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#106233 - 08/14/03 05:39 PM 2004 HMDA and Ethnicity
IUalum Offline
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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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#106234 - 08/14/03 05:45 PM Re: 2004 HMDA and Ethnicity
gone Offline
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Whew, I thought I was going crazy when I saw that slide. I was going to pull my notes on it.
I thought the race had to be filled out.

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#106235 - 08/14/03 06:00 PM Re: 2004 HMDA and Ethnicity
Don_Narup Offline

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No they do not have to enter a race if they indicate ethnicity is Hispanic. They do need to enter a Race code if not Hispanic.

The confusion comes from the fact that Hispanic is not a Race its an origin, and there are people of different Races that are of Hispanic origin.

By just indicating the ethnicity is Hispanic, then regardles of their race, tracking of loans to Hispanics becomes easier.

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#106236 - 08/14/03 06:20 PM Re: 2004 HMDA and Ethnicity
IUalum Offline
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So you're saying it's optional for a Hispanic person to enter a race? Then if they don't choose one on the LAR do you enter code 7 for Not Applicable? You can't leave it blank can you?
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#106237 - 08/14/03 06:21 PM Re: 2004 HMDA and Ethnicity
opie Offline
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By just allowing the entering of ethnicity and not requiring race, I don't see how this benefits in data collection. Wouldn't we still have the same information as before the change?

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#106238 - 08/14/03 07:20 PM Re: 2004 HMDA and Ethnicity
hmdagal Offline
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At the training session in Chicago last week, we were told that we have to collect both ethnicity and race information. If the application is taken by phone, mail or internet and the applicant chooses not to provide one or the other, we would enter the code for "not provided". If the application is taken face to face the banker would need to provide both ethnicity and race based on visual observation or surname. Unfortunately, they were not able to give any guidance as to what race choice(s) would be appropriate for an hispanic or latino person.

I can't view the powerpoint presentation on the website, but it's supposed to be the same one used at the training session. There's a conversion chart toward the back that we were told is only to be used for the transition period (application taken in 2003, action taken in 2004). Is that what you're looking at?

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#106239 - 08/14/03 07:25 PM Re: 2004 HMDA and Ethnicity
IUalum Offline
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Yes, it's probably the same. We were told something similar at a training session a couple of weeks ago. The example of the LAR that's downloadable from the FFIEC site is even more confusing; it shows some examples, and one of them is a Hispanic applicant with a Hispanic co-applicant. The applicant's race is white and the co-applicant's race is black.
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#106240 - 08/14/03 08:43 PM Re: 2004 HMDA and Ethnicity
GreatBlue Offline
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USBAVP,
I'm not seeing the slide you referenced. The only slide I see that seems to refer to this issue is, I think, slide 59 which shows the transition rule. What it is showing is that if a customer using a 2003 application chose Hispanic, if final action is in 2004, you would convert that to Ethnicity - Hispanic, and Race - 7 - not applicable.

Is there another slide I'm missing?
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#106241 - 08/14/03 08:46 PM Re: 2004 HMDA and Ethnicity
IUalum Offline
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It's slide 31. It doesn't specifically mention Hispanic applicants, but says an applicant does not have to choose both ethnicity and race.
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#106242 - 08/14/03 09:41 PM Re: 2004 HMDA and Ethnicity
Anonymous
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I believe it is a play on words. If the applicant answers the Ethnicity question, they still have the option to not answer the race question (ie they don't have to complete it). However, in a face to face interview you will have to complete it based on visual observation; by phone, etc. report it as not provided. This will probably happen a lot.

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#106243 - 08/15/03 01:47 PM Re: 2004 HMDA and Ethnicity
Ski Offline
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South Louisiana
Yesterday I e-mailed "hmdahelp@frb.gov" with the following question:

Beginning in 2004 we must collect ethnicity and race information on applicants where required. If an applicant selects Code 1 Hispanic or Latino, do they also need to select one of the race categories? Put another way, is Hispanic or Latino just ethnicity or is it ethnicity and race at the same time? Will the FFIEC software allow for the selection of Ehtnicity Code 1 and no Race Code?"

