in 12 CFR 1003.4(a)(1)–(38), but is exempt from

collecting, recording, and reporting 26 other specific data

points for that transaction. Additionally, the financial

institution may voluntarily report any or all of these remaining

26 data points for a covered loan or application covered by a

partial exemp tion. C

OLLECTING, RECORDING, AND REPORTING

FOR

TRANSACTIONS COVERED BY A PARTIAL EXEMP TION,

____________________

Partial Exemptions from the Requirements of the Home Mortgage Disclosure

Act Under the Economic Growth, Regulatory Relief, and Consumer

Protection Act (Regulation C), 83 Fed. Reg. 45325 (Sept. 7, 2018).

below, discusses the scope of the partial exemptions and

includes tables that list both the 22 data points that are

required to be collected, recorded, and reported and the 26

data points that are not required to be collected, recorded, and

reported if a partial exemption applies to a covered loan or

app lication.

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.

Additionally, a financial institution that satisfies the definition

of “insured depository institution” must not have received a

less than satisfactory rating in its most recent CRA

performance evaluations 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 “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;

2. A rating of “substantial noncompliance in meeting

community credit needs” on its most recent examination

under Section 807(b)(2) of the CRA.

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 y ear.

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

OAN-VOLUME THRESHOLDS, below. Similarly, an insured

depository institution that does not satisfy the criteria

regarding CRA examination history cannot rely on either of

the p artial exemp tions.

Loan-Volume Threshol ds

In order for a partial exemption to apply to an application or

covered loan (including a purchased covered loan), an eligible

financial institution must also meet the ap plicable loan-volume

threshold.

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FDIC Consumer Compliance Examination Manual — Jul y 2021 V–9.11

A p artial exemption app lies to an eligible financial

institution’s applications for, originations of, and purchases of

closed-end mortgage loans if the institution originated fewer

than 500 closed-end mortgage loans in each of the two

preceding calendar years. When a financial institution

determines whether it meets the loan-volume thresholds for a

partial exemption, it does not count transactions excluded by

12 CFR 1003.3(c)(1) through (10) and (13).

A p artial exemption app lies 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, 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 open-end lines of

credit during either of the two preceding calendar years. This

is because op en-end lines of credit are excluded transactions

for a financial institution that originated fewer than 500 open-

end lines of credit during either of the two p receding calendar

years. See the discussion regarding excluded transactions in

RANSACTIONAL COVERAGE, above.

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 or

both partial exemptions.

Collecting, Recording, and Reporting for Transactions

Covered by a Partial Exemption

If a p artial exemp tion ap plies to a covered loan or application

(as discussed above), the financial institution is not required to

collect, record, and report some of the data points that the

2015 HMDA Rule would otherwise require the institution to

collect, record, and report for that transaction. More

specifically , if a p artial exemp tion ap plies 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 immediately below.

Data Points Eligible Financial Institutions Need Not

Collect or Report under the 2018 HMDA Rule for

Transactions Covered by a Partial Exemption

• Universal Loan Identifier (ULI) (1003.4(a)(1)(i))

• Application Channel (1003.4(a)(33))

• Loan Term (1003.4(a)(25))

• Reasons for Denial (1003.4(a)(16)

• Property Address (1003.4(a)(9)(i))

____________________

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.

• 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))

A financial institution may opt to collect, record, and report

one or more of these 26 data points for a covered loan or

app lication that is covered by a partial exemption.

Seven of these 26 data points (i.e., property address, credit

score, reasons for 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.

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.

If a covered loan or application is covered by a partial

exemption, a financial institution must collect, record, and

Financial institutions supervised by the OCC 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.

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V–9.12 FDIC Consumer Compliance Examination Manual — July 2021

report 22 data points for the covered loan or application.

These 22 data points are set forth below.

Data Points that Must Be Collected and Reported under

the 2018 HMDA Rule for Covered Loans and Applications

Covered by a Partial Exemption

• 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 M ethod (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))

Because the p artial exemp tions do not affect these 22 data

points, financial institutions must continue to collect, record,

and report these 22 data points for covered loans and

applications in the manner specified in the 2015 HM DA Rule,

as amended and clarified by the 2017 HM DA Rule. As

discussed above, 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 open-end lines of

credit during either of the two preceding calendar years. See

the discussion regarding excluded transactions in

RANSACTIONAL COVERAGE, above.

For more information on reporting data points if a covered

loan or application is covered by a partial exemption, see the

____________________

Each data point may correspond to more than one field reported on the

HMDA LAR. Accordingly 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 CFR 1003.4(a)(10)(i); Appendix B to Part 1003.

following COMPILATION OF LOAN DA TA section of these

procedures and the Filing Instructions Guide that incorporates

the 2018 HM DA Rule available at

http://www.consumerfinance.gov/data-research/hmda/for-

filers.

Compilation of Loan Data

Attachment A is a summary of the data points required to be

collected, recorded, and reported beginning in 2018 and

provides information on where to find specific guidance in the

regulation and commentary on what should be included for

each data p oint.

Additional information on the data fields

and codes used in preparing the HMDA LAR is provided in

the HMDA Filing Instructions Guide (FIG) available at

https://ffiec.cfpb.gov/.

Reporting

A. Recording

Regulation C requires a financial institution to record the data

about a covered loan or application on a HM DA LAR within

30 calendar days after the end of the calendar quarter in which

the financial institution takes final action on the covered loan

or application. 12 CFR 1003.4(f). A financial institution is

not required to record all of its HM DA data for a quarter on a

single HM DA LAR. Rather, a financial institution may record

data on a single HMDA LAR or may record data on one or

more HM DA 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 HM DA 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.

B. Reporting

In addition to the required data discussed in 12 CFR 1003.4(a)

and (b), effective January 1, 2019, a financial institution must

include the following when it submits its HM DA data:

1. Its name;

The FIG, available at https://ffiec.cfpb.gov/ contains the file specifications,

edit specifications, and additional resources for filing HMDA data

collected in or after 2018.

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FDIC Consumer Compliance Examination Manual — Jul y 2021 V–9.13

2. The calendar y ear and, effective January 1, 2020, if

app licable, the calendar quarter to which the data relate

(see 12 CFR 1003.5(a)(1)(ii)

for information on

quarterly reporting);

3. The name and contact information for a person who can

be contacted with questions about the submission;

4. The financial institution’s appropriate Federal agency;

5. The total number of entries in the submission;

6. The financial institution’s Federal Taxpayer Identification

Number (TIN); and

7. The financial institution’s Legal Entity Identifier (LEI).

12 CFR 1003.5(a)(3).

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. Comment 5(a)-2. For example, if a

financial institution’s appropriate Federal agency changes in

February 2018, it must identify its new appropriate Federal

agency beginning with its annual submission of 2018 data by

March 1, 2019. Comment 5(a)-5. For a financial institution

required to comply with quarterly reporting requirements (see

12 CFR 1003.5(a)(1)(ii)), the financial institution also must

identify its new appropriate Federal agency in its quarterly

submission beginning with its submission for the quarter of the

change, unless the change occurs during the fourth quarter (in

which case, the financial institution would identify the new

appropriate Federal agency in its annual submission). For

example, if the ap prop riate 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. Comment 5(a)-2.

If a financial institution obtains a new TIN, it must provide the

new TIN in its subsequent data submissions. For example, if

two financial institutions that previously reported HM DA data

merge and the surviving financial institution retained its LEI

but obtained a new TIN, the surviving financial institution

reports the new TIN beginning with its next HMDA data

submission. Comment 5(a)-5.

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

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.

____________________

The quarterly reporting requirement, 12 CFR 1003.5(a)(1)(ii), becomes

effective January 1, 2020.

