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#2151886 - 11/01/17 11:49 AM Collecting for Possible 2018 Loans
terpsfan Offline
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Joined: Feb 2007
Posts: 1,894
For loan applications that are not reportable for 2017 but will be for 2018 should we be collecting monitoring information now in case they close in 2018?

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#2151888 - 11/01/17 11:57 AM Re: Collecting for Possible 2018 Loans terpsfan
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 76,433
Galveston, TX
For example, if a financial
institution receives an application on
November 15, 2017, collects the
applicant’s ethnicity, race, and sex in
accordance with the instructions in
effect on that date, and takes final action
on the application on January 5, 2018,
the financial institution has complied
with the requirements of
§ 1003.4(a)(10)(i) and (b), even though
those instructions changed after the
information was collected but before the
date of final action.
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#2151890 - 11/01/17 12:24 PM Re: Collecting for Possible 2018 Loans terpsfan
terpsfan Offline
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What if we did not collect on a application but closing is delayed into 2018 and is now reportable? Do we report "information not provided"?

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#2151891 - 11/01/17 12:45 PM Re: Collecting for Possible 2018 Loans terpsfan
rlcarey Offline
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Posts: 76,433
Galveston, TX
Yes. You either collected or did not collect based on the 2017 rules.

Paragraph 4(a)(10)(i)

2. Transition rule for applicant data collected prior to January 1, 2018. If a financial institution receives an application prior to January 1, 2018, but final action is taken on or after January 1, 2018, the financial institution complies with § 1003.4(a)(10)(i) and (b) if it collects the information in accordance with the requirements in effect at the time the information was collected.
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#2158082 - 12/21/17 05:33 PM Re: Collecting for Possible 2018 Loans terpsfan
Kompliance Offline
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Joined: Aug 2012
Posts: 44
Pennsylvania
So now I am confused by this because I thought the "transition rule" just referred to asking the applicant(s) for the old GMI data in 2017 vs the expanded data in 2018.

For example, we have an application for a dwelling secured credit card consolation loan that the app was taken in 2017. GMI was not collected at application because according to 2017 rules, that is not a HMDA reportable loan. Fast forward, and the loan is scheduled to close in 2018, which would make it reportable on the 2018 HMDA LAR. We do not have the GMI information to report it.

I feel like the only option is to collect this information from the customer at or before closing in 2018. Because we can't mark it as "information not provided by the applicant" if we never asked them for it. Furthermore, if it was a F2F app, I believe our software will throw a validity error if the URLA is marked face-to-face and we try to report Information not Provided on the LAR.

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#2158100 - 12/21/17 07:14 PM Re: Collecting for Possible 2018 Loans terpsfan
Banker K, CRCM Offline
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Joined: Jan 2010
Posts: 284
Oklahoma
In our HMDA training to the officers, we have stated we (Compliance) will be sending an EOY email to them and to centralized loan documentation to go through any loans in process and determine which loans will not be closing in 2017.
Any closing in 2018 that will become HMDA as of their 2018 action date will need to provide the customer with a GMI form at that time (the time it's determined the 2017 non-HMDA loan is going to actually be a 2018 HMDA loan).

There is a discussion on a different post in this forum about this but I don't remember off hand where it is.
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#2158116 - 12/21/17 07:58 PM Re: Collecting for Possible 2018 Loans terpsfan
David Dickinson Offline
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David Dickinson
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Posts: 18,754
Central City, NE
Quote:
For example, we have an application for a dwelling secured credit card consolation loan that the app was taken in 2017. GMI was not collected at application because according to 2017 rules, that is not a HMDA reportable loan. Fast forward, and the loan is scheduled to close in 2018, which would make it reportable on the 2018 HMDA LAR. We do not have the GMI information to report it.

The CFPB has issued advise on this scenario. It basically says, you must have GMI or DI for ALL applications subject to HMDA that have action taken in 2018.

Here's the Commentary to Commentary to §1003.4(a)(10)(i) #2. (Italics is verbatim. Non-italics is me putting legalize into plain English)

If a financial institution receives an application prior to January 1, 2018, but final action is taken on or after January 1, 2018, the financial institution complies... if it collects the information... under the 2017 rules. For example, if a financial institution receives an application on November 15, 2017, collects the applicant’s ethnicity, race, and sex... under the 2017 rules ...and takes final action on the application on January 5, 2018, the financial institution has complied... even though those instructions changed after the information was collected but before the date of final action. However, if... the financial institution collected the applicant’s ethnicity, race, and sex on or after January 1, 2018... the financial institution... must collect the information under the 2018 rules.

