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National Monitoring Information needs Under the HMDA and also the ECOA

National Monitoring Information needs Under the HMDA and also the ECOA

By Aaron Thompson, Senior Examiner, Federal Reserve Bank of Richmond

Introduction

National monitoring information (GMI) is the loan applicant data that are demographic 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 consumers make an application for particular home mortgages. The regulatory need for loan providers to gather such information goes back to 1977 as soon as the Federal Reserve Board (Board) amended Regulation B to need creditors to get monitoring details about age, intercourse, marital status, and competition or national beginning on home-purchase loans and refinancing deals. 1 The Board explained that these records would assist federal regulators detect home loan lending discrimination. Customer groups additionally thought that this information could be valuable in detecting home loan discrimination that is lending. 2

Likewise, in 1989, the banking institutions Reform, healing and Enforcement Act amended the HMDA to need creditors to get battle, intercourse, and earnings information from applicants for home loan loans to assist 3 In 2002, the Board amended Regulation C to conform the number of competition and ethnicity information to modifications used because of the working office of Management and Budget. 4 Overall, the range regarding the HMDA information collection demands is wider as compared to ECOA’s requirement as the HMDA relates to all home mortgages, including home-improvement loans.

In line with the regularity of assessment violations, complying with GMI needs could be challenging. In the one hand, Regulation B generally forbids creditors from gathering details about battle, color, faith, national beginning, or intercourse “to discourage discrimination, on the basis of the premise that when installment loan default laws in illinois creditors cannot ask about or note candidates’ individual characteristics, such as for instance nationwide beginning or battle, they have been more unlikely unlawfully to cons 5 But the legislation also includes an exclusion in 12 C.F.R. Continue Reading →

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