I have searched through many threads about the issue of GMI collection for HELOCs and understand Reg. B requires it for purchase and refi transactions if we have knowledge of the purpose.

Here is my question - we have a customer with an existing HELOC and they want to refinance it and raise the credit limit for future use. Would we collect GMI under Reg. B on this? I think so but want to make sure.

Also, my understanding is since we are a HMDA reporter for closed-end loans, we can use either the "old" GMI form or the new DI form with disaggregated information for the HELOCs. Is that also correct?

Thank you for your help!

If you are not required to collect under HMDA, I do not think it is a two way street:

7. Data collection under Regulation C. For applications subject to § 1002.13(a)(1), a creditor that collects information about the ethnicity, race, and sex of an applicant in compliance with the requirements of appendix B to 12 CFR part 1003 is acting in compliance with § 1002.13 concerning the collection of an applicant's ethnicity, race, and sex information.

Thanks, Randy -

I am self-admittedly dense so I apologize for not understanding your response.

It appears you agree that my HELOC scenario is a refinance and subject to Regulation's B requirement regarding collection of ethnicity, race, and sex information.

We are required to report closed-end HMDA loans so use the disaggregated DI form for collection. However, we do not have to report open-end (HELOC) as we do not originate enough of them. So, are we allowed to use the Reg. C DI form for HELOCs (purchase/refi) or do we have to collect only the information under Reg. B?

Well I think is comes down to :

a creditor that collects information about the ethnicity, race, and sex of an applicant in compliance with the requirements of appendix B to 12 CFR part 1003

Since you are not subject to collection under 1003, I think that leaves you with the 1002 requirements.

But others may have another opinion and I am open to those.

Anon: It seems you have two questions: 1) Is this scenario a "refinance" that requires GMI collection under Reg B and 2) can you use either HMDA DMI or Reg B GMI.

I don't see where Randy answered your first question and you seem to be following it up in your reply, but I believe from prior threads that Randy is in the camp that a HELOC replacing a HELOC is a refi (assuming all conditions of a refi are met, of course). Maybe I'm wrong, but I'm thinking your question may stem from the whole "purchase money" debate as some on this site have argued in the past that if you are refinancing a HELOC that was never used as purchase money, the new HELOC wouldn't require GMI. In short, I'm in the same camp as Randy and agree that a HELOC replacing a HELCO is a refi that requires GMI. If anyone needs more background on the "purchase money" discussion, here is a thread that gets into the details: https://www.bankersonline.com/regulations/12-1002-013

Now, for your second question, I do think it is a two way street - meaning, as a non-HMDA bank, you can choose to collect GMI (just the aggregated categories) or Demographic information (disaggregated categories) that were introduced under HMDA appendix C.

Randy, I can see where you are coming from on comment 7, but I don't think that was the intention. The preamble to the final rule says there was only one public comment about comment 7, and they don't explain it from the angle you are looking at it. The preamble talks multiple times about giving non-HMDA banks an "option" and even talks about how it wouldn't be fair to require DI for non-HMDA banks, and that is why "the Bureau is therefore not requiring the collection of disaggregated categories for Regulation B-only creditors." To me, this implies that it is optional, which is supported several times in the preamble. For example: "while entities that do not report under Regulation C but record and retain race and ethnicity data under Regulation B will have the option of recording data either using the existing aggregated categories or the new disaggregated categories."

Unless I'm missing something, I see it as Reg B-only banks have the choice of collecting GMI or DI.

Thanks - Adam. No arguments from me. I was just going from a literal reading of the regulation, but the preamble appears to fully cover that you have the option.

Thank you both!

Thank you both!