by The Home Mortgage Disclosure Act (HMDA) is a federal law that requires certain financial institutions to collect, report, and disclose information about their mortgage lending activities. The HMDA was enacted in 1975 to provide the public with information about the types and amounts of home mortgages that financial institutions are providing and to assist in identifying possible discriminatory lending practices.
HMDA requires financial institutions to collect, report, and disclose information about home purchase loans, home improvement loans, and refinancing. The information that must be collected includes the type of loan, the purpose of the loan, the property type, the loan amount, the interest rate, the term of the loan, the applicant’s income, the applicant’s race, ethnicity, sex, and whether the applicant was denied credit or received a higher rate or fees.
The data collected through HMDA is available to the public, and can be used by government agencies, community organizations, and other interested parties to identify lending patterns and potential discriminatory practices. The Consumer Financial Protection Bureau (CFPB) is responsible for enforcing HMDA and ensuring that financial institutions are in compliance with the Act.
Additionally, HMDA data is used for a variety of purposes such as fair lending enforcement, community reinvestment, and affordable housing planning. The data can be used to identify patterns of lending in a particular geographic area and to assess whether credit is being made available to all segments of the population. The data can also be used to identify possible discriminatory lending practices.
The Home Mortgage Disclosure Act (HMDA) has several provisions that require certain financial institutions to collect, report, and disclose information about their mortgage lending activities. Some of the key provisions include:
- Data collection: Financial institutions must collect information about home purchase loans, home improvement loans, and refinancings. This includes the type of loan, the purpose of the loan, the property type, the loan amount, the interest rate, the term of the loan, the applicant’s income, the applicant’s race, ethnicity, sex, and whether the applicant was denied credit or received a higher rate or fees.
- Reporting: Financial institutions must report the data they collect to the Consumer Financial Protection Bureau (CFPB) and make it available to the public.
- Record retention: Financial institutions must retain records of the data they collect and report for a certain period of time and must make those records available for review by the CFPB.
- Public access: The data collected through HMDA is available to the public and can be used by government agencies, community organizations, and other interested parties to identify lending patterns and potential discriminatory practices.
- Coverage: HMDA applies to depository institutions and their subsidiaries, as well as non-depository institutions that meet certain asset-size and origination thresholds.
- Fair lending enforcement: The data collected can be used for fair lending enforcement and identifying patterns of lending in a particular geographic area.
- Community Reinvestment: The data can be used to evaluate a financial institution’s record of helping to meet the credit needs of the local communities in which it operates.
- Enforcement: The CFPB is responsible for enforcing HMDA and ensuring that financial institutions are in compliance with the act. Violations of HMDA can result in penalties, including fines and legal action.
