By Aaron Thompson, Senior Examiner, Federal Reserve Bank of Richmond
National monitoring information (GMI) relates to the mortgage applicant demographic data creditors must gather under Regulation B, which implements the Equal Credit chance Act (ECOA), and Regulation C, which implements the house Mortgage Disclosure Act (HMDA), whenever customers make an application for particular home loans. The requirement that is regulatory loan providers to get such information goes back to 1977 whenever Federal Reserve Board (Board) amended Regulation B to need creditors to get monitoring details about age, intercourse, marital status, and battle or nationwide beginning on home-purchase loans and refinancing deals. 1 The Board explained that these details would assist federal regulators detect home loan lending discrimination. Customer groups additionally thought that this information could be valuable in detecting home loan lending discrimination. 2
Likewise, in 1989, the banking institutions Reform, healing and Enforcement Act amended the HMDA to need creditors to gather battle, intercourse, and earnings information from candidates for home loan loans to greatly help 3 In 2002, the Board amended Regulation C to conform the assortment of battle and ethnicity information to modifications used because of the working office of Management and Budget. 4 Overall, the range for the HMDA information collection demands is wider as compared to ECOA’s requirement considering that the HMDA relates to all home loans, including home-improvement loans.
On the basis of the regularity of assessment violations, complying with GMI needs could be challenging. From the one hand, Regulation B generally prohibits creditors from gathering details about battle, color, faith, nationwide beginning, or intercourse “to discourage discrimination, in line with the premise that when creditors cannot ask about or note candidates’ individual characteristics, such as for example nationwide beginning or battle, they have been more unlikely unlawfully to cons 5 But the legislation also incorporates an exclusion in 12 C.F.R. §1002.13 that needs creditors to get GMI for home-purchase and refinanced loans secured by the dwelling that is owner-occupied. 6 likewise, Regulation C requires that creditors gather GMI for several kinds of home mortgages. Therefore, creditors need to ensure they’ve procedures in position to make sure that applicant info is perhaps perhaps maybe not gathered about battle, color, religion, nationwide beginning, or intercourse, except into the context of GMI for home mortgages, once they must gather particular information.
Analysis supervisory data from Federal Reserve System conformity examinations reveals that GMI requirements regularly show up on record of the many usually violated laws. These violations include failing continually to collect GMI whenever needed, collecting it you should definitely required, and recording the GMI information incorrectly. To facilitate conformity, this short article product reviews the check smart review GMI requirements under Regulations B and C, identifies typical GMI violations in Federal Reserve System conformity exams, and covers the brand new GMI conditions regarding the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
Under 12 C.F.R. §1002.13(a)(1), a “creditor that gets a credit card applicatoin for credit mainly for the acquisition or refinancing of the dwelling occupied or even be occupied by the applicant as a principal res 7 house equity personal lines of credit aren’t at the mercy of this part unless it really is easily obvious into the creditor at application that the main function would be to buy or refinance a major dwelling. 8 The required information might be noted on the applying form or for a split kind that references the program. 9 The creditor must explain the good explanation the info is requested. If the applicant doesn’t prov 10 Unlike voluntarily the HMDA, Regulation B will not need creditors to aggregate the details as a register or report it.
The dining dining table below compares the information creditors must collect under laws B and C.