federal reserve system 203 - ffiec.gov//hmda/pdf/regulationc.pdf · federal reserve system pt. 203,...

73

Federal Reserve System § 203.2

AUTHORITY: 12 U.S.C. 2801–2810.

SOURCE: 54 FR 51362, Dec. 15, 1989, unlessotherwise noted.

§ 203.1 Authority, purpose, and scope.(a) Authority. This regulation is

issued by the Board of Governors of theFederal Reserve System (‘‘Board’’) pur-suant to the Home Mortgage Disclo-sure Act (12 U.S.C. 2801 et seq.), asamended. The information-collectionrequirements have been approved bythe U.S. Office of Management andBudget under 44 U.S.C. 3501 et seq. andhave been assigned OMB Numbers 1557–0159, 3064–0046, 1550–0021, and 7100–0247for institutions reporting data to theOffice of the Comptroller of the Cur-rency, the Federal Deposit InsuranceCorporation, the Office of Thrift Super-vision, and the Federal Reserve Sys-tem, respectively; numbers for the Na-tional Credit Union Administrationand the Department of Housing andUrban Development are pending.

(b) Purpose. (1) This regulation imple-ments the Home Mortgage DisclosureAct, which is intended to provide thepublic with loan data that can be used:

(i) To help determine whether finan-cial institutions are serving the hous-ing needs of their communities;

(ii) To assist public officials in dis-tributing public-sector investments soas to attract private investment toareas where it is needed; and

(iii) To assist in identifying possiblediscriminatory lending patterns andenforcing antidiscrimination statutes.

(2) Neither the act nor this regula-tion is intended to encourage unsoundlending practices or the allocation ofcredit.

(c) Scope. This regulation applies tocertain financial institutions, includ-ing banks, saving associations, creditunions, and other mortgage lending in-stitutions, as defined in § 203.2(e). It re-quires an institution to report data toits supervisory agency about home pur-chase and home improvement loans itoriginates or purchases, or for which itreceives applications; and to disclosecertain data to the public.

(d) Loan aggregation and central datadepositories. Using the loan data madeavailable by financial institutions, theFederal Financial Institutions Exam-ination Council will prepare disclosure

statements and will produce various re-ports for individual institutions foreach metropolitan statistical area(MSA), showing lending patterns by lo-cation, age of housing stock, incomelevel, sex, and racial characteristics.The disclosure statements and reportswill be available to the public at cen-tral data depositories located in eachMSA. A listing of central data deposi-tories can be obtained from the FederalFinancial Institutions ExaminationCouncil, Washington, DC 20006.

[Reg. C, 54 FR 51362, Dec. 15, 1989, as amendedat 63 FR 52142, Sept. 30, 1998]

§ 203.2 Definitions.In this regulation:(a) Act means the Home Mortgage

Disclosure Act (12 U.S.C. 2801 et seq.),as amended.

(b) Application means an oral or writ-ten request for a home purchase orhome improvement loan that is madein accordance with procedures estab-lished by a financial institution for thetype of credit requested.

(c) Branch office means: (1) Any officeof a bank, savings association, or cred-it union that is approved as a branchby a federal or state supervisory agen-cy, but excludes free-standing elec-tronic terminals such as automatedteller machines;

(2) Any office of a mortgage lendinginstitution (other than a bank, savingsassociation, or credit union) that takesapplications from the public for homepurchase or home improvement loans.A mortgage lending institution is alsodeemed to have a branch office in anMSA if, in the preceding calendar year,it received applications for, originated,or purchased five or more home pur-chase or home improvement loans onproperty located in that MSA.

(d) Dwelling means a residentialstructure (whether or not it is attachedto real property) located in a state ofthe United States of America, the Dis-trict of Columbia, or the Common-wealth of Puerto Rico. The term in-cludes an individual condominiumunit, cooperative unit, or mobile ormanufactured home.

(e) Financial institution means:(1) A bank, savings association, or

credit union that originated in the pre-ceding calendar year a home purchase

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12 CFR Ch. II (1–1–02 Edition)§ 203.3

loan (other than temporary financingsuch as a construction loan), includinga refinancing of a home purchase loan,secured by a first lien on a one- to four-family dwelling if:

(i) The institution is federally in-sured or regulated; or

(ii) The loan is insured, guaranteed,or supplemented by any federal agency;or

(iii) The institution intended to sellthe loan to the Federal National Mort-gage Association or the Federal HomeLoan Mortgage Corporation;

(2) A for-profit mortgage lending in-stitution (other than a bank, savingsassociation, or credit union) whosehome purchase loan originations (in-cluding refinancings of home purchaseloans) equaled or exceeded ten percentof its loan origination volume, meas-ured in dollars, in the preceding cal-endar year.