C. 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 Bureau. 12

CFR 1003.5(a)(5). These procedures do not provide detailed

information about the HM DA submission process or file, data,

and edit specifications. Information about those topics can be

found on the FFIEC’s web p ages available at

https://ffiec.cfpb.gov

and https://www.ffiec.gov/hmda/.

Under Regulation C, a financial institution must submit its

annual HM DA LAR in electronic format to its appropriate

Federal supervisory agency by M arch 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 HM DA 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, p lease see

https://ffiec.cfpb.gov

D. 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

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).

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V–9.14 FDIC Consumer Compliance Examination Manual — July 2021

Disclosure of Data

A. 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 loan-level 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 http ://www.consumerfinance.gov/hmda

. 12 CFR

1003.5(b)(2); comment 5(b)-1. A financial institution’s

disclosure statement may also be obtained from

https://ffiec.cfpb.gov. A financial institution may, but is not

required to, use the sample notice in to satisfy Regulation C’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.

B. Modified HMDA LAR

Upon request from a member of the public, a financial

institution must provide a written notice regarding the

availability of its modified HM DA LAR (the financial

institution’s HM DA LAR, as modified by the Bureau to

protect applicant and borrower privacy). 12 CFR 1003.5(c).

The written notice must clearly convey that the financial

institution’s HM DA 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

. A financial

institution’s HM DA LAR is also available at

https://ffiec.cfpb.gov.

A financial institution may, but is not required to, use the

sample notice in comment 5(c)-2 to the regulation to satisfy

Regulation C’s modified HMDA 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

____________________

The Bureau’s final policy guidance describing the modifications it will make

to protect consumer privacy for data collected in 2018 and reported in 2019

is available at https://www.consumerfinance.gov/about-

us/newsroom/consumer-financial-protection-bureau-announces-policy-

guidance-disclosure-h ome-mortgage-data/.

and the disclosure statement requirement discussed in the

ISCLOSURE STATEMENT section above. 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. 12 CFR 1003.5(d)(1). The notice must be

made available for three years. For example, for data that it

was required to collect in 2018, a financial institution must

make available a notice through calendar year 2021 that its

modified HM DA 2018 LAR is available.

At its discretion, a financial institution may also provide its

HMDA 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 HM DA LAR, a financial institution must comply

with the notice requirement.

C. 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 HM DA 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 comment 5(e)-1 to the

regulation to satisfy this requirement. In any case, the notice

must clearly convey that the financial institution’s HM DA

data are available on the Bureau’s website at

http://www.consumerfinance.gov/hmda

. Comment 5(e)-1.

D. Aggregated Data

The FFIEC will use the annual data submitted pursuant to

Regulation C to make available aggregated data for each M SA

and MD, showing lending patterns by property location, age of

housing stock, and income level, sex, ethnicity, and race. 12

CFR 1003.5(f).

Administrative Enforcement

A violation of Regulation C is subject to administrative

sanctions, including civil money penalties. Comp liance can be

enforced by the Bureau, the U.S. Department of Housing and

Urban Development, the FDIC, the FRB, the National Credit

Union Administration, or the Office of the Comptroller of

Currency.

An error in compiling or recording data for a covered loan or

application is not a violation of HM DA or Regulation C if the

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FDIC Consumer Compliance Examination Manual — Jul y 2021 V–9.15

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. Comment 6(b)-1. 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).

If an institution makes a good-faith effort to record all data

concerning covered transactions fully and accurately within

thirty calendar days after the end of each calendar quarter, and

some data are nevertheless inaccurate or incomplete, the error

or omission is not a violation of HM DA or Regulation C,

provided that the institution corrects or completes the

information prior to submitting the loan/application register to

its regulatory agencies. 12 CFR 1003.6(b)(3).

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V–9.16 FDIC Consumer Compliance Examination Manual — July 2021

WHO MUST REPORT: HMDA INSTITUTIONAL COVERAGE

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FDIC Consumer Compliance Examination Manual — Jul y 2021 V–9.17

HMDA TRANSACTIONAL COVERAGE

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FDIC Consumer Compliance Examination Manual — Jul y 2021 V–9.19

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FDIC Consumer Compliance Examination Manual — Jul y 2021 V–9.21

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V–9.22 FDIC Consumer Compliance Examination Manual — July 2021

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FDIC Consumer Compliance Examination Manual — Jul y 2021 V–9.23

Examination Objectives

1. To determine the accuracy and timeliness of the

financial institution’s HMDA LAR.

2. To determine the financial institution’s compliance with

disclosure requirements.

Examination Procedures

Initial Procedures

A. Institutional Coverage

Determine whether an institution is subject to Regulation C

because it meets the definition of financial institution. 12

CFR 1003.2(g).

Depository Financial Institutions

A depository financial institution is subject to Regulation C

if the requirements of 12 CFR 1003.2(g)(1) are met. If the

institution is a bank, savings association, or credit union,

determine whether it 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

financial institution is required to report mortgage data in

accordance with Regulation C.

1. Asset-Size Threshold Test. Determine whether, on the

preceding December 31, the institution had assets in

excess of the asset-size threshold published annually in

the Federal Register, as included in the Official

Interpretations, 12 CFR Part 1003, comment 2(g)-2. 12

CFR 1003.2(g)(1)(i).

2. Location Test. Determine whether, on the preceding

December 31, the institution had a home or branch

office located in an MSA. 12 CFR 1003.2(g)(1)(ii).

3. Loan Activity Test. Determine whether the institution

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. 12 CFR 1003.2(g)(1)(iii).

4. Federally Related Test. Determine whether the

institution meets one of following criteria:

a. The institution is federally insured or federally

regulated.

____________________

These procedures are substantially similar to those adopted as interagency

examination procedures in 2019. See FIL-16-2019

, FFIEC A Guide to

HMDA Reporting: Getting It Right! for 2019 HMDA Data and Updated

HMDA Examination Procedures. Revisions have been made to reflect

amendments to Regulation C through a final rule that the Consumer

Financial Protection Bureau published in 2020. See 85 Fed. Reg. 28364

(May 12, 2020).

(12 CFR 1003.2(g)(1)(iv)(A)); or

b. The institution 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 supp lemented by a Federal agency

or (ii) was intended for sale to Fannie Mae or

Freddie Mac (12 CFR 1003.2(g)(1)(iv)(B)).

5. Loan-Volume Threshold Test. Determine whether the

institution originated at least100 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. Determine whether

transactions are appropriately excluded from coverage

by Regulation C according to criteria in 12 CFR

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.

Nondepository Financial Institutions

A nondepository financial institution is subject to Regulation

C if the requirements of 12 CFR 1003.2(g)(2) are met. If the

institution is a nondepository financial institution other than

a bank, savings association, or credit union, determine

whether it meets the Location Test and the Loan-Volume

Threshold Test described below. If both tests are satisfied,

then the financial institution is required to report mortgage

data in accordance with Regulation C.

1. Location Test. Determine whether the institution had a

home or branch office in an M SA on the preceding

December 31. 12 CFR 1003.2(g)(2)(i).

2. Loan-Volume Threshold Test. Determine whether the

institution 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. Determine whether

any transactions are appropriately excluded from

coverage by Regulation C according to criteria in 12

CFR 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.

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V–9.24 FDIC Consumer Compliance Examination Manual — July 2021

Merger or Acquisition Activity

If recent merger or acquisition activity has occurred,

determine whether the surviving or newly formed institution

meets the definition of financial institution in 12 CFR

1003.2(g). After a merger or acquisition, the surviving or

newly formed institution is a financial institution according

to 12 CFR 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 12 CFR

1003.2(g). For examples of institutional coverage by

Regulation C after merger or acquisition activity, please see

Official Interpretations, Supplement I to 12 CFR Part 1003,

comment 2(g)-3.

