If the bank previously reported Denial Reasons in past years, which is optional reporting, can we switch to no longer reporting it for 2014 loans?

Is there anything we need to do/keep in mind if we choose to no longer report them?

Don't forget that is on the proposed list of changes to Reg C/HMDA that everyone will be required to report the denial reasons.

They compare your last year's LAR to the current one so be ready with an answer in case you're asked why you stopped reporting denial reasons. In light of the changes looming on the horizon, I wouldn't stop reporting this item. You're only going to have to retrain people to do it again in another year or two.

Agreed. We collect them on every HMDA reportable loan, we just don't report them....... yet

I would not report them.

If you report them and they are wrong, you have an error. If you collect the denial reasons and not report them, you know the information for analytical purposes, but cannot get tagged with a mistake. For proposed changes, you are ready, just not sending it along to big brother. And as an response - it's optional and a decision was made not to report. Why - one less field to worry about.

My answer was based on the fact that they are already reporting the denial reasons. Why stop now? You've got the training in place. I'd work on a good scrub and keep personnel trained so I don't have to reinvent the wheel in another year or so. And this is from the woman who took the opportunity to not geocode everything because I only have one MSA. But my people weren't trained to do it so I just kept the status quo, not changed it knowing I'd have to change it back again. That's jmho based on the years I've been doing this and how hard it is to train staff appropriately.

If you are intending to conduct a Fair Lending Risk Assessment (which is strongly advised given that regulators are expecting banks to be monitoring their Fair Lending risk) you not only should be collecting the reasons for denial, you should be collecting and compiling credit score, LTD, DTI, etc. so you can conduct an automated Fair Lending Risk Assessment. The time is coming when it will be mandatory, but even now examiners are expecting a risk assessment to be conducted and it is impossible without knowing and maintaining the reasons for denial. So my advice is don't stop collecting and reporting the reasons for denial.

I am glad someone besides me has said that this type of data (including Geocoding) is needed for lending assessments, even if you are not required to collect for HMDA because of location, etc.

You can't defend the bank without the data.

@ geocoding, Kaybee

We would not stop collecting and will most likely continue to report. It is a matter of getting the reasons for denial to match up with the statement of denial at this point, since there are 2 separate entry points in our current LOS for the form and HMDA data collection.

Thanks everyone for your responses!

We collect all of that information and use it four fair lending assessments... we just dont report the denial reasons.