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Bureau updates HMDA FAQs
The CFPB has published a response to a frequently asked HMDA question: 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? It's question 7 in the "Ethnicity, Race, and Sex" group on the Bureau's HMDA FAQs.
The Bureau's answer?—If the financial institution doesn't have an opportunity to collect this information during an in-person meeting in the application process, the financial institution may report either that the information was not collected on the basis of visual observation (code 2) or that the requirement to report this data field is not applicable (code 3). For consistency of data across all reporters, the CFPB suggests (but doesn't require) that code 2 be used.