Does GMI have to be collected on a co-borrower? Is this addressed in the reg?

Yes, co-borrower GMI should be collected. From the GIR:

Applicant Information
Ethnicity, race, and sex of the
applicant. Report ethnicity, race, and
sex both for loans that you originate
and for loan applications that do not
result in an origination. At your option,
you may report those data for loans
that you purchase. Report the data
for the applicant and for the CO-APPLICANT,
if there is one. If there is no
co-applicant, use the numerical code
for “no co-applicant” in the “coapplicant”
column. For more information,
see Appendix A, I.D., Appendixb)

(From Reg. B, 202.13(2)(b), if you were referring to this from a Reg. B perspective.)

Obtaining information. Questions regarding ethnicity, race, sex, marital status, and age may be listed, at the creditor's option, on the application form or on a separate form that refers to the application. The applicant(s) shall be asked but not required to supply the requested information. If the applicant(s) chooses not to provide the information or any part of it, that fact shall be noted on the form. The creditor shall then also note on the form, to the extent possible, the ethnicity, race, and sex of the applicant(s) on the basis of visual observation or surname.

B, and the staff comments to Regulation
C § 203.4(a)(10).

Thanks, sorry I failed to mention we are not a HMDA reporting FI, but we still need GMI on co-borrowers?

Yes.

I would think since the Reg. B rule uses the term "applicant(s)", this implies both the borrower and co-borrower.

You will need to follow the rules under Reg. B 202.13 and its Commentaries.

Thanks Dan, Now the loan officer is telling me the GMI was not obtained because co-borrower was not going to be living in the house. Shouldn't he document this on the app as to why GMI was not obtained?

The loan officer is correct. If the dwelling will not be the co-borrower's primary dwelling then GMI would not be collected on them. Under Reg B it's only required for the applicants that the dwelling will be their primary dwelling.

You are also correct this fact should be documented; otherwise how will you, an auditor or examiner know the property is not, or was not intended to become the co-borrower's primary dwelling.

Thanks again!