Maybe I am late to the party, but the new URLA only allows you to select visual/surname and not visual/surname if it is a face-to-face application. If it is through the mail, internet, fax, etc, the only choice for the collection method is 3 - NA.

My understanding has always been that we only use the 3 - NA if it is not a natural person. 12 CFR 1003.4(a)(10)(i) says you collect the DI and report whether it was collected on the basis of visual observation or surname. The "Getting It Right Guide" says to use 3 if the requirement to report the DI does not apply to the covered loan or application that is being reported.

So are we supposed to use what the URLA says or what HMDA says for the collection method? Or am I missing something in Reg C?

I guess I am failing to see the connection between completing the URLA and how you report HMDA. The URLA has nothing to do with when you use Code 3 for HMDA reporting.

And, entering NA is okay for HMDA when the applicant doesn't provide anything. We had debated this a bit over the last few years, but the CFPB finally came out and said that reporting NA is okay.

See the March 6, 2020 CFPB HMDA FAQ 7 under the section of "Ethnicity, Race, and Sex and 1003.4(a)(10)(i):

[i] If a natural person applicant submits a mail, internet, or telephone application under Regulation C but does not provide race, ethnicity, or sex information, what should the financial institution report regarding whether this information was collected on the basis of visual observation or surname?

Regulation C, 12 CFR § 1003.4(a)(10)(i), requires that a financial institution collect the ethnicity, race, and sex of a natural person applicant or borrower, and collect whether this information was collected on the basis of visual observation or surname. 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).

For consistency of data across all HMDA reporting financial institutions, the Bureau suggests, but does not require, that financial institutions use code 2.

We have an online system and if it is not face-to-face, the options for yes/no on the visual/surname are greyed out. It only allows you to select yes/no for face-to-face. And of course, all this information flows into our LAR as well so I am seeing a lot of 3's when the customer actually provided the information by telephone, mail, internet, etc. That just didn't seem right to me that we got the information but then it is showing up on the LAR as NA. So I was wondering if I missed something with the new URLA and HMDA reporting.

So, do we need to go into the LAR and manually change all the 3's when it is not face to face and we were provided the information?

Of course you do - if you gathered the information from the applicant during the application process on a non-face-to-face application - how could you not report it? Sounds like you have an LOS problem.

That was what I thought but was getting some pushback so I wanted to make sure I wasn't missing something.

Thank you.

I agree that it sounds like an LOS problem as you need to report the information if it is provided to you. NA can be used (per the FAQ I provided) IF the customer doesn't provide the information, but if they provide it, you must report it.