An affiliate mortgage company will become a subsidiary of the bank (rather than us both being owned by the holding co.) effective 12-31-02. Will the mortgage company's 2002 loans need to be recorded on our 2002 HMDA register or will we consolidate our filing beginning with loans made January 1, 2003?

Neither. Provided the mortgage company is still a sepaate entity, they will continue to report separately. However, they will now submit their report as if they were an OCC institution, instead of as a non-regulated entity as they did previosuly.

The key is that they will be a sub. of the bank, an entity of their own. If they were merged into the bank, as a department, your HMDA records would be consolidated.

If they were not before, they should now be included in your compliance program, especially for fair lending reviews.

So, Andy what you're saying is HMDA may be kept separate if they are a subsidiary but all other compliance issues such as fair lending, RESPA, Reg Z, CRA would now fall under the bank's responsibility.

My experience was that when our (now) mortgage dept. was a subsidiary, they were examined when we were. That is, they were tied in for compliance purposes and their files were reviewed. We did this ourselves and the examiners followed when they were here. I recall asking if they were subject to the same signage requirements. The answer wasn't necessarily definitive with a cite, but affirmative as to it was a good thing to do. We relied on them for CRA lending as well. I checked them for B, Z, HMDA, etc.

AR may have some advise if he reads this thread.