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#106310 - 08/13/04 08:29 PM
Re: 2004 HMDA and Ethnicity
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Anonymous
Unregistered
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Quote:
I'm confused. First I was told that when an applicant chooses his/her ethnicity (Hispanic or not Hispanic) that he/she still needs to choose a race category (or more than one, if they want). The FFIEC Powerpoint presentation says no; it states that if a person chooses "Hispanic" that they do not need to choose a race. Has anyone else noticed this? It's in the Q&A section at the end of the presentation. If they don't choose a race, what do we report on the LAR? Would that be a code 7 (N/A)? I'm working on training material right now, so anyone else's opinions or comments are welcomed!
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#106311 - 08/13/04 08:41 PM
Re: 2004 HMDA and Ethnicity
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10K Club
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
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The applicant is not required to choose any category at all.
They may choose Ethnicity and leave the other categories blank, or any combination thereof.
In face to face applications you are required to choose for them based on visual observation and surname if they leave the category blank. If it's a telephone, mail, or Internet application you would report what the applicant furnished and report Not Provided for what they did not.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
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#106312 - 08/13/04 08:44 PM
Re: 2004 HMDA and Ethnicity
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Anonymous
Unregistered
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Applicants are not required to provide their ethnicity and race information. If you see the applicants during the application process and they have not provided the information, then the lender must note the ethnicity and race information based on visual observation and/or surname if the action taken date is on or after 1/1/04. If the application was received in 2003 and the action taken date occurs in 2004 and the applicant selected Hispanic on the government monitoring information section then you would use code 1 for Ethnicity to indicate Hispanic and then you would use Code 7 for race under the transition rules if you did not see the applicant.
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#106313 - 08/13/04 09:24 PM
Re: 2004 HMDA and Ethnicity
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Power Poster
Joined: Aug 2004
Posts: 3,300
back to my roots
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I was under the impression that code 7 was only to be used for non-entities. Shouldn't it be marked as code 6 - Not Provided?
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Somewhere, something incredible is waiting to be known. - Carl Sagan
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#106315 - 09/02/04 08:17 PM
Re: 2004 HMDA and Ethnicity
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Power Poster
Joined: Aug 2004
Posts: 3,300
back to my roots
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Sorry to bring up this thread again , but I have another twist on this scenario:
What if the application is taken face-to-face but the applicant obviously lies about their race/ethnicity/gender. Is the LO to take the information given by the applicant, even though visual observation confirms that the info is incorrect?
_________________________
Somewhere, something incredible is waiting to be known. - Carl Sagan
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#106316 - 09/02/04 08:25 PM
Re: 2004 HMDA and Ethnicity
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Power Poster
Joined: Aug 2001
Posts: 7,351
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You must use what the applicant indicates.
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The more you sweat in training, the less you bleed in battle.......
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#106321 - 09/02/04 08:56 PM
Re: 2004 HMDA and Ethnicity
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10K Club
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
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I agree with David and Lestie. The only time you report the information based on visual observation in a face to face application is when the applicant does not furnish the information.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
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#106322 - 09/03/04 01:08 PM
Re: 2004 HMDA and Ethnicity
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Power Poster
Joined: Jul 2002
Posts: 5,568
New Jersey
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I'm not disagreeing with Lestie, David, or Dan; we have handled similar situations the same way.
But think about the effect of such actions. We are then knowingly reporting inaccurate information, in accordance with the regulation, to the Federal Reserve Board. They will then take this inaccurate information, disseminate it to the public, and use this inaccurate information to make decisions and evaluations.
Add to this correct reporting of inaccuracies the other errors reported by those who are not scrupulously fastidious about their data integrity, and you start to wonder exactly how valid the HMDA information is. It reminds me of Mark Twain's statement that there are three types of lies: lies, damnable lies, and statistics.
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Management is doing things right; leadership is doing the right things. Peter Drucker
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#106323 - 09/03/04 02:14 PM
Re: 2004 HMDA and Ethnicity
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Gold Star
Joined: May 2004
Posts: 274
New England
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For somebody like myself who is not close to this issue daily, but who is involved in the risk evaluation of the process, it appears excruciating to see so many people with good intentions suffer through this. The problem is exascerbated by a level of vagueness and typical unclear regulatory implementation which can tend to become too buraucratic, and which can turn off senior management and the board.
