One question about the new HMDA rules. When taking an application over the telephone if the applicant denies giving us the monitoring information is that the end of the process. Should we just fill in information not provided? Would we have to fill in that section when the applicant comes in to close the loan? If we know the customer should we fill it in? As in a face to face application if they do not furnish it we must fill it in based on our observation. Everyone comes face to face at some point during the process. Does this specifically relate only to the application process and no further?

From HMDA Getting it Right.

3. Applicant data—application completed in person. When an applicant meets in person with a lender to complete an application that was begun by mail or telephone, the institution must request the monitoring information. If the meeting occurs after the application process is complete, for example, at closing, the institution is not required to obtain monitoring information.(Appendix A of this part, Paragraph V.D.)

What page is that on? Is there a new HMDA Getting it right book out?

D-12 of GIR

The Getting it Right book has not been modified to address the new requirements (at least not that I'm aware of). So with that said, and this from the Final Rule:

Appendix B was modified to read as follows in Section I.B.4.:

You must ask the applicant for this information (but you cannot require the applicant to provide it) whether the application is taken in person, by mail or telephone,
or on the Internet. For applications taken by telephone, the information in the collection form must be stated orally by the lender, except for that information which pertains uniquely to applications taken in writing. You need not provide the data when you take an application by mail or telephone or on the Internet, if the applicant fails to answer. You should indicate whether an application was received by mail, telephone, or the Internet, if it is not otherwise evident on the face of the application. (emphasis added).

I would say in this case, the rule wins out over the GIR booklet. But that's just my opinion. I could be wrong.

Isn't this saying the same thing with a slight twist. In this question, the applicant refused to provide the info over the phone. You don't see them until closing. It isn't necessary to log the GMI.

The twist would appear to be under Jim's cite that it can be over at the point data is refused. The GIR indicates that any other contact in the middle should cause the GMI to be collected.

The thrust is to get more GMI. I wouldn't be surprised to see a commentary lead us to that same conclusion later. That said, a few paragraphs above Jim's cite, there is this:

"Appendix B Instructions for Data Collection [Effective as of January 1, 2004]
B. Inform the applicant that the federal government requests this information in order to monitor compliance with federal statutes that prohibit lenders from discriminating against applicants on these bases. Inform the applicant that if the information is not provided where the application is taken in person, you are required to note the data on the basis of visual observation or surname."

So I'm not sure we are in a different place. Personally, if we did the closing (not off-site or by a third party) I'd want the data collected whenever I could get it. As the HMDA scrubber, I want to see those holes filled with accurate data, not exceptions.

Andy, I still don't think its required. In your cite, the key words are "where the application is taken in person." Then in the next paragraph (my cite) they go on to clarify that if it is not provided in a telephone (or internet or mail) application, no further action is necessary except to code the application as information not provided and as a telephone application.

Reg B prohibits collection of race and sex information except where required otherwise by law. If you requested the race and sex information in a telephone application, and the borrower refuses to provide, you have no futher requirement to document that information. If you subsequently do collect that information based on visual observation and note that in the loan file, it could potentially be argued that you have just violated Reg B. This is far-fetched, I know, but not impossible. I've seen interpretations more far-fetched that this from examiners. As such, since I'm not required to take further action, I'm not planning to take further action. Then I minimize any risk I have on this front and stay in compliance with the requirements of the reg.

While I don't believe my philosophy will change, I better see your point, especially on the Reg. B issue. If an examiner said that to me, I'd shake my head back and forth and say "what are you thinking". And since I have, in the past, shaken my head and thought to myself, "what are they thinking", yes, I could see it happening. (Hopefully your comments won't prompt them to now think, "hey, what a great idea".)

And in the interest of fairness to examiners (yeah, I know, I know), I've also seen some really off-the-wall interpretations from compliance officers, too. The examiners don't have a monopoly in this area by any stretch of the imagination.

Our position reflects that stated by Jim Bedsole and examiners (OCC) have not questioned it. With January 1, 2003 change that requires lenders to request this information when taking a telephone application, we looked for guidance on whether the lender will be required to note the sex of the applicant(s) based on name or "voice observation".

Although we have not found anything that says we can or need to provide the sex of the applicant, we did find an interesting statement in the last edition of the ABA Bank Compliance magazine. The following quote is taken from The HMDA Dragon Awakens article, page 30. The article was written by Charles Cabler & Phil Gay.

"They (lending personnel) should be cautioned not to make assumptions about race, national origin, ethnicity due to voice, speech manner, etc."

I found it interesting that they made the statement about race, national origin and ethnicity, but excluded mentioning sex (intentionally?). To me, it implies that someone may want or expect lenders to identify Susan as female and Sam as male, even though they decline to provide the GMI.

Unless better clarification is made on this, we will not be completing any GMI on a telephone application if the applicant declines to provide it.

...opinions are mine and not that of my employer, spouse, regulator, etc., etc.

We were written up for violations for applications that we did not have GMI for even though it inicated that the apps. were taken over the phone or in the mail. The examiners would not drop that you saw the applicant at some point and should have got the information.

I agree that prior to Jan 1, 2003, the GIR comment is the governing interpretation and it does require you to note the information if you meet with them applicant later in the application process. However, my citations are effective 1/1/03 and after that point I would show this to any examiner that tried to write me up for not having the information when the customer elected not to provide in a telephone application.

I was reading today in the CRA/HMDA Reporter the following:
"2003 Data - Refusals: If telephone applicants refuse to provide their monitoring information, treat their refusals as you would mail or Internet applications. Use code 7 for race or national origin and code 3 for sex."

So the answer would be we do not need to complete the GMI on a phone application if the applicant refuses at that time.

That is my opinion, at least.