B. Transactional Coverage

Determine whether a transaction is subject to Regulation C

because it:

(1) meets the definition of a covered loan as defined in

12 CFR 1003.2(e), and

(2) is not an excluded transaction as defined in 12 CFR

1003.3(c)(1)–(13).

Covered Loans

Institutions that meet the definition of financial institution

according to 12 CFR 1003.2(g) must report data on

transactions that meet the definition of a covered loan in 12

CFR 1003.2(e). Types of transactions enumerated in 12

CFR 1003.3(c)(1)–(13) are explicitly excluded from

Regulation C reporting requirements.

1. Covered Loan. Determine whether the transaction

meets the definition of covered loan according to 12

CFR 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.

a. Determine whether the transaction is a closed-end

mortgage loan as defined in 12 CFR 1003.2(d). A

closed-end mortgage loan is:

i. An extension of credit;

ii. Secured by a lien on a dwelling; and

iii. Is not an open-end line of credit, as defined by

12 CFR 1003.2(o).

b. Determine whether the transaction is an open-end

line of credit as defined in 12 CFR 1003.2(o). An

open-end line of credit is:

i. An extension of credit;

ii. Secured by a lien on a dwelling; and

iii. 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 12 CFR

1026.2(a)(12), is extended by a creditor as

defined in 12 CFR 1026.2(a)(17), or is

extended to a consumer as defined in 12 CFR

1026.2(a)(11).

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.

3. Excluded Transactions. Determine whether the typ e

of transaction is listed as an excluded transaction in 12

CFR 1003.3(c). The following transactions are not

required to be reported under Regulation C:

a. A closed-end mortgage loan or open-end line of

credit originated or purchased by a financial

institution acting in a fiduciary capacity (12 CFR

1003.3(c)(1));

b. A closed-end mortgage loan or open-end line of

credit secured by a lien on unimproved land (12

CFR 1003.3(c)(2));

c. Temporary financing (12 CFR 1003.3(c)(3));

d. The purchase of an interest in a pool of closed-end

mortgage loans or open-end lines of credit (12 CFR

1003.3(c)(4));

e. The purchase solely of the right to service closed-

end mortgage loans or open-end lines of credit (12

CFR 1003.3(c)(5));

f. 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

12 CFR 1003.2(c) (12 CFR 1003.3(c)(6));

g. 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

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FDIC Consumer Compliance Examination Manual — Jul y 2021 V–9.25

dollar amount is less than $500 (12 CFR

1003.3(c)(7));

h. The p urchase of a p artial interest in a closed-end

mortgage loan or open-end line of credit (12 CFR

1003.3(c)(8));

i. A closed-end mortgage loan or open-end line of

credit that is or will be used primarily for

agricultural purposes (12 CFR 1003.3(c)(9));

j. 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 12 CFR 1003.2(i), a

home purchase loan under 12 CFR 1003.2(j), or a

refinancing under 12 CFR 1003.2(p) (12 CFR

1003.3(c)(10));

k. Exclusions based on a financial institution’s loan-

volume:

i. An institution that originated fewer than 100

closed-end mortgage loans in either of the two

proceeding calendar years is not required to

report closed-end mortgage loans (12 CFR

1003.3(c)(11)).

ii. An institution that originated fewer than 500

open-end lines of credit in either of the two

preceding calendar years is not required to

report open-end lines of credit, (12 CFR

1003.3(c)(12)).

l. 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 CEM A) classified as a supp lemental

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. (12 CFR 1003.3(c)(13)).

Disclosure and Reporting – 12 CFR 1003.5

• Determine whether the financial institution satisfies

requirements related to disclosure and reporting:

a. Reporting to agency. Determine whether the

financial institution submits its HM DA LAR to the

appropriate Federal agency no later than M arch 1

following the calendar year for which the data are

compiled. 12 CFR 1003.5(a)(1)(i).

b. HMDA LAR re te nti on. Determine whether the

financial institution retained a copy of its submitted

annual HM DA LAR for at least three years. 12

CFR 1003.5(a)(1)(i).

c. Disclosure statement. Determine whether no later

than three business days after the financial

institution receives notice from the FFIEC that the

financial institution’s disclosure statement is

available the financial institution makes available to

the public upon request at its home office, and each

branch office physically located in each MSA and

each M D, a written notice that clearly convey s that

the financial institution’s disclosure statement may

be obtained on the Bureau’s website at

www.consumerfinance.gov/hmda. 12 CFR

1003.5(b)(2). A financial institution’s disclosure

statement may also be obtained from

https://ffiec.cfpb.gov.

d. Modifi ed HMDA LAR. Determine whether the

financial institution makes available to the public

upon request at its home office, and each branch

office phy sically located in each M SA and each

M D, a written notice that clearly convey s that the

financial institution’s HMDA LAR, as modified by

the Bureau to protect applicant and borrower

privacy, may be obtained on the Bureau’s website

www.consumerfinance.gov/hmda. 12 CFR

1003.5(c). A financial institution’s modified

HMDA LAR may also be obtained from

https://ffiec.cfpb.gov.

e. Posted notice of availability of data. Determine

whether the financial institution 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 M SA and each M D. This

notice must clearly convey that the financial

institution’s HM DA data is available on the

Bureau’s website at

www.consumerfinance.gov/hmda. 12 CFR

1003.5(e). A financial institution’s HM DA data is

also available at https://ffiec.cfpb.gov.

If the financial institution is a bank or savings association

and has a subsidiary covered by HMDA, determine whether

the subsidiary completed a sep arate HM DA LAR and either

submitted it directly or through its parent to the approp riate

Federal agency for the parent. For this purpose, a financial

institution is a subsidiary of a bank or savings association if

the bank or savings association holds or controls an

ownership interest of greater than 50 percent in the financial

institution. (12 CFR 1003.5(a)(2), comment 5(a)-6).

FFIEC HMDA Examiner Trans action Testing

Guidelines

1. To conduct HM DA transaction testing, examiners select

a random sample of entries from the financial

institution’s HM DA LAR (Total Sample) and ask the

financial institution to provide the loan or application

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V–9.26 FDIC Consumer Compliance Examination Manual — July 2021

files (loan files) that correspond to the HM DA LAR

sample entries. The size of the Total Sample will

depend on the size of the financial institution’s HM DA

LAR, as shown in column A of the “HMDA Transaction

Testing Sample Sizes and Thresholds” table (HM DA

table) on p age 27.

2. If a financial institution’s HMDA data are collected

through multiple data collection and reporting systems,

examiners may test a single samp le from the financial

institution’s entire HM DA LAR, test separate samples

from each sy stem, or test samp les from selected systems

chosen based on risk.

If examiners do not take a single

sample from the entire HM DA LAR, they should

document in their work papers from which system(s)

they chose the sample(s) and why.

3. Once examiners receive the loan files from the financial

institution, they should verify the accuracy of the data in

the entries in the HM DA LAR samp le(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 financial institution may

provide. Differences that are not adequately exp lained

should be identified as errors.

4. All data fields within the sample may be reviewed, or

the supervisory agency may prioritize designated fields

for review.

5. 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

financial institution’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 HM DA 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 Samp le

Threshold in column C of the HM DA 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 Samp le data

fields reviewed and found to have no errors in Stage 1.

6. 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 HM DA table, examiners should direct

the financial institution to correct any such data field in

its full HMDA LAR and resubmit its HMDA LAR with

the corrected data field(s).

7. A financial institution 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

HM DA table, if examiners have a reasonable basis to

believe that errors in that field or fields will likely make

analysis of the HM DA data unreliable. To illustrate,

assume examiners discover that a financial institution

has incorrectly coded withdrawn applications as denials

to such an extent that it likely prevents reliable analy sis

of underwriting disparities in a fair lending examination.