The answers received this morning:

"Race and Ethnicity are mutually exclusive. They are NOT synonymous for purpose fo HMDA reporting. For further information review the documentation available at http://www.ffiec.gov/RegC.htm"

Hope this helps.

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#106244 - 08/15/03 02:22 PM Re: 2004 HMDA and Ethnicity
Don_Narup Offline

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I think the confusion lies in that the FRB published a Transition Rules Summary for applications received before 1/1/2004.

On Page 12 it states that:
"The rules in the final comment for converting information on race and national origin collected under the current regulation to the revised categories for ethnicityand
race under the 2002 revisions are provided in tabular format in response to commenters’requests."

It then has a table that shows the "CONVERSION RULES"

and indicates that The current code 4 Hispanic adds a new Ethnicity code of 1 (Hispanic or Latino) and the New Race Category should be reported as code 7 "Not Applicable"

IMO this applies only to applications received prior to 1/1/2004 but originated after 1/1/2004

http://www.ffiec.gov/hmda/pdf/transitionrules.pdf

Again IMO Applications received after 1/1/2004 would indicate both a Race and Ethnicity code.

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#106245 - 08/15/03 04:54 PM Re: 2004 HMDA and Ethnicity
Way Out West Offline
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Sorry, everyone, but I've read this thread about 5 times (plus the reg, the supplementary info and the FFIEC training materials) and I'm still confused. Can someone please answer in words of one syllable that an idiot like me can understand? On a face-to-face application taken after January 1, 2004, if an applicant indicates his or her ethnicty is Hispanic or Latino (HMDA ethinicity code 1) and leaves the race portion of the GMI section of the application blank, is it permissible for a lender to leave the race portion of the LAR blank? Yes or no?

If the answer is no, what do we enter? As I understand it, the race field cannot be empty, but as I read it, race code 7 (NA) is NOT to be used on applications taken after 1/1/04 if the applicant is a natural person.

Thanks everyone.
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#106246 - 08/15/03 05:00 PM Re: 2004 HMDA and Ethnicity
Deena Offline
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Quote:

On a face-to-face application taken after January 1, 2004, if an applicant indicates his or her ethnicty is Hispanic or Latino (HMDA ethinicity code 1) and leaves the race portion of the GMI section of the application blank, is it permissible for a lender to leave the race portion of the LAR blank? Yes or no?






No

Quote:

If the answer is no, what do we enter?




If the applicant does not provide the information and the application is taken in person, the lender is required to note the data on the basis of visual observation or surname.

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#106247 - 08/15/03 05:05 PM Re: 2004 HMDA and Ethnicity
Don_Narup Offline

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Jeffery
I'm not going to pose as the final authority but IMO after 1/1/2004 you will enter both a Race and Ethnicity code for everyone Latino or not.

If you take an app prior to 1/1/2004 but do not close the loan until after 1/1/2004 then you will use the transition rules which calls for a Race code of 7 (NA)if someone indicate their ethnicity is Hispanic/Latino.

The reasoning is the Ethnicity code does not go into effect until 1/1/2004. Applications dated prior to 1/1/2004 have a Race code of 4 indicating Hispanic, but no Ethnicity code.

On 1/1/2004 the Hispanic Race code dissapers, and the Ethnicity code goes into efect.

The transition rules compensate for the change in coding on applications taken prior to the changes going into effect and originating after the changes are in effect.





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#106248 - 08/15/03 06:02 PM Re: 2004 HMDA and Ethnicity
Way Out West Offline
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Thanks for a partial answer, but again, what do we enter for race for a person of Hispanic ethnicity if the applicant leaves it blank? Hispanic and what? What if the applicant appears to me to be only Hispanic and nothing else -- which I suspect is going to be the case 99% of the time? I do understand the part about "lender must note based on visual observation or surname," but what if we flat out can't tell what the person's "race" is other than Hispanic? Sorry for being dense here.

