New information reported under HMDA and its application in fair lending enforcement

Federal Reserve Bulletin, Summer, 2005 by Robert B. Avery, Glenn B. Canner, Robert E. Cook, Shannon C. Mok, Caitlin G. Coslett, Patricia J. Dykes, Sylvia A. Freeland

Distribution of HMDA Data and Pre-2004 Requirements
of Regulation C

Under the Home Mortgage Disclosure Act (HMDA), lenders
use a "loan/application register" (HMDA/LAR) to
report information annually to their federal supervisory
agencies for each application and loan acted on during the
calendar year. Lenders must make their HMDA/LARs available
to the public by March 31 following the year to which
the data relate, and they must remove the two date-related
fields to help preserve applicants' privacy. (1)

The Federal Financial Institutions Examination Council
(FFIEC), acting on behalf of the federal supervisory agencies,
compiles the reported information and prepares an
individual disclosure statement for each institution--one for
each metropolitan statistical area (MSA) and metropolitan
division (MD) in which it has offices--as well as aggregate
reports for all covered lenders in each MSA and other
reports. (2) The disclosure and aggregate reports are detailed
tables of data on individual loans and applications.

The disclosure statements and reports are available to the
public at the FFIEC website for HMDA (www.ffiec.gov/
hmda), from the covered lenders themselves, and from
depositories (such as public libraries and other government
offices) in each MSA. (3) In addition, a copy of the HMDA/
LAR for each institution is available to the public on
CD-ROM for a nominal charge. The FFIEC also makes
available a copy of the file of population characteristics of
each census tract covered by the tables on individual institutions
and by the aggregate tables. The 2004 census tract file
is derived from the 2000 decennial census. MSA and MD
identifiers included on that file are based on the designations
of MSAs issued by the Office of Management and
Budget. (4)

Before the most recent revisions, in 2002, the Federal
Reserve Board's Regulation C required lenders to report the
following information on home-purchase and home-improvement
loans and on the refinancing of such loans:

For each application or loan

* application date and the date an action was taken on the
application

* action taken on the application

--approved and originated

--approved but not accepted by the applicant

--denied (with the reasons for denial--voluntary for
some lenders)

--withdrawn by the applicant

--file closed for incompleteness

* loan amount

* income relied on in loan underwriting

* loan type

--conventional

--insured by the Federal Housing Administration

--guaranteed by the Veterans Administration

--backed by the Farm Service Agency or Rural Housing

Service

* loan purpose

--home purchase

--refinance

--home improvement

* type of purchaser (if the lender subsequently sold the
loan)

For each applicant or co-applicant

* race or ethnicity

* sex

For each property

* location, by state, county, and census tract

* type (one- to four-family dwelling or dwelling with five
or more units)

* occupancy status (owner-occupied or nonowner-occupied)

Information is also reported on home loans purchased by an
institution during a calendar year. Under the 2002 revisions
to Regulation C, additional items became required beginning
in 2004.

(1.) Lenders must make their date-modified register available to the
public for a period of three years.

(2.) MSAs that have a single core with a population of 2.5 million or
more and meet certain other requirements contain MDs. Of the 370 MSAs
in the United States, 11 have a population of at least 2.5 million
and have a total of 29 MDs. Starting with the release of the 2004
HMDA data, disclosure reports will follow the guidance provided by
the Office of Management and Budget (OMB) regarding the appropriate
use of statistical-area definitions; see Office of Management and
Budget (2003), OMB Bulletin, no. 03-04 (June),
www.whitehouse.gov/omb/bulletins/b03-04.html. In conformance with OMB
guidance, the FFIEC will prepare disclosure reports for each MSA and
MD.

(3.) The FFIEC maintains the most recent three years of HMDA data. Data
for earlier years can be obtained from the National Technical
Information Center, Springfield, Virginia, www.ntis.gov.

(4.) See Office of Management and Budget, OMB Bulletin.