Examiners may direct a financial institution to correct

the Action Taken data field and resubmit the HM DA

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 HM DA

table.

8. A financial institution may be directed to resubmit its

HMDA LAR in order to include reportable applications

or loans that examiners determined were previously

omitted from the HM DA LAR.

Tolerances

9. 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 HM DA table, examiners should not count the

following differences between data in the HM DA LAR

and in the loan files as errors:

• Three calendar day s or less in the date the

application was received or the date shown on the

application form reported pursuant to 12 CFR

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 12 CFR

1003.4(a)(7);

• Three calendar days or less in the date of the action

taken by the financial institution reported pursuant

to 12 CFR 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 12 CFR 1003.4(a)(10)(iii).

To illustrate, if a loan file indicates June 4 as the

app lication date, a HM DA LAR ap p lication date of June

1 or June 7 would not be counted as an error because it

is within three calendar days of June 4, but a HM DA

V. Lending — HMDA

FDIC Consumer Compliance Examination Manual — Jul y 2021 V–9.27

LAR application date of M ay 31 or June 8 would be

counted as an error because it is more than three

calendar days from June 4.

Ethnicity or Race Data Errors

10. For purposes of these guidelines, the term “data field”

generally refers to individual HM DA Filing Instructions

Guide (FIG) fields, each identified by a distinct Data

Field Number and Data Field Name. With resp ect to

information on the ethnicity or race of an applicant or

borrower, or co-app licant 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-app licant’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-app licant’s or co-borrower’s

race (FIG Data Field Numbers 41-48).

To illustrate, for an applicant who indicates “Hispanic

or Latino” and “M exican” in response to the question of

ethnicity, a financial institution reports the information

in two FIG fields, for example, Ethnicity of Applicant or

Borrower: 1 (1: Hispanic or Latino) and Ethnicity of

Applicant or Borrower: 2 (11: Mexican). If one or more

of the six Ethnicity of Applicant or Borrower FIG fields

have errors, they would count as one (and only one)

error for that data field group. If the Ethnicity of

App licant or Borrower data field group has errors in the

Total Sample that meet or exceed the Resubmission

Threshold in column D of the HMDA table, examiners

should direct the financial institution to correct the six

Ethnicity of Applicant or Borrower FIG fields and

resubmit its HM DA LAR with those FIG fields

corrected. See examp le 4 in the HMDA

TRANSACTION

TESTING SAMPLE SIZES AND THRESHOLDS section

below.

Prospective Changes

11. Examiners may direct the financial institution to make

any appropriate changes in its policies, procedures, audit

processes, or other aspects of its compliance

management system needed to p revent 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

Total

Sample size

Initial S ample size

Initial Sample

Threshold

Resubmission Threshold

25–50

30*

10.0*

51–100

10.0

101–130

6.4

131–190

5.4

191–500

5.1

501–100,000

5.1

100,001+

159

2.5

*For financial institutions with fewer than 30 HM DA LAR lines, the full sample size is the financial institution’s total number of

HMDA LAR lines. The Resubmission Threshold number remains at 3. Accordingly, the Resubmission Threshold percentage will

____________________

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.

Example 4 describes analogous error rates and corrective actions for the

race field.

V. Lending — HMDA

V–9.28 FDIC Consumer Compliance Examination Manual — July 2021

be higher for financial institutions with fewer than 30 HM DA LAR lines.

Examples

1. Financial Institution A’s HM DA LAR contains 35

entries. Examiners select a Total Sample of 30 loans as

shown in column A of the HM DA table.

• Examiners test the Initial Sample of 15 as shown in

column B of the HM DA 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 HM DA table.

• Therefore, Financial Institution A is directed to

correct the Action Taken data field and resubmit its

HMDA LAR with that field corrected.

2. Financial Institution B’s HM DA LAR contains 125

entries. Examiners select a Total Sample of 47 loans as

shown in column A of the HM DA 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 Financial Institution 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.

3. Financial Institution C’s HM DA LAR contains 500,000

entries. Examiners select a Total Sample of 159 loans as

shown in column A of the HM DA 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 HM DA 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 HM DA table; and four errors in

the Census Tract data field, which equals the

Resubmission Threshold in column D of the

HMDA table.

• Therefore, Financial Institution C is directed to

correct the Action Taken data field, the Loan

Amount data field, and the Census Tract data field

and resubmit its HM DA LAR with those fields

corrected.

4. Financial Institution D’s HM DA LAR contains 1,000

entries. Examiners select a Total Sample of 79 loans as

shown in column A of the HM DA 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 HM DA table.

• Accordingly, the examiners p roceed 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 HM DA table.

• Therefore, Financial Institution 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 HM DA table:

V. Lending — HMDA

FDIC Consumer Compliance Examination Manual — Jul y 2021 V–9.29

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

Data Fields and Data Points Chart

V. Lending — HMDA

V–9.30 FDIC Consumer Compliance Examination Manual — July 2021

FDIC HMDA Validation Ins tructions

A. Purpose of HMDA Validation

The financial regulatory agencies rely on HM DA data

reported by financial institutions to support a variety of

activities. For example, the FDIC uses HM DA data in

conducting fair lending reviews and Community

Reinvestment Act (CRA) performance evaluations for

HMDA reporters. M oreover, HMDA disclosures provide the

public with information on the home mortgage lending

activities of particular reporting entities and on activity in

their communities. These disclosures are used by local,

state, and federal officials to evaluate housing trends and

issues and by community organizations to monitor institution

lending patterns.

Because HM DA data serve numerous important purposes,

validating the accuracy of HM DA data is a key element of

the FDIC’s supervisory activities. In addition, review of an

institution’s HM DA-related comp liance management sy stem

(CMS) helps determine the extent to which an institution’s

policies, procedures, and practices ensure compliance with

HMDA requirements. These HM DA Validation Instructions

(the Instructions) explain FDIC examination instructions for

validating the accuracy and completeness of the institution’s

reported HM DA Loan/Application Register (LAR) and

assessing the strength of an institution’s HM DA-related

CM S.

The Instructions supplement, and do not replace, the

instructions provided in the FFIEC HM DA Examiner

Transaction Testing Guidelines (FFIEC Testing Guidelines).

B. Review of the HMDA-Related CMS

For all HM DA reporters, examination staff will assess the

strength of the financial institution’s HM DA-related CMS,

considering whether it is comprehensive and commensurate

with an institution’s lending activity, size, structure,

complexity, and risk profile.

During the Pre-Examination Planning (PEP) process,

examination staff will obtain information necessary to

determine whether an institution’s policies, procedures, and

practices ensure the following:

1. appropriate collection, recording, and reporting of data

on applications for covered loans that it receives,

covered loans that it originates, and covered loans that it

purchases pursuant to HM DA and Regulation C

requirements; and

2. compliance with HMDA and Regulation C’s disclosure

requirements.

____________________

For purposes of these Instructions, the term “ examination staff” includes

examiners and HMDA Analysts, as applicable given the specific

examination steps being discussed.

Examination staff will conduct this assessment through a

review of HM DA LARs, written policies and procedures,

internal controls, and training materials, as well as

discussions with management. When assessing the strength

of the HM DA-related CMS, examination staff will consider

the factors addressed in the questions below, which focus on

a financial institution’s Board and management oversight

and consumer compliance program.

Board and Management Oversight

During the review of the financial institution’s system for

ensuring compliance with HM DA and Regulation C, obtain

and review copies of policies, procedures, monitoring and/or

audit reviews, and any app licable comp liance management

program materials to determine whether:

1. An institution annually or more frequently if

appropriate, conducts analysis to determine whether it

must collect, record, and report data regarding dwelling-

secured applications and loans (covered transactions)

pursuant to HM DA and Regulation C.