(f) Home improvement loan means anyloan that:

(1) Is for the purpose, in whole or inpart, of repairing, rehabilitating, re-modeling, or improving a dwelling orthe real property on which it is lo-cated; and

(2) Is classified by the financial insti-tution as a home improvement loan.

(g) Home purchase loan means anyloan secured by and made for the pur-pose of purchasing a dwelling.

(h) Metropolitan statistical area or MSAmeans a metropolitan statistical areaor a primary metropolitan statisticalarea, as defined by the U.S. Office ofManagement and Budget.

[Reg. C, 54 FR 51362, Dec. 15, 1989, as amendedat 56 FR 59857, Nov. 26, 1991; 59 FR 63704, Dec.9, 1994]

§ 203.3 Exempt institutions.(a) Exemption based on location, asset

size, or number of home purchase loans.(1) A bank, savings association, orcredit union is exempt from the re-quirements of this part for a given cal-endar year if on the preceding Decem-ber 31:

(i) The institution had neither ahome office nor a branch office in anMSA; or

(ii) The institution’s total assetswere at or below the asset threshold es-tablished by the Board. The assetthreshold was adjusted from $10 million

to $28 million as of December 31, 1996.For subsequent years, the Board willadjust the threshold based on the year-to-year change in the average of theConsumer Price Index for Urban WageEarners and Clerical Workers, not sea-sonally adjusted, for each twelve-month period ending in November,with rounding to the nearest million.The Board will publish any adjustmentto the asset figure in December in thestaff commentary.

(2) A for-profit mortgage lending in-stitution (other than a bank, savingsassociation, or credit union) is exemptfrom the requirements of this part fora given calendar year if:

(i) The institution had neither ahome office nor a branch office in anMSA on the preceding December 31; or

(ii) The institution’s total assetscombined with those of any parent cor-poration were $10 million or less on thepreceding December 31, and the institu-tion originated fewer than 100 homepurchase loans (including refinancingsof home purchase loans) in the pre-ceding calendar year.

(b) Exemption based on state law. (1) Astate-chartered or state-licensed finan-cial institution is exempt from the re-quirements of this regulation if theBoard determines that the institutionis subject to a state disclosure law thatcontains requirements substantiallysimilar to those imposed by this regu-lation and contains adequate provi-sions for enforcement.

(2) Any state, state-chartered orstate-licensed financial institution, orassociation of such institutions mayapply to the Board for an exemptionunder this paragraph.

(3) An institution that is exemptunder this paragraph shall submit thedata required by the state disclosurelaw to its state supervisory agency forpurposes of aggregation.

(c) Loss of exemption. (1) An institu-tion losing an exemption that wasbased on the criteria set forth in para-graph (a) of this section shall complywith this part beginning with the cal-endar year following the year in whichit lost its exemption.

(2) An institution losing an exemp-tion that was based on state law underparagraph (b) of this section shall com-ply with this regulation beginning with


75

Federal Reserve System § 203.5

the calendar year following the yearfor which it last reported loan dataunder the state disclosure law.

[Reg. C, 54 FR 51362, Dec. 15, 1989, as amendedat 57 FR 56965, Dec. 2, 1992; 62 FR 28623, May27, 1997; 63 FR 52142, Sept. 30, 1998]

§ 203.4 Compilation of loan data.

(a) Data format and itemization. A fi-nancial institution shall collect dataregarding applications for, and origina-tions and purchases of, home purchaseand home improvement loans (includ-ing refinancings of both) for each cal-endar year. These transactions shall berecorded, within thirty calendar daysafter the end of each calendar quarterin which final action is taken (such asorigination or purchase of a loan, ordenial or withdrawal of an application),on a register in the format prescribedin Appendix A of this part and shall in-clude the following items:

(1) A number for the loan or loan ap-plication, and the date the applicationwas received.

(2) The type and purpose of the loan.(3) The owner-occupancy status of

the property to which the loan relates.

(4) The amount of the loan or appli-cation.

(5) The type of action taken, and thedate.

