We made a loan to a trust (husband and wife formed trust, trust purchases primary home). On the government monitoring information, we recorded race and sex for applicant as not applicable since the trust is not a "natural person". We also recorded the occupancy as non-owner occupied. Internal auditors disagree and say that we should record the race and sex of the husband and wife as though they applied for the loan as borrower and co-borrower and ignore the trust aspect. Following their thinking, they also state the HMDA Lar should reflect occupancy as owner occupied. Help...

Wrong! You made a loan to a Trust. A Trust doesn't have a race or sex. IF, the husband and wife signed only as trustees. If they signed personally, then you did make a loan to them personally and would need to record their personal info.

I agree with you. You may ask your internal auditors what they used to make their determination. I haven't found anything in the reg that would lead me to believe that race and gender for beneficiaries of a trust should be reported in the HMDA LAR. Did they also request income?

This would not be reportable, the Trust doesn't have a Race. This area was also discussed by Phil Gay in the HMDA Webinar hosted by BOL. Partnerships or businesses could also fall into this same arena.