2. An institution conducts analysis to ensure that all

reportable ap p lications and loans are collected and

recorded on the HM DA LAR.

3. An institution has assigned one or more individuals

responsibility for the oversight of HMDA compliance,

including HM DA data collection, recording, and

reporting.

4. An institution has ensured individuals responsible for

HM DA compliance receive access to and appropriate

training on HM DA, Regulation C and its commentary,

all applicable regulatory and statutory changes, the

Filing Instructions Guide, the Guide to HMDA

Reporting: Getting It Right!, and any other relevant

materials.

5. The Board of Directors and management p ossess

sufficient knowledge to ensure oversight of compliance

with HM DA and Regulation C.

6. The Board of Directors and management provide

appropriate resources and oversight regarding ensuring

an institution’s compliance with HM DA and Regulation

7. An institution takes effective corrective action in

response to identified HM DA deficiencies.

8. Management and, if appropriate, the Board of Directors

reviews policies and procedures, monitoring and/or

audit, and compliance reports regarding the institution’s

HMDA data reporting, commensurate with its HM DA

risk profile.

V. Lending — HMDA

FDIC Consumer Compliance Examination Manual — Jul y 2021 V–9.31

Consumer Compliance Program

Evaluate whether the financial institution’s consumer

compliance p rogram—specifically, its policies, procedures,

and internal controls—is adequate to ensure compliance with

HMDA and Regulation C. Consider whether:

9. The individuals responsible for ensuring HM DA

compliance p ossess an adequate level of knowledge

regarding HM DA and Regulation C, including all

applicable statutory and regulatory changes.

10. An institution has developed appropriate policies and

procedures, and revised those policies and procedures as

necessary, to ensure HM DA comp liance.

11. HM DA data are collected at all branches (if app licable),

and, if so, whether relevant branch personnel are

app ropriately trained on HM DA data collection,

recording, and reporting requirements.

12. An institution’s loan officers, including the commercial

loan department, who may handle HM DA-reportable

applications, are informed of collection, recording, and

reporting requirements.

13. An institution has policies and procedures to ensure

continuing HM DA compliance during and after major

changes in an institution’s business or structure.

14. An institution has established internal review

procedures, monitoring, and/or audit schedules,

depending on the circumstances, that comprehensively

cover all pertinent HM DA and Regulation C

requirements, including all applicable statutory and

regulatory changes since prior compliance reviews

and/or audits.

15. An institution conducts compliance reviews and/or

audits, as appropriate, that include a sufficient level of

transactional analy sis as well as written reports that

detail findings and recommendations for corrective

action. Also, determine whether the Board of Directors

and management are informed of these findings and

recommendations.

16. An institution adequately monitors vendors and other

third-party service providers that perform functions or

deliver services related to HM DA data collection,

recording, and reporting.

C. Timing of Transaction Testing

The timing of the HMDA transaction testing is determined

based on the number of reported LAR lines in the most

recent full calendar year. FDIC HM DA reporters are divided

into one of the following two size categories: financial

institutions with 500 or more LAR lines, and financial

institutions with fewer than 500 total LAR lines.

1. Financial institutions with 500 or more total LAR lines:

Examination staff will conduct transaction testing for

accuracy and comp leteness in advance of the on-site

portion of the consumer compliance examination. This

approach allows an institution to resolve data errors, if

any, so the examination can proceed without significant

delay.

2. Financial institutions with fewer than 500 total LAR

lines: Examination staff will conduct transaction testing

for accuracy and completeness during the on-site

portion of the consumer compliance examination, unless

testing in advance of the on-site portion promotes

examination efficiencies and effectiveness. For

example, there may be risk indicators from an

institution’s previous HM DA review(s), such as a

history of significant HM DA-related CM S deficiencies

or Level 2 (M edium Severity) or Level 3 (High

Severity) violations that required corrective actions

related to HM DA. The risk indicators could serve as a

red flag signaling that an extended period of time or

additional resources may be required to conduct HM DA

validation at an institution. Consequently, transaction

testing in advance of the on-site portion of the

examination would promote examination efficiencies

and effectiveness.

D. Notifying Reporters of Upcoming HMDA

Validation

The PEP process details specific timelines and requirements

that provide financial institutions with notice of upcoming

HMDA reviews. Examination staff will follow these

timelines when scheduling and providing notice to financial

institutions about upcoming HMDA reviews. In particular,

examination staff will ensure that the HM DA/CRA

Validation letter is provided to HMDA reporters at the

app ropriate time. For validations completed in advance of

the on-site portion of the consumer compliance examination,

this letter is either sent with or after the Informational Packet

to allow an institution sufficient time to prepare for the data

validation. For validations completed during the on-site

portion of the compliance examination, if applicable, this

information is included in the Entry Letter.

E. S ystemic Errors Identified Prior to Transaction

Testing

Prior to transaction testing, examination staff may determine

an institution’s HM DA policies, procedures, or practices are

likely to produce systemic errors. For example, examination

staff may find that an institution’s written policies reflect a

misunderstanding of Regulation C’s requirements regarding

which business-purpose transactions are covered by HMDA.

In such cases, examination staff will confirm the errors

through discussion with bank management. If examination

staff determines that systemic errors likely will make

analysis of the HM DA data unreliable, examination

transaction testing should not be completed until bank

V. Lending — HMDA

V–9.32 FDIC Consumer Compliance Examination Manual — July 2021

management has ensured that the errors are addressed. Once

the LAR data is corrected, examination staff will complete

transaction testing in accordance with the FFIEC Testing

Guidelines and these Instructions.

F. Scope of Transaction Testing

In general, for each HM DA reporter, FDIC examination staff

initially will review the LAR reported as final for the prior

full calendar year. During or after transaction testing as

provided in these Instructions, examination staff will

investigate the root cause of any errors found, focusing on

data fields for which the number of errors exceeded the

applicable resubmission threshold. (As discussed later in

these Instructions, examination staff prioritizes review of key

data fields but may review additional data fields in specified

circumstances.)

Examination staff will determine through discussions with

bank management if the root cause of the errors that

triggered resubmission in the LAR reviewed would imp act

LARs previously submitted for earlier years. If the root

cause of errors in each such data field is systemic across

prior years, examination staff may request that bank

management correct and resubmit additional years’ LARs, as

appropriate, without additional transaction testing. However,

if examination staff determines that the root cause of

systemic errors in the prior year’s LAR did not impact LARs

from earlier years for any such data field, examination staff

may determine that testing LARs from additional years is

unnecessary.

If the root cause of errors in one or more of the data fields for

which resubmission is triggered does not appear to be

systemic, or if examination staff is unable to determine the

root cause of the errors in any such data field, examination

staff will determine whether it is necessary to test additional

years’ LARs. Examination staff will make this

determination in consultation with FDIC field territory

management.

G. Sampling Multiple Data Collection and

Reporting S ystems

Paragraph 1 of the FFIEC Testing Guidelines discusses

selection of a random sample of entries from a financial

institution’s LAR. Paragraph 2 of the FFIEC Testing

Guidelines discusses alternative methods for sampling

HMDA data collected through multiple data collection

and reporting systems. FDIC examination s taff will

conduct transaction testing by selecting a sample of

entries from the entire reported LAR, even if an

institution aggregates reportable covered loan application

data from multiple data collection systems or departments

to create the final reported LAR.

H. Validating Designated Key HMDA Data Fields

Paragraph 4 of the FFIEC Testing Guidelines states that all

data fields within the samp le may be reviewed or a

supervisory agency may prioritize designated data fields for

review. For the purpose of evaluating financial institutions’

compliance with HMDA requirements, FDIC examination

staff will focus primary attention on Designated HMDA Key

Data Fields (key data fields). Specifically, during the

validation process, FDIC examination staff generally will

review the key data fields rather than all 110 data fields.

