Skip to content

Applying the new HMDA rules

Question: I have heard lots of conflicting information about the HMDA rules that take effect in 2004. When should we begin using the new data collection format and what loans and applications should we report on?

Answer: You will report for year 2004 using the new format. That means that any loan that is reportable in 2004 must have the new information, including the applicant's ethnicity. In order to have this information for reporting on loan decisions made on or after January 1, 2004, you will need to begin collecting the information sometime in 2003.

How soon you begin collecting this information will depend on the procedures and timing of the lending decisions you make. Some lenders make rapid decisions and close loans within a week or two. These lenders won't need to use the new format until mid-December, 2003. Other lenders may take longer. Many loan applications may be in underwriting or pending for more than a month or two. This is especially the case with pre-approvals.

Right now is a good time to take a look at your loan application patterns. Find the length of time that the slower applications take. Work backwards from there to determine your implementation date. Be sure to schedule training before the implementation date.

Copyright © 2003 Compliance Action. Originally appeared in Compliance Action, Vol. 8, No. 6, 6/03

First published on 06/01/2003

Search Topics