(6) The location of the property towhich the loan relates, by MSA, state,county, and census tract, if the institu-tion has a home or a branch office inthat MSA.

(7) The race or national origin andsex of the applicant or borrower, andthe gross annual income relied upon inprocessing the application.

(8) The type of entity purchasing aloan that the institution originates orpurchases and then sells within thesame calendar year.

(b) Collection of data on race or na-tional origin, sex, and income. (1) A fi-nancial institution shall collect dataabout the race or national origin andsex of the applicant or borrower as pre-scribed in appendix B. If the applicantor borrower chooses not to provide theinformation, the lender shall note thedata on the basis of visual observationor surname, to the extent possible.

(2) Race or national origin, sex, andincome data may but need not be col-lected for:

(i) Loans purchased by the financialinstitution; or

(ii) Applications received or loansoriginated by a bank, savings associa-tion, or credit union with assets on thepreceding December 31 of $30 million orless.

(c) Optional data. A financial institu-tion may report the reasons it denied aloan application.

(d) Excluded data. A financial institu-tion shall not report:

(1) Loans originated or purchased bythe financial institution acting in a fi-duciary capacity (such as trustee);

(2) Loans on unimproved land;(3) Temporary financing (such as

bridge or construction loans);(4) The purchase of an interest in a

pool of loans (such as mortgage-par-ticipation certificates); or

(5) The purchase solely of the right toservice loans.

(e) Data reporting under CRA for banksand savings associations with total assetsof $250 million or more and banks andsavings associations that are subsidiariesof a holding company whose total bank-ing and thrift assets are $1 billion or more.As required by agency regulations thatimplement the Community Reinvest-ment Act, banks and savings associa-tions that had total assets of $250 mil-lion or more (or are subsidiaries of aholding company with total bankingand thrift assets of $1 billion or more)as of December 31 for each of the im-mediately preceding two years, shallalso collect the location of property lo-cated outside the MSAs in which theinstitution has a home or branch of-fice, or outside any MSAs.

[54 FR 51362, Dec. 15, 1989; 55 FR 695, Jan. 8,1990, as amended at 56 FR 59857, Nov. 26, 1991;56 FR 66343, Dec. 23, 1991; Reg. C, 59 FR 63704,Dec. 9, 1994; 60 FR 22225, May 4, 1995]

§ 203.5 Disclosure and reporting.(a) Reporting to agency. By March 1

following the calendar year for whichthe loan data are compiled, a financialinstitution shall send its complete loanapplication register to the agency of-fice specified in Appendix A of thispart, and shall retain a copy for its


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12 CFR Ch. II (1–1–02 Edition)§ 203.6

records for a period of not less thanthree years.

(b) Public disclosure of statement. (1) Afinancial institution shall make itsmortgage loan disclosure statement (tobe prepared by the Federal FinancialInstitutions Examination Council)available to the public at its home of-fice no later than three business daysafter receiving it from the Examina-tion Council.

(2) In addition, a financial institutionshall either:

(i) Make its disclosure statementavailable to the public (within tenbusiness days of receiving it) in atleast one branch office in each addi-tional MSA where the institution hasoffices (the disclosure statement needonly contain data relating to the MSAwhere the branch is located); or

(ii) Post the address for sending writ-ten requests for the disclosure state-ment in the lobby of each branch officein an MSA where the institution hasoffices, and mail or deliver a copy ofthe disclosure statement, within fif-teen calendar days of receiving a writ-ten request (the disclosure statementneed only contain data relating to theMSA for which the request is made).Including the address in the generalnotice required under paragraph (e) ofthis section satisfies this requirement.

(c) Public disclosure of loan applicationregister. A financial institution shallmake its loan application registeravailable to the public after modifyingit in accordance with appendix A. Aninstitution shall make its modifiedregister available following the cal-endar year for which the data are com-piled, by March 31 for a request re-ceived on or before March 1, and within30 days for a request received afterMarch 1. The modified register needonly contain data relating to the MSAfor which the request is made.

(d) Availability of data. A financial in-stitution shall make its modified reg-ister available to the public for a pe-riod of three years and its disclosurestatement available for a period of fiveyears. An institution shall make thedata available for inspection and copy-ing during the hours the office is nor-mally open to the public for business.It may impose a reasonable fee for any

cost incurred in providing or reproduc-ing the data.