Data Voluntarily Reported When a Partial Exemption

Applies

An insured depository institution (IDI) eligible for a partial

exemption from HM DA reporting may report an exemption

code for data fields associated with exempt data points or

may report such data fields voluntarily. If an IDI is eligible

for a partial exemption with respect to a particular data point,

examination staff will validate data fields associated with

that data point as part of the HMDA data validation process

but will not require resubmission of, or cite a violation in

connection with, those data fields.

Transaction Testing of Non-key Data Fields

In certain limited circumstances specified in these

Instructions and consistent with the FFIEC Testing

Guidelines, examination staff may determine it is necessary

to review additional HM DA data fields, as appropriate.

FDIC examination staff will transaction test non-key data

fields only under one of two circumstances. The first

circumstance is where data from non-key fields is needed to

complete an aspect of the consumer compliance examination

that considers HM DA data, such as a fair lending review or

CRA performance evaluation. The second circumstance is

where data from non-key fields are needed to determine the

root cause of an error in a key data field. Examination staff

will consult with field territory management when making

this determination.

Examp les of these two circumstances where examination

staff may seek to review data from non-key data fields

include the following situations:

1. Fair lending review–The fair lending review established

a focal point and non-key data field(s) are needed for the

analysis. Transaction testing of non-key data fields

under this exception is limited to those fields needed to

evaluate an identified fair lending focal point.

Examination staff will validate any needed non-key data

fields prior to conducting a comparative file review or

requesting a regression analysis. Typically this

validation will occur after the HM DA validation, once

examination staff has selected a focal p oint and

V. Lending — HMDA

FDIC Consumer Compliance Examination Manual — Jul y 2021 V–9.33

identified non-key data fields that are necessary for the

review based on information provided by an institution

during the criteria interview.

2. Census tract errors–Examination staff will identify

errors in the key data field census tract. Examination

staff generally will use property address information

from a source document (such as a note) to validate the

census tract data field. To determine the root cause of

errors in the census tract data field, examination staff

may need to review the non-key data fields related to the

property address data point (street address city, state, or

zip code).

Even if the non-key data fields related to

the property address data point are incorrect, only errors

in the census tract key data field are counted as errors

when applying the applicable error threshold.

Upon completing a review of non-key data fields, if

examination staff determines the data to be unreliable,

examination staff will then assess the extent to which the

impact of the errors is significant. Examination staff will

direct an institution to correct errors in non-key data fields

that would affect a consumer compliance examination,

including fair lending reviews, or the accuracy of a CRA

performance evaluation. Also, in consultation with FDIC

field territory management, examination staff may direct an

institution to resubmit its HM DA LAR to ensure accurate

aggregate data is maintained.

Treatment of Data Fields for Non-Covered Loan

Applications

HMDA and Regulation C require a financial institution to

submit data about covered loans for which the institution

receives an ap plication or that it purchases. If, during the

accuracy review of key data fields, examination staff

identifies transactions reported on the LAR that do not meet

the regulatory definition of a covered transaction and were

reported in error, those transactions are considered over-

reported transactions. Examination staff will not include

data fields from over-reported transactions when counting

the number of key data field errors. Rather, examination

staff will remove over-reported transactions from the sample

universe and rep lace them with reportable transactions.

Nevertheless, examination staff will attempt to determine the

root cause of over-reported transactions identified during

transaction testing, such as a misunderstanding of the

provisions of Regulation C related to business-purpose

transactions. Examination staff will address over-reporting

errors identified during transaction testing following the

procedures to address systemic errors identified before

transaction testing. (See the section entitled Systemic Errors

Identified Prior to Transaction Testing).

____________________

Financial institutions eligible for a partial exemption need not report data

fields related to the property address data point.

I. Data Fields Reviewed During the Second Stage

of Transaction Testing

Paragraph 5 in the FFIEC Testing Guidelines discusses the

data fields to be reviewed during the two stages of HM DA

transaction testing. In relevant part, Paragraph 5 provides

flexibility for supervisory agencies to allow examiners to

review data fields in Stage 2 that were found to have no

errors in Stage 1. FDIC examination staff will limit review

in Stage 2 to data fields in which one or more errors were

found in Stage 1.

J. LAR Compl eteness and Identifying Omissions

Paragraph 8 of the FFIEC Testing Guidelines states that a

financial institution may be directed to resubmit its HM DA

LAR to include omitted reportable applications or loans.

Ensuring that all reportable covered transactions are included

on the LAR helps assess HM DA compliance and supports

the use of HMDA data in fair lending reviews and CRA

performance evaluations.

Identifying Omissions Universe and Sample Request

Loans and ap plications that are HM DA-reportable but

omitted from a LAR generally fall into two categories:

originated or purchased loans and non-originated loan

applications (declined, withdrawn, closed for

incompleteness, or approved but not accepted) that were not

identified as covered transactions. In order to ensure that all

reportable covered originated or purchased loans and non-

originated loan applications are included on the LAR,

examination staff develops an omissions universe of

potentially reportable covered transactions (the omissions

universe) as follows:

• Identify departments that take applications for covered

loans;

• Identify departments, if any, that purchase covered

loans;

• Identify software systems and tracking reports used

within these departments to capture loan application,

origination, and purchase data; and

• Using the reports from these systems, compile the

omissions universe.

In compiling the omissions universe, examination staff will

use reasonable means adap ted to reflect the scale,

organization, and complexity of the institution’s mortgage

business and its consumer compliance practices. For

example, examination staff may request reports from among

the following, if available:

V. Lending — HMDA

V–9.34 FDIC Consumer Compliance Examination Manual — July 2021

• An electronic loan trial balance that includes all loans

from the commercial, consumer, and mortgage

departments;

• Reconciliation or “pipeline” reports showing incoming

loan app lications;

• A list of non-originated applications (if no report or list

of non-originated ap p lications is available, examination

staff will have to manually compile the universe of non-

originated loans from the review period);

• A list of loans sold, by loan type, if the financial

institution sells mortgage loans that are not on the trial

balance for the review period; and/or

• A list of any dwelling secured loans purchased, by loan

type, during the review period.

Examination staff will request an explanation of the codes

used by an institution to identify specific loan level

information such as Consolidated Reports of Condition and

Income (CALL Report) codes, loan purpose code, and

collateral code to accompany any report that is being used to

compile the omissions universe. Examination staff will use

these codes to create the most likely universe of potentially

reportable covered loan applications based on regulatory

requirements.

The omissions universe may consist of all potentially

reportable covered loan originations or purchases and non-

originations combined into one data set or consist of multiple

data sets, such as all potentially reportable covered loan

originations or purchases in one data set and all non-

originations in one data set.

After developing the omissions universe, examination staff

will select the omissions sample using one of two methods:

1. Targeted Sampling. This is the preferred method

because it is most likely to determine whether any

app lications were omitted. Examination staff will

compare the omission universe to all applications

reported on the LAR. The two most likely approaches

consist of the following: 1) using an omissions universe

that consists of one data set, compare all the data in that

set against all applications reported on the LAR, or 2)

using an omissions universe that consists of multiple

data sets, individually compare each of the sets against

all applications reported on the LAR.

Once examination staff compares the omissions

universe to the covered transactions reported on the

LAR, any transactions in the omissions universe that

are not on the LAR will constitute the targeted

omissions universe. Examination staff will use the

number of transactions in the targeted omissions

universe to determine the omissions sample size using

the HM DA Table.