Customers primarily contact us about HMDA-reportable mortgage loans (firsts, refinances, or home improvements) through telephone calls to our call center. When a consumer decides to submit an application (and become a customer), the call center representative after gathering all of the applicant data that constitutes an application then briefly explains the Reg C requirement to gather race, gender and ethnicity data and the customer is told that the bank's decision regarding approving or declining a loan is not in any way influenced by the applicant's preference not to disclose their race, gender, or ethnicity. The applicant is then asked, "May I ask your race, gender and ethnicity?" If the customer says yes, we ask ethnicity, race and gender; if they say no, we code it 3-6-3 and nothing else is done. Our analysis of reporting to date, at least for our institution, is that if a customer does not want to provide ethnicity, then the chances are almost always that they don't want to move ahead and discuss race and gender. At that point, we code the session a "3-6-3". We don't hound the customer once they indicate any displeasure with revealing ethnicity. We stop asking at that point. Our process has recently gone through a rigid examination, and with flying colors.
I'm seeing a tendency for some people here to get way too bogged down in process. The object is to make loans and, optionally, to obtain the race, gender and ethnicity data if possible, and without alienating the customer or losing the deal. The goal isn't to be good data collectors but not make loans.
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#106324 - 09/03/04 02:48 PM
Re: 2004 HMDA and Ethnicity
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10K Club
Joined: Nov 2000
Posts: 18,762
Central City, NE
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Quote:
We are then knowingly reporting inaccurate information, in accordance with the regulation, to the Federal Reserve Board.
You don't know if you are taking inaccurate info. How do you know if he is really a she, that he is black, white, or purple? The point is that they can fill it out any way they want. The instructions make that very clear. No where has the FRB every said "over see this process to make sure the info. is accurate". I believe that the FRB knows that they will get some bogus info, but they are willing to pay that price vs. having a loan officer change what an applicant says.
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#106325 - 09/03/04 03:12 PM
Re: 2004 HMDA and Ethnicity
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Power Poster
Joined: Jul 2002
Posts: 5,568
New Jersey
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David, I do know the difference between a male and a female (at least as long as we're not lending to Michael Jackson or RuPaul).
_________________________
Management is doing things right; leadership is doing the right things. Peter Drucker
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#106326 - 09/03/04 03:36 PM
Re: 2004 HMDA and Ethnicity
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Power Poster
Joined: Dec 2002
Posts: 3,841
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And our examiners point was that if the property is titled as "husband and wife", and the mortgage is signed that way, we can be certain that one person is male and the other is female. From a common sense point of view, I know he's right, and chose not to make an issue of it (now, if he had cited it as an error, that might have been different, but this was just a friendly visit). If there is only one applicant, or the applicants are not married to each other, we continue to report as shown on the application.
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#106329 - 09/03/04 05:41 PM
Re: 2004 HMDA and Ethnicity
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Anonymous
Unregistered
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What do you enter for Vulcans?
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#106330 - 09/03/04 06:26 PM
Re: 2004 HMDA and Ethnicity
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10K Club
Joined: Nov 2000
Posts: 18,762
Central City, NE
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Quote:
What do you enter for Vulcans?
There is no "other" race anymore, so this isn't possible. We used to see all sorts of weird stuff.
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#106331 - 09/07/04 02:28 PM
Re: 2004 HMDA and Ethnicity
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10K Club
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
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Quote:
The object is to make loans and, optionally , to obtain the race, gender and ethnicity data if possible,
This is not an option, it's a regulatory requirement.
As an applicant I have the right to choose any designation I wish. It is not the lender's, or anyone else's place to judge what I choose is right or wrong. The lender's responsibility is to collect the information from the applicant and report the data accurately.
I have 1/4 Native American heritage, and I can legally designate myself as an American Indian, however my physical features do not reveal the Native American heritage. Therefore, if I chose American Indian, and you changed it to White based on your observation you would be reporting inaccurate information.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
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