(e) Notice of availability. A financialinstitution shall post a general noticeabout the availability of its HMDAdata in the lobby of its home office andof each branch office located in anMSA. It shall promptly upon requestprovide the location of the institu-tion’s offices where the statement isavailable for inspection and copying, orit may include the location in the no-tice.

[58 FR 13405, Mar. 11, 1993, as amended atReg. C, 59 FR 63704, Dec. 9, 1994; 62 FR 28623,May 27, 1997]

§ 203.6 Enforcement.(a) Administrative enforcement. A vio-

lation of the act or this regulation issubject to administrative sanctions asprovided in section 305 of the act, in-cluding the imposition of civil moneypenalties, where applicable. Compli-ance is enforced by the agencies listedin appendix A of this regulation.

(b) Bona fide errors. An error in com-piling or recording loan data is not aviolation of the act or this regulationif it was unintentional and occurred de-spite the maintenance of proceduresreasonably adapted to avoid such er-rors.

[54 FR 51362, Dec. 15, 1989, as amended at 56FR 59857, Nov. 26, 1991]

APPENDIX A TO PART 203—FORM AND IN-STRUCTIONS FOR COMPLETION OFHMDA LOAN/APPLICATION REGISTER

PAPERWORK REDUCTION ACT NOTICE

This report is required by law (12 U.S.C.2801–2810 and 12 CFR part 203). An agencymay not conduct or sponsor, and an organi-zation is not required to respond to, a collec-tion of information unless it displays a cur-rently valid OMB Control Number. The OMBControl Numbers for this information collec-tion are 1557–0159, 3064–0046, 1550–0021, and7100–0247 for institutions reporting data tothe Office of the Comptroller of the Cur-rency, the Federal Deposit Insurance Cor-poration, the Office of Thrift Supervision,and the Federal Reserve System, respec-tively; numbers for the National CreditUnion Administration and the Departmentof Housing and Urban Development are pend-ing. Send comments regarding this burdenestimate or any other aspect of this collec-tion of information, including suggestionsfor reducing the burden, to the respective


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Federal Reserve System Pt. 203, App. A

agencies and to the Office of Information andRegulatory Affairs, Office of Managementand Budget, Washington, D.C. 20503.

I. WHO MUST FILE A REPORT

A. Depository Institutions

1. Subject to the exception discussedbelow, banks, savings associations, and cred-it unions must complete a register listingdata about loan applications received, loansoriginated, and loans purchased if on the pre-ceding December 31 an institution:

a. Had assets of more than the assetthreshold for coverage as published by theBoard each year in December, and

b. Had a home or a branch office in a ‘‘met-ropolitan statistical area’’ or a ‘‘primarymetropolitan statistical area’’ (both are re-ferred to in these instructions by the term‘‘MSA’’).

2. The asset threshold was adjusted from$10 million to $28 million as of December 31,1996. Any adjustment to the asset thresholdfor depository institutions will be publishedby the Board in December in the staff com-mentary.

3. Example. If on December 31 you had ahome or branch office in an MSA and yourassets exceeded the asset threshold, youmust complete a register that lists thehome-purchase and home-improvement loansthat you originate or purchase (and also listsapplications that did not result in an origi-nation) beginning January 1.

B. Depository Institutions—Exception

You need not complete a register—even ifyou meet the tests for asset size and loca-tion—if your institution is a bank, savingsassociation, or credit union that made nofirst-lien home purchase loans (includingrefinancings) on one-to-four-family dwellingsin the preceding calendar year. This excep-tion does not apply in the case of nondeposi-tory institutions.

C. Other Lending Institutions

Subject to the exception discussed below,for-profit mortgage lending institutions(other than banks, savings associations, andcredit unions) must complete a register list-ing data about loan applications received,loans originated, and loans purchased if theinstitution had a home or branch office in anMSA on the preceding December 31, and

1. Had assets of more than $10 million(based on the combined assets of the institu-tion and any parent corporation) on the pre-ceding December 31, or

2. Originated 100 or more home purchaseloans (including refinancings of such loans)during the preceding calendar year, regard-less of asset size.

D. Other Lending Institutions—Exception

You need not complete a register—even ifyou meet the tests for location and asset sizeor number of home purchase loans—if yourinstitution is a for-profit mortgage lender(other than a bank, savings association, orcredit union) and home purchase loans thatyou originated in the preceding calendaryear (including refinancings) came to lessthan 10 percent of your total loan origina-tion volume, measured in dollars.