2. Non-Targeted Sampling. If targeted sampling is not

feasible, examination staff will p erform non-targeted

sampling from among the applications reflected in the

reports considered. For example, it may not be feasible

to conduct targeted samp ling when the available data

sets used to create the omissions universe have internal

record identifiers that do not correlate to the record

identifiers on the LAR. When performing non-targeted

sampling, the total number of transactions in the reports

considered is the omissions universe and is used to

determine the samp le size from the HM DA Table.

Examination staff then will select a random sample from

the omissions universe for review. Some transactions in

the omission sample will be reported on the LAR and

some will not be reported on the LAR, because the

sample was created from a random samp le of

transactions from the omissions universe.

Assessing HMDA LAR Completeness

Examination staff will determine if an ap plication is deemed

to have been correctly reported, correctly not reported, or

incorrectly reported on the LAR, depending on whether the

transaction is for a covered transaction. During the

completeness review, examination staff will use the samp le

sizes and thresholds stated in the HM DA Table.

Examination staff will determine whether a transaction was

(or was to be) secured by a dwelling and, if so, whether or

not is an excluded transaction.

The LAR is considered complete if the number of omissions

is below the thresholds listed in Column C when testing the

Initial Sample or Column D when testing the Total Sample

listed in the HM DA Table in Paragraph 11 of the FFIEC

Testing Guidelines.

K. Revalidation after Correction

Examination staff will consult with FDIC field territory

management to establish a timeline for an institution’s

management to correct, review, and verify corrected data.

The timeline will take into consideration the nature and

complexity of the required data correction, an institution’s

resources, and the amount of time required to complete the

consumer compliance examination, fair lending review,

and/or CRA performance evaluation in a timely manner.

When errors of accuracy or completeness are identified that

require correction, examination staff will review the

corrections made by an institution once they are completed

and before the institution resubmits the data. Examination

staff will conduct revalidation by sampling in accordance

with the HM DA Table, based on the size of the institution’s

corrected LAR, adjusted to address any identified omissions

or over-reporting. If there were accuracy errors, examination

staff will focus re-validation of corrections on the key data

fields in which errors were identified during transaction

testing or on any non-key data fields reviewed as part of a

V. Lending — HMDA

FDIC Consumer Compliance Examination Manual — Jul y 2021 V–9.35

fair lending review or CRA performance evaluation. If there

were errors of omission, examination staff will consider the

documentation provided by an institution of its corrective

actions to ensure the LAR is comp lete.

L. Persistent Issues

If, during the revalidation, examination staff determines that

any issues have not been corrected sufficiently and errors

remain, examination staff will again instruct an institution to

correct the remaining errors. Before revalidating the

corrected LAR, examination staff will request that an

institution provide monitoring and/or audit reports that

document the actions taken to correct the data error(s). In

these instances, examination staff will discuss with the

institution’s management expectations for the scope and

documentation of the monitoring and/or audit review.

Examination staff will review the monitoring and/or audit

findings and revalidate LAR data to test the effectiveness of

the data correction.

M. Examination Conclusions

Examination staff will summarize the strengths and

weaknesses of an institution’s HM DA-related CMS and

document any systemic errors of LAR completeness or data

inaccuracies in the Report of Examination, if warranted.

When app licable, examination staff will describe any

proactive steps management has taken to maintain

compliance with HMDA and Regulation C.

Examination staff will document the conclusions of the

HMDA transaction testing review and their assessment of the

strength of the CM S in the Regional Automated Document

Distribution and Imaging System (RADD) using the

standardized HM DA workpapers. Also, examination staff

will ensure that all examination workpapers related to the

HMDA transaction testing and CMS review conclusions are

maintained in RADD.

If examination staff identifies programmatic deficiencies

related to an institution’s compliance with HM DA and

Regulation C and/or Level 3 or Level 2 HM DA violations,

examination staff will isolate the root cause of the error(s)

and relate them to specific weakness(es) in an institution’s

CMS. Whether or not an institution maintained procedures

reasonably adapted to avoid errors is relevant to establishing

a HM DA violation, as provided in the administrative

enforcement provisions of Regulation C. See 12 CFR

§ 1003.6(b).

Examination staff will discuss any LAR completeness or

accuracy errors that require LAR corrections or

resubmissions with an institution’s management during the

course of the examination. Examination staff will request

that an institution provide FDIC examination staff, field

territory management or the Regional Office, whichever is

appropriate, an acknowledgement that its management has

verified the comp leteness and accuracy of the data and has

resubmitted the corrected LAR. A copy of a summary screen

indicating successful submission of HMDA data via the

HM DA Platform is accep table as such an acknowledgement.

Examination staff will provide an institution with steps for

corrective action to successfully address any problem areas

and strengthen an institution’s consumer compliance posture

for the future. Examination staff will discuss all findings and

recommendations at the exit meeting with management

and/or the Board of Directors to obtain a commitment for

corrective action.

V. Lending — HMDA

V–9.36 FDIC Consumer Compliance Examination Manual — July 2021

References

12 CFR Part 1003

Official Interpretations, Supplement I to 12 CFR Part

1003

V. Lending — HMDA

FDIC Consumer Compliance Examination Manual — December 2020 V–9.37

Designated Key HMDA Data Fields

The Federal Deposit Insurance Corporation (FDIC), Board of Governors of the Federal Reserve System (Board), and Office

of the Comptroller of the Currency (OCC) have designated key HM DA data fields to support the efficient and effective

evaluation of financial institutions’ compliance with HM DA’s requirements.

When evaluating financial institutions’

compliance with HMDA requirements, the FDIC, Board, and OCC will focus primary attention on the Designated Key HMDA

Data Fields during transaction testing for HM DA data collected on or after January 1, 2018.

However, in certain

circumstances, consistent with the FFIEC HM DA Examiner Transaction Testing Guidelines, examination staff may determine

that it is necessary to review additional HM DA data fields, as appropriate.

Table 1 lists all 110 HM DA data fields established in the FFIEC Filing Instructions Guide and their corresponding HM DA

data p oints and identifies the Designated Key HM DA Data Fields.

Table 2 lists only the 37 Designated Key HM DA Data Fields and identifies the 21 key data fields ap plicable to financial

institutions that are eligible for a partial exemption under the Economic Growth, Regulatory Relief, and Consumer Protection

Act (EGRRCPA)

____________________

See FIL-51-2017, FDIC Releases Interagency Designated Key HMDA Data Fields List.

Each agency shall operate in accordance with its supervisory authority.

V. Lending — HMDA

V–9.38 FDIC Consumer Compliance Examination Manual — July 2021

Table 1 lists all 110 HM DA data fields and their corresponding HMDA data points.

The 37 Designated Key HM DA Data Fields applicable to financial institutions not eligible for a HM DA partial exemption

under the EGRRCPA are shown in italicized bold text.

The 21 Designated Key HM DA Data Fields ap plicable to financial institutions that are eligible for a HM DA partial

exemption under the EGRRCPA are identified by an asterisk (*).

