Published on August 22, 2019
Written by Ashley Holmes
During the completion of HMDA reporting for 2018, we noticed several instances where the borrower’s demographic information (ethnicity, race, sex) wasn’t obtained or entered onto Form 1003. To help clarify what is expected, we wanted to provide the requirements for obtaining and entering this information based on how the application is taken. Entering this information properly has many benefits, including assisting you with your data collection.
If you take the application face-to-face, you must obtain the demographic information either directly from the borrower or, if the borrower wishes not to provide the information, from visual observation or use of the borrower’s surname.
This is the crucial point: If the borrower wishes not to provide the information, you must obtain the information by either visual observation or using the borrower’s surname. You may not select “information not provided.”
If you obtain the borrower’s information via visual observation or surname, then you cannot select a sub category for the ethnicity or race. Instead must choose from the aggregate categories, which are:
Native Hawaiian or Other Pacific Islander;
When you take an application through any means other than in-person, you must enter the demographic information exactly how the borrower provided it; however, if any of the pieces of information are left blank, you must select that the information was not provided.
If the borrower selects more than one ethnicity, race or sex, you must report all categories the borrower selected. For HMDA purposes, only five categories will be reported on the loan application register.
Appendix B in Regulation C provides guidance for obtaining and reporting of the borrower’s demographic information. This page from the CFPB’s eRegulation Tool can assist you in ensuring that you are collecting and reporting the information correctly.