E. If you are the subsidiary of a bank orsavings association you must complete a sep-arate register for your institution. You willsubmit the register, directly or through yourparent, to the agency that supervises yourparent. (See paragraph VI.)

F. Institutions that are specifically ex-empted by the Federal Reserve Board fromcomplying with the federal Home MortgageDisclosure Act because they are covered by asimilar state law on mortgage loan disclo-sures must use the disclosure form requiredby their state law and submit the data totheir state supervisory agency.

II. REQUIRED FORMAT AND REPORTINGPROCEDURES

A. Institutions must submit data to theirsupervisory agencies in an automated, ma-chine-readable form. The format must con-form exactly to that of form FR HMDA-LAR,including the order of columns, column head-ings, etc. Contact your federal supervisoryagency for information regarding proceduresand technical specifications for automateddata submission; in some cases, agencies alsomake software for automated data submis-sion available to institutions. The data mustbe edited before submission, using the editsincluded in the agency-supplied software orequivalent edits in software available fromvendors or developed in-house. (Institutionsthat report 25 or fewer entries on theirHMDA-LAR may collect and report the datain paper form. An institution that submitsits register in nonautomated form must sendtwo copies that are typed or computer print-ed, and must use the format of form FRHMDA-LAR (but need not use the formitself). Each page must be numbered, and thetotal number of pages must be given (for ex-ample, ‘‘Page 1 of 3’’).)

B. The required data are to be entered inthe register for each loan origination, eachapplication acted on, and each loan pur-chased during the calendar year. Your insti-tution should decide on the procedure itwants to follow—for example, whether tobegin entering the required data when an ap-plication is received, or to wait until finalaction is taken (such as when a loan goes toclosing or an application is denied). Keep inmind that an application is to be reported inthe calendar year when final action is taken.Report loan originations in the year they go


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12 CFR Ch. II (1–1–02 Edition)Pt. 203, App. A

to closing; if an application has been ap-proved but has not yet gone to closing atyear-end, report it the following year.

C. Your institution may collect the dataon separate registers at different branches,or on separate registers for different loantypes (such as for home purchase or homeimprovement loans, or for loans on multi-family dwellings). But make sure the appli-cation or loan numbers (discussed underparagraph V.A.1., below) are unique.

D. Entries need not be grouped on yourregister by MSA, or chronologically, or bycensus tract numbers, or in any other par-ticular order.

E. Applications and loans must be recordedon your register within thirty calendar daysafter the end of the calendar quarter inwhich final action (such as origination orpurchase of a loan, or denial or withdrawalof an application) is taken. The type of pur-chaser for loans sold need not be included inthese quarterly updates.

III. SUBMISSION OF HMDA–LAR AND PUBLICRELEASE OF DATA

A. You must submit the data for your in-stitution to the office specified by your su-pervisory agency no later than March 1 fol-lowing the calendar year for which the dataare compiled. A list of the agencies appearsat the end of these instructions.

B. You must submit all required data toyour supervisory agency in one complete pack-age, with the prescribed transmittal sheet.An officer of your institution must certify tothe accuracy of the data. Any additionaldata submissions that become necessary (forexample, because you discover that datawere omitted from the initial submission, orbecause revisions are called for) also must beaccompanied by a transmittal sheet.

C. The transmittal sheet must state thetotal number of line entries contained in theaccompanying data submission. If the datasubmission involves revisions or deletions ofpreviously submitted data, state the total ofall line entries contained in that submission,including both those representing revisionsor deletions of previously submitted entries,and those that are being resubmitted un-changed or are being submitted for the firsttime. If you are a depository institution, youalso are asked to provide a list of the MSAswhere you have a home or branch office.

D. Availability of disclosure statement. 1. TheFederal Financial Institutions ExaminationCouncil (FFIEC) will prepare a disclosurestatement from the data you submit. Yourdisclosure statement will be returned to thename and address indicated on the trans-mittal sheet. Within three business days ofreceiving the disclosure statement, you mustmake a copy available at your home officefor inspection by the public. For these pur-poses a business day is any calendar day

other than a Saturday, Sunday, or legal pub-lic holiday. You also must either:

a. Make your disclosure statement avail-able to the public, within ten business daysof receiving it from the FFIEC, in at leastone branch office in each additional MSAwhere you have offices (the disclosure state-ment need only contain data relating toproperties in the MSA where the branch of-fice is located); or

b. Post in the lobby of each branch officein an MSA the address where a written re-quest for the disclosure statement may besent, and mail or deliver a copy of the state-ment to any person requesting it, within fif-teen calendar days of receiving a written re-quest. The disclosure statement need onlycontain data relating to the MSA for whichthe request is made.