Data Field Name

Data Point Name

Record Identifier – Value is 2

Legal Entity Identifier (LEI)

Universal Loan Identifier (ULI)

or Non

-Universal Loan Identifier (NULI)

Universal Loan Identifier (ULI)

or Non-Universal Loan Identifier

(NULI)

Application Date*

Loan Type*

Loan Purpose*

Preapproval

Construction M ethod

Occupancy Type*

Loan Amount*

Action Taken*

Action Taken Date*

Street

Address Property Address

City

Property Address

State

Property Location &

Property Address

ZIP Code

Property Address

County

Property Location

Census Tract*

Property Location*

Ethnicity of Applicant or Borrower: 1*

Ethnicity*

Ethnicity of Applicant or Borrower: 2

Ethnicity

Ethnicity of Applicant or Borrower: 3

Ethnicity

Ethnicity of Applicant or Borrower: 4

Ethnicity

Ethnicity of Applicant or Borrower: 5

Ethnicity

Ethnicity of Applicant or Borrower: Free Form Text Field for Other

Hisp anic or Latino

Ethnicity

Ethnicity of Co-Applicant or Co-Borrower: 1*

Ethnicity*

Ethnicity of Co

-Applicant or Co-Borrower: 2 Ethnicity

Ethnicity of Co-Applicant or Co-Borrower: 3

Ethnicity

Ethnicity of Co-Ap plicant or Co-Borrower: 4

Ethnicity

Ethnicity of Co-Applicant or Co-Borrower: 5

Ethnicity

Ethnicity of Co-Applicant or Co-Borrower: Free Form Text Field for

Other Hispanic or Latino

Ethnicity

V. Lending — HMDA

FDIC Consumer Compliance Examination Manual — December 2020 V–9.39

Data Field Name

Data Point Name

Ethnicity of Applicant or Borrower Collected on the Basis of

Visual Observation or Surname

Ethnicity

Ethnicity of Co-Applicant or Co-Borrower Collected on the Basis of

Visual Observation or Surname

Ethnicity

Race of Applicant or Borrower: 1*

Race*

Race of Applicant or Borrower: 2*

Race*

Race of

Applicant or Borrower: 3 Race

Race of Applicant or Borrower: 4

Race

Race of Applicant or Borrower: 5

Race

Race of Applicant or Borrower: Free Form Text Field for American

Indian or Alaska Native Enrolled or Principal Tribe

Race

Race of Applicant or Borrower: Free Form Text Field for Other Asian

Race

Race of Applicant or Borrower: Free Form Text Field for Other Pacific

Islander

Race

Race of Co-Applicant or Co-Borrower: 1*

Race*

Race of Co-Applicant or Co-Borrower: 2*

Race*

Race of Co

-Applicant or Co-Borrower: 3 Race

Race of Co-Applicant or Co-Borrower: 4

Race

Race of Co-Applicant or Co-Borrower: 5

Race

Race of Co-Applicant or Co-Borrower: Free Form Text Field for

American Indian or Alaska Native Enrolled or

Principal Tribe

Race

Race of Co-Applicant or Co-Borrower: Free Form Text Field for Other

Asian

Race

Race of Co-Applicant or Co-Borrower: Free Form Text Field for Other

Pacific Islander

Race

Race of Applicant or Borrower Collected on the Basis of Visual

Observation or Surname

Race

Race of Co-Applicant or Co-Borrower Collected on the Basis of Visual

Observation or Surname

Race

Sex of Applicant or Borrower*

Sex*

Sex of Co-Applicant or Co-Borrower*

Sex*

Sex of Applicant or Borrower Collected on the Basis of Visual

Observation or Surname

Sex

Sex of Co-Applicant or Co-Borrower Collected on the Basis of Visual

Observation or Surname

Sex

Age of Applicant or Borrower*

Age*

Age of Co-Applicant or Co-Borrower*

Age*

Income*

Type of Purchaser

V. Lending — HMDA

V–9.40 FDIC Consumer Compliance Examination Manual — July 2021

Data Field Name

Data Point Name

Rate Spread

HOEPA Status

Lien Status*

Credit Score of Applicant or Borrower

Credit Score

Credit Score of Co-Applicant or Co-Borrower

Credit Score

Applicant or Borrower, Name and Version of Credit

Scoring M odel

Credit Score

Applicant or Borrower, Name and Version of Credit Scoring Model:

Conditional Free Form Text Field For Code 8

Credit Score

Co-Applicant or Co-Borrower, Name and Version of Credit Scoring

Model

Credit Score

Co-Applicant or Co-Borrower, Name and Version of Credit Scoring

Model: Conditional Free Form Text Field For Code 8

Credit Score

Reason for Denial: 1

Reason for Denial

Reason for Denial: 2

Reason for Denial

Reason for Denial: 3

Reason for Denial

Reason for Denial: 4

Reason for Denial

Reason for Denial: Conditional Free Form Text Field for Code 9

Reason for Denial

Total Loan Costs

Total Loan Costs or Total Points

and Fees

Total Points and Fees

Total Loan Costs or Total Points

and Fees

Origination Charges

Discount Points

Lender Credits

Interest Rate

Prep ayment Penalty Term

Debt-to-Income Ratio

Combined Loan-To-Value Ratio

Loan Term

Introductory Rate Period

Balloon Payment

Non-Amortizing Features

Interest-Only Payments

Non-Amortizing Features

Negative Amortization

Non-Amortizing Features

Other Non-Amortizing Features

Non-Amortizing Features

Property Value

Manufactured Home Secured Property Type

Manufactured Home

Secured Property Type

V. Lending — HMDA

FDIC Consumer Compliance Examination Manual — December 2020 V–9.41

Data Field Name

Data Point Name

Manufactured Home Land Property Interest

Manufactured Home Land

Property Interest

Total Units*

Multifamily Affordable Units

93 Submission of Application Application Channel

Initially Payable to Your Institution

Application Channel

Mortgage Loan Originator NM LSR Identifier

Mortgage Loan Originator

NMLSR Identifier

Automated Underwriting System: 1

Automated Underwriting

Sy stem

97 Automated Underwriting System: 2

Automated Underwriting

Sy stem

98 Automated Underwriting System: 3

Automated Underwriting

Sy stem

99 Automated Underwriting System: 4

Automated Underwriting

Sy stem

100

Automated Underwriting System: 5

Automated Underwriting

Sy stem

101

Automated Underwriting System: Conditional Free Form Text Field for

Code 5

Automated Underwriting

Sy stem

102

Automated Underwriting System Result: 1

Automated Underwriting

System

103

Automated Underwriting System Result: 2

Automated Underwriting

Sy stem

104

Automated Underwriting System Result: 3

Automated Underwriting

Sy stem

105

Automated Underwriting System Result: 4

Automated Underwriting

Sy stem

106

Automated Underwriting System Result: 5

Automated Underwriting

Sy stem

107

Automated Underwriting System Result: Conditional Free Form

Text Field for Code 16

Automated Underwriting

Sy stem

108

Reverse Mortgage

109

Open-End Line of Credit

110

Busi ness or Commerci al Purpose

Busi ness or Commerci al

Purpose

V. Lending — HMDA

V–9.42 FDIC Consumer Compliance Examination Manual — July 2021

Table 2 lists the 37 Designated Key HMDA Data Fields.

Designated Key HMDA Data Fields for financial

institutions not eligible for an EGRRCPA partial

exemption

Designated Key HMDA Data Fields for financial

institutions that are eligible for an EGRRCPA

partial exemption

Universal Loan Identifier (ULI)

App lication Date

Loan Ty p e

Loan Purpose

Occup ancy Ty pe

Loan Amount

Action Taken

Action Taken Date

Census Tract

Ethnicity of Applicant or Borrower: 1

Ethnicity of Co-Applicant or Co-Borrower: 1

Race of Applicant or Borrower: 1

Race of Applicant or Borrower: 2

Race of Co-Applicant or Co-Borrower: 1

Race of Co-Applicant or Co-Borrower: 2

Sex of Applicant or Borrower

Sex of Co-Applicant or Co-Borrower

Age of Applicant or Borrower

Age of Co-Applicant or Co-Borrower

Income

Lien Status

Credit Score of Applicant or Borrower

Credit Score of Co-Applicant or Co-Borrower

Origination Charges

Discount Points

Lender Credits

Interest Rate

Debt-to-Income Ratio

Combined Loan-To-Value Ratio

Loan Term

Property Value

Manufactured Home Secured Property Type

Total Units

102

Automated Underwriting System Result: 1

108

Reverse Mortgage

109

Open-End Line of Credit

110

Business or Commercial Purpose