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#2261146 - 10/15/21 04:34 PM Identity Theft on Loan App
NeedtheBeach Offline
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Joined: Mar 2018
Posts: 6
We received an online loan application and quickly determined this was identity theft due to address and DOBs not matching credit report, along with known information on the customer's identity that was stolen. How do we handle this incomplete application for HMDA purposes?

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#2261151 - 10/15/21 05:43 PM Re: Identity Theft on Loan App NeedtheBeach
Rocky P Online
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Florida
I do not believe the bank received a legitimate application.
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#2261152 - 10/15/21 06:40 PM Re: Identity Theft on Loan App NeedtheBeach
RVFlyboy Offline
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Soaring over Georgia
Hmmm. Makes me think we might need to amend our application procedures to modify our definition of an application to include some language around "received from a customer who can be positively identified." That way there can be no possible expectation for HMDA or Reg B purposes that we take any action on that incomplete application other than potentially file a SAR if required.
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#2261163 - 10/15/21 10:37 PM Re: Identity Theft on Loan App NeedtheBeach
Andy_Z Offline
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HMDA does tell us an application is " made in accordance with procedures used by a financial institution for the type of credit requested." I would believe most banks will, or as Jim indicates should, have that the application must be for a legitimate purpose. ID theft would not meet that requirement and therefore the bank would not have an app. Then comes the SAR procedures...
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#2261174 - 10/18/21 02:45 PM Re: Identity Theft on Loan App NeedtheBeach
NeedtheBeach Offline
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Joined: Mar 2018
Posts: 6
Thank you everyone. Yes, I did consider the definition of application, unfortunately we don't spell it out, which I'm now recommending that they do. I'm still advising them not to report for HMDA purposes, as I believe we have a valid position and/or argument for not reporting it. We had already submitted the SAR as soon as identity theft was recognized.

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#2262138 - 11/04/21 08:24 PM Re: Identity Theft on Loan App NeedtheBeach
compgal21 Offline
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Joined: Jan 2021
Posts: 39
If it is a fraudulent, why is it considered being reported? It is not a legitimate application with no potential of origination. I would just notate that somewhere and have it on hand for examiner's and refer them to BSA if they have any questions on whether a SAR was filed or not.

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