2. You may make the disclosure statementavailable in paper form or, if the person re-questing the data agrees, in automated form(such as by PC diskette or computer tape).

E. Availability of modified loan applicationregister.

1. To protect the privacy of applicants andborrowers, an institution must modify itsloan application register by removing thefollowing information before releasing it tothe public: the application or loan number,date application received, and date of actiontaken.

2. You may make the modified registeravailable in paper or automated form (suchas by PC diskette or computer tape). Al-though you are not required to make themodified loan application register availablein census-tract order, you are strongly en-couraged to do so in order to enhance itsutility to users.

3. You must make your modified registeravailable following the calendar year forwhich the data are complied, by March 31 fora request received on or before March 1, andwithin 30 days for a request received afterMarch 1. You are not required to prepare amodified loan application register in advanceof receiving a request from the public forthis information, but must be able to re-spond to a request within 30 days. A modifiedregister need only reflect data relating tothe MSA for which the request is made.

F. Posters.1.Suggested language. Some of the agencies

provide HMDA posters that you can use toinform the public of the availability of yourHMDA data, or you may create your ownposters. If you print your own, the followinglanguage is suggested but is not required:

Home Mortgage Disclosure Act Notice

The HMDA data about our residentialmortgage lending are available for review.The data show geographic distribution of


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loans and applications; race, gender, and in-come of applicants and borrowers; and infor-mation about loan approvals and denials. In-quire at this office regarding the locationswhere HMDA data may be inspected.

2. Additional language for institutions makingthe disclosure statement available upon request.For an institution that makes its disclosurestatement available upon request instead ofat branch offices must post a notice inform-ing the public of the address to which a re-quest should be sent. For example, the insti-tution could include the following sentencein its general notice: ‘‘To receive a copy ofthese data send a written request to [ad-dress].’’

IV. TYPES OF LOANS AND APPLICATIONSCOVERED AND EXCLUDED BY HMDA

A. Types of Loans and Applications to beReported

1. Report the data on home purchase andhome improvement loans that you origi-nated (that is, loans that were closed in yourname) and loans that you purchased duringthe calendar year covered by the report. Re-port these data even if the loans were subse-quently sold by your institution. Includerefinancings of home purchase and home im-provement loans.

2. Report the data for applications forhome purchase and home improvement loansthat did not result in originations—for ex-ample, applications that your institution de-nied or that the applicant withdrew duringthe calendar year covered by the report.

3. In the case of brokered loan applicationsor applications forwarded to you through acorrespondent, report as originations loansthat you approved and subsequently acquiredaccording to a pre-closing arrangement(whether or not they closed in your institu-tion’s name). Additionally, report the datafor all applications that did not result inoriginations—for example, applications thatyour institution denied or that the applicantwithdrew during the calendar year coveredby the report (whether or not they wouldhave closed in your institution’s name). Forall of these loans and applications, reportthe race or national origin, sex, and incomeinformation, unless your institution is abank, savings association, or credit unionwith assets of $30 million or less on the pre-ceding December 31.

4. Originations are to be reported onlyonce. If you are the loan broker or cor-respondent, do not report as originationsloans that you forwarded to another lenderfor approval prior to closing, and that wereapproved and subsequently acquired by thatlender (whether or not they closed in yourname).

5. Report applications that were receivedin the previous calendar year but were acted

upon during the calendar year covered by thecurrent register.

B. Data To Be Excluded

Do not report loans or applications forloans of the following types:

1. Loans that, although secured by real es-tate, are made for purposes other than homepurchase, home improvement, or refinancing(for example, do not report a loan secured byresidential real property for purposes of fi-nancing college tuition, a vacation, or goodsfor business inventory).

2. Loans made in a fiduciary capacity (forexample, by your trust department).

3. Loans on unimproved land.4. Construction or bridge loans and other

temporary financing.5. The purchase of an interest in a pool of

loans (such as mortgage-participation cer-tificates).

