Customer dropped off an application with one of our loan assistants, but our loan officer never spoke with the customer in person. If Race was left blank, can we still use visual observation to fill it in?

No. What the customer did, or in this case, did not give you on an application that was mailed/dropped off, is what you report.

Ok, so we just treat it as a a mailed/emailed application? I wasn't sure if our loan assistant qualified to make that observation, or if it HAD to be the loan officer.

The assistant didn't TAKE the application in the sense that Reg C talks about taking an application which means sitting and talking with the customer. She just took a piece of paper from someone and delivered it to the LO. If the LO had sat down with the customer to talk and complete the form, then you could go with visual based on 'meeting with the customer any time during the application process.'

Perfect! Thank you Truffle, I appreciate it!

Agree with TR.

How different the regulations are. TR quoted HMDA -

for ECOA, the time-clock starts counting when the application is given to someone in the bank - not necessarily the LO.

I wasn't quoting any Reg regarding timing, Rocky. I was just speaking to the face to face vs mail/dropped off aspect that George asked about.

As for ECOA, Reg B, the clock start isn't necessarily that clear cut. It starts when the bank receives a completed application containing all the information they deem necessary to make a credit decision. That could be just the 1003 or it could include supportive documentation. There's a thread in the lending forum that addresses that topic in minute detail.

Here's a thread that might be helpful to explain what Truffle is addressing on "completed applications" and the 30 day clock:
https://www.bankersonline.com/forum/ubbt...lation-b#UNREAD

Ok. SO is there anywhere in the REG that states you can only gather the information at INITIAL application. I had a loan where the loan was mailed in, the borrower stated did not wish to furnish, but during the approval time frame, the LO met with the borrower and put the information down due to a subsequent (non -application ) meeting.

We were dinged by the auditors for submitting the info on our LAR because AT the time of application, we did not collect it. We were told that it had to be only at initial application.

I cannot cite anywhere where this reasoning lies.

Any takers??

Andy has a citation in this thread.

Thanks Truffle.

So we were cited incorrectly, as we CHOSE to gather it.

auditors or examiners? auditors can only point out potential issues. Examiners can cite you. If you were cited, I'd love to hear the logic they used to support their stance.

It was not an examiner. We were cited on our auditors examination for this. They said it was a violation and put it as an error on our audit.

It's also a good idea to have a consistent process.

Clareb, I don't think you were cited incorrectly. I'm betting the auditor is going with the interpretation of the Reg which supports collecting the information if you meet with the borrower at any time during the APPLICATION process. (see Andy's citation that includes the following: If the meeting occurs after the application process is complete, for example, at closing, the institution is not required to obtain monitoring information.")
At closing is not during application.
There is a school of thought that believes that you're skewing the information if you follow your process.
Consider loans that you never see the applicant vs ones that close when in both situations the applicant choses not to complete the GMI (soon to be demographic information.)
imho, both applications should be reported the same as information not provided at time of application.
But whichever way you decide to go, you need to be consistent and able to support your logic or your auditors, and maybe even examiners, will take issue with it.

Clareb, part of the issue may be in the understanding of application process.

IMHO, application process for HMDA is completing the request for credit. (Think of a paper application - when it is complete with all the information requested, that is the end of the request for credit.)

Application for ECOA is completing the evaluation process.

Truffle said: There is a school of thought that believes that you're skewing the information if you follow your process.

I've had a few conversations with examiners about this too. If you collect GMI at closing, you're skewing your collection by having it on all loans. But you don't always get it on denials, withdrawals, incomplete and ANA applications. Some examiners have said this raises a red flag in fair lending reviews.

I've always recommended you NOT collect GMI at closing for this reason. The 2018 rules provide more clarity on this and state that it only applies during the "application process" and only if the applicant doesn't mark the "I do not wish" boxes.