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HMDA - Better to Over-Report than Under-Report?
Dan Persfull, BOL Guru
Guru Bios
Question: I know there is a violation for not reporting loans that should be for HMDA purposes. It was brought up at one of our meetings that it is better to over-report loans for HMDA purposes rather than to under-report. Is that true, or will we be in violation for over-reporting as well? Any clarification would be greatly appreciated.
Answer: HMDA is one of the few Regulations that you get into as much trouble for over-reporting as you do under-reporting. Any loan reported that should not have been is a violation, and any loan that should have been reported but was not is a violation. In addition, reporting loans not subject to Reg C is also a good indication that you may be collecting Government Monitoring Information in violation of Reg B and instigating an ECOA exam by your examiners. You will want to read page C-7 of the "Getting it Right" guide where it discusses bona-fide errors. If you are knowingly over-reporting you are going to lose this safe harbor because you definitely don't have a process in place to catch and correct errors.
First published on BankersOnline.com 8/14/06
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