If you don't have GMI/DI and you close a loan in 2018, you'll need to collect it whenever you see them next (possibly at the closing today - which I am against otherwise).
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#2158894 - 01/02/18 05:37 PM Re: Collecting for Possible 2018 Loans terpsfan
Frank Ernest Offline
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Joined: Nov 2004
Posts: 138
Somewhere on a beach
I know that we only report monitoring information based on the 2017 rules if the application was taken in 2017 but what about the remaining new information? For an application taken in December 2017 but originated in January 2018, do we have to report the debt to income, credit score relied on, interest rate loan term etc, or do we report NA?

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#2158898 - 01/02/18 06:09 PM Re: Collecting for Possible 2018 Loans terpsfan
cgorham Offline
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Posts: 120
If action is taken in 2018, you report everything based on the 2018 data points. So yes, you would have to report the DTI, credit score, rate, etc. The only flexibility they gave for transition files is that you do can report the old demographic information and do not have to worry about the dis aggregated information if the application was taken in 2017 but action taken occurs in 2018.

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#2159152 - 01/04/18 02:23 PM Re: Collecting for Possible 2018 Loans terpsfan
Kompliance Offline
Junior Member
Joined: Aug 2012
Posts: 44
Pennsylvania
So David, now I have a new situation where the credit card consolidation home equity loan was applied for in 2017, so it was not reportable for HMDA and GMI was not collected. The loan was denied based on DTI yesterday, in 2018. I feel really weird about going back to the customer and asking for their GMI information after we sent them an Adverse Action Notice for this loan... But I also feel weird about marking "I do not wish to provide.." because we never asked the applicants for this information either.

Ugh. I hate this.

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#2159159 - 01/04/18 03:23 PM Re: Collecting for Possible 2018 Loans terpsfan
cgorham Offline
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Posts: 120
You are not really marking "I do not wish to provide..". That is what is on the demographic collection form, and I assume you do not have one on that application. You would just be marking "Information not provided by applicant..." on the LAR, which I feel is accurate for that situation.

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#2159231 - 01/04/18 08:02 PM Re: Collecting for Possible 2018 Loans terpsfan
David Dickinson Offline
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David Dickinson
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Posts: 18,754
Central City, NE
If I understand correctly, you didn't see the applicant in 2018. I don't think it's appropriate to mark "I do not wish". I would not go back to the customer now. I would record the codes for application not in person.
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#2159278 - 01/04/18 10:14 PM Re: Collecting for Possible 2018 Loans David Dickinson
Carolina Blue Offline
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Carolina Blue
Joined: Jul 2005
Posts: 951
Lost in a regulatory fog
Quote:
For example, if a financial institution receives an application on November 15, 2017, collects the applicant's ethnicity, race, and sex in accordance with the instructions in effect on that date, and takes final action on the application on January 5, 2018, the financial institution has complied with the

So we took a straight cash out home equity application in December which was not HMDA reportable at the time, then why wouldn't we be compliant if we report the race, ethnicity, and sex as NA?

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#2159876 - 01/09/18 09:58 PM Re: Collecting for Possible 2018 Loans Carolina Blue
Compliance Buzz Offline
Gold Star
Joined: Feb 2002
Posts: 319
NJ
Quote:
So we took a straight cash out home equity application in December which was not HMDA reportable at the time, then why wouldn't we be compliant if we report the race, ethnicity, and sex as NA?


We tried that and it results in a validity error when we also report the age of the borrower/co-borrower. We switched it to Code 3's and 6's for Not provided and the error cleared.

(ours was also a denial early January that we're not going back to the customer on)
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#2160313 - 01/12/18 03:40 PM Re: Collecting for Possible 2018 Loans terpsfan
RR Joker Offline
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Posts: 20,639
The Swamp
I don't think anyone will get killed over doing those [likely very few] equity loans however you have to to clear the system. Collection was not required/allowed for those in 2017. You may have had zero control over the action taken date [unless you were at the tail end of 2017] so there is no lie in coding ' not provided' because quite frankly...it wasn't provided! That's not the same as refused. Your system isn't likely to throw an error on that one because it doesn't know how the application was taken, unlike NA which is going to relate to entities and kick out an error.
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