Thanks again.
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#106249 - 08/15/03 06:22 PM Re: 2004 HMDA and Ethnicity
IUalum Offline
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I'm right there with you Jeff. I can't imagine any of the Hispanics we have around here identifying with ANY of those race categories.
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#106250 - 08/15/03 07:06 PM Re: 2004 HMDA and Ethnicity
hmdagal Offline
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That question was asked several times in different ways at the Fed training session a week ago. The presenters did not give us any guidance on what would be an appropriate race category for an hispanic person. They did hint that there may be guidance coming out in the future, but that was about all the information we could get.

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#106251 - 08/15/03 07:58 PM Re: 2004 HMDA and Ethnicity
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Here's my semi-frivolous suggestion. Get HUD Secretary Mel Martinez to file a loan application after 1-1-04, and ASK HIM what he wants you to put in the race and ethnicity fields. Then, broadcast his instructions to the BOL universe.
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#106252 - 08/15/03 08:09 PM Re: 2004 HMDA and Ethnicity
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Hmm, that is a puzzle. According to the 2000 Census, of those indicating they were Hispanic,

48% identified their race as White,
2% as Black,
1% as American Indian or Alaskan Native
<1% as either Asian or Pacific Islander
6% as more than one race
42% as some other race - which we all know is no longer an option

That means 42% of Hispanic customers won't see a race listed that they identify with. That sounds like a pretty big problem to me.
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#106253 - 08/15/03 08:14 PM Re: 2004 HMDA and Ethnicity
IUalum Offline
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Well, I emailed hmdahelp@frb with the problem and they wrote me back to tell me I was looking at the slide wrong. Let's see a show of hands--who all here is seeing the slide wrong?

I'm going over to the bar thread on the watercooler forum!
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#106254 - 08/15/03 08:34 PM Re: 2004 HMDA and Ethnicity
Don_Narup Offline

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Ok this isn't as difficult as it sounds. If it were I making the decision I would identify the race of Filipinos and anyone in the pacific area of Hispanic origin as Asian/PI.

Those of color from the Caribbean and Some South American countries as Black. Although there are many South Americans that would be considered Caucasian.

Mexicans would be White which I know they won't like but they are mostly a descendent's of a Hispanic European Caucasian stock.

Spaniards from Spain would be Caucasian

Now before the rocks are thrown, please understand that these classification are not new and have always been part of the census

There are only the Races listed. period. Everyone falls into one of those categories. The census lists population by these race categories. Hispanic has never been a race category in the US Census.

What the census has done however is break out of each of the Race categories the number of those in each race category that were of Hispanic ORIGIN.

The new HMDA rule now equates more closely to how the census data is gathered and counted.
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#106255 - 08/15/03 08:42 PM Re: 2004 HMDA and Ethnicity
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Quote:

Well, I emailed hmdahelp@frb with the problem and they wrote me back to tell me I was looking at the slide wrong. Let's see a show of hands--who all here is seeing the slide wrong?





Regardless of what the slide says, or what it is supposed to say, we will still be faced with Hispanic applicants who will mark ethnicity only and refuse to mark race and we will still be required, in a face-to-face interview to pick a race for them.

Don is probably right in his analysis of how to pick the race, but the end result is going to be unhappy customers. When the applicant signs the final application at closing, there will be a race code they didn't pick.

If you ask me, and of course you didn't, I think this whole thing of asking for, recording, and in general categorizing people by race is just plain nuts!!!
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#106256 - 08/15/03 08:43 PM Re: 2004 HMDA and Ethnicity
IUalum Offline
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But Don, at the beginning of this thread you said:
Quote:

No they do not have to enter a race if they indicate ethnicity is Hispanic. They do need to enter a Race code if not Hispanic.




Were you strictly talking about during conversion or after 1-1-04?
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#106257 - 08/15/03 08:49 PM Re: 2004 HMDA and Ethnicity
Don_Narup Offline

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Yes that is the Transition Rule for applications taken before 1/1/2004 but originated after 1/1/2004.

The rule for applications taken after 1/1/2004 will require a Race and Ethnicity code.

Thats how I'm reading it but the way the regulation has been presented is totally confusing. So I'm hanging my hat on the above but leaving the door open to more clarification from regulators.

We really need Anymous Regulator to jump in here but I haven't seen any post from him/her in awhile.
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