I obsess over little inconsistencies. In the CFPB's online HMDA FAQ under "Ethnicity, Race and Sex," about how to report DI on a phone, internet, or mail/fax application and the applicant does not provide the information the answer literally seems to make no sense when comparing it to the instructions in Appendix B. (Q7)

Appendix B goes into great detail about when we must collect the information during subsequent face-to-face meetings with an non-face-to-face applicant prior to final action being taken. The answer to the FAQ seems to blithely ignore all that and says, in part,

"Where a natural person applicant does not provide ethnicity, race, or sex information for a mail, internet, or telephone application, and a financial institution does not have an opportunity to collect this information during an in person meeting during the application process, the financial institution may report either that the information was not collected on the basis of visual observation or surname (code 2) or that the requirement to report this data field is not applicable (code 3).

So, I feel I have to interpret this in light of how I read Appendix B. I'm telling my folks, the only time you ask for this information in a telephone setting and they chose to skip it, is if you meet face-to-face with the applicant to finish up an incomplete application. If you meet up after the application is complete and before action is taken, don't ask for it again even if you see them at loan closing.

Does anyone agree or disagree with me?

I fail to see any inconsistency or maybe I am not understanding. If you have yet to make a decision, you are still within the application process whether you feel you have a complete application or not.

I agree with Randy and I too don't see an inconsistency.

Keep in mind that the FAQ is only talking about how to complete the field for whether the information was collected on the basis of visual observation or surname. Completing that field was a discussion we had a few times on these threads before and went back sort of a discrepancy (lack of clarification/consistency) between Appendix B and an old "N/A Chart" (which was sort of rolled into the FIG). IMHO, FAQ 7 was just clarifying a discrepancy on how to complete this field when you never see an applicant in person. In short, one camp felt that if you don't see an applicant, the old "NA chart" (basically now the FIG) wanted you to use code 2 to reflect that the information was not collected on the basis of visual observation or surname. The other camp felt that if you didn't see an applicant in person, that field wouldn't apply at all (code 3/NA) because there was no visual observation to be made. It is sort of a complex discussion, but here is a messy thread that explains the argument (and camps) a bit more: https://www.bankersonline.com/forum...ected-on-the-basis-of-visual-observation

So to me, you still follow Appendix B on how you collect the information as FAQ 7 really only clarifies how to report whether the information was collected on the basis of visual observation or surname.

I think this points me in the right direction. Thanks for taking the time to reply, Randy and Adam!