6. The purchase solely of the right to serv-ice loans.

V. INSTRUCTIONS FOR COMPLETION OF LOAN/APPLICATION REGISTER

A. Application or Loan Information

1. Application or Loan Number

Enter an identifying number that can beused later to retrieve the loan or applicationfile. It can be any number of your choosing(not exceeding 25 characters). You may useletters, numerals, or a combination of both.

Make sure that all numbers are uniquewithin your institution. If your register con-tains data for branch offices, for example,you could use a letter or a numerical code toidentify the loans or applications of differentbranches, or could assign a certain series ofnumbers to particular branches to avoid du-plicate numbers. You are strongly encour-aged not to use the applicant’s or borrower’sname or social security number, for privacyreasons.

2. Date application received. For paper sub-missions only, enter the date the loan appli-cation was received by your institution bymonth, day, and year, using numerals in theform MM/DD/CCYY (for example, 01/15/1999).For institutions submitting data in elec-tronic form, the proper format isCCYYMMDD. If your institution normallyrecords the date shown on the applicationform, you may use that date instead. Enter‘‘NA’’ for loans purchased by your institu-tion.

3. Type. Indicate the type of loan or appli-cation by entering the applicable code fromthe following:

1—Conventional (any loan other than FHA,VA, FSA, or RHS loans)

2—FHA-insured (Federal Housing Adminis-tration)

3—VA-guaranteed (Veterans Administration)


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4—FSA/RHS-guaranteed (Farm ServiceAgency or Rural Housing Service)

4. Purpose

Indicate the purpose of the loan or applica-tion by entering the applicable code from thefollowing:1—Home purchase (one-to-four family)2—Home improvement (one-to-four family)3—Refinancing (home purchase or home im-

provement, one-to-four family)4—Multifamily dwelling (home purchase,

home improvement, and refinancings)

5. Explanation of Purpose Codes

Code 1: Home purchase.a. This code applies to loans and applica-

tions made for the purpose of purchasing aresidential dwelling for one to four families,if the loan is to be secured by the dwellingbeing purchased or by another dwelling.

b. At your option, you may use code 1 forloans that are made for home improvementpurposes but are secured by a first lien, ifyou normally classify such first-lien loans ashome purchase loans.

Code 2: Home improvement.a. Code 2 applies to loans and applications

for loans if (i) a portion of the proceeds is tobe used for repairing, rehabilitating, remod-eling, or improving a one- to four-family res-idential dwelling, or the real property uponwhich it is located, and (ii) the loan is classi-fied as a home improvement loan.

b. Report both secured and unsecuredloans.

c. At your option, you may report dataabout home-equity lines of credit—even ifthe credit line is not classified as a home im-provement loan. If you choose to do so, youmay report a home-equity line of credit as ahome improvement loan if some portion ofthe proceeds will be used for home improve-ment. (See Paragraph 8. ‘‘Loan amount.’’) Ifyou report originations of home-equity linesof credit, you must also report applicationsfor such loans that did not result in origina-tions.

Code 3: Refinancings.a. Use this code for refinancings (and appli-

cations for refinancings) of loans secured byone- to four-family residential dwellings. Arefinancing involves the satisfaction of anexisting obligation that is replaced by a newobligation undertaken by the same borrower.But do not report a refinancing if, under theloan agreement, you are unconditionally ob-ligated to refinance the obligation, or youare obligated to refinance the obligation sub-ject to conditions within the borrower’s con-trol.

b. Use this code whether or not you werethe original creditor on the loan being refi-nanced, and whether or not the refinancinginvolves an increase in the outstanding prin-cipal.

c. You may report all refinancings of loanssecured by one- to four-family residentialdwellings, regardless of the purpose of oramount outstanding on the original loan,and regardless of the amount of new money(if any) that is for home purchase or homeimprovement purposes.

Code 4: Multifamily dwelling.a. Use this code for loans and loan applica-

tions on dwellings for five or more families,including home purchase loans, refinancings,and loans for repairing, rehabilitation, andremodeling purposes.

b. Do not use this code for loans on indi-vidual condominium or cooperative units;use codes 1, 2, or 3 for such loans, as applica-ble.

6. Owner Occupancy

Indicate whether the property to which theloan or loan application relates is to beowner-occupied as a principal dwelling byentering the applicable code from the fol-lowing:1—Owner-occupied as a principal dwelling2—Not owner-occupied3—Not applicable

7. Explanation of Codes

a. Use code 2 for second homes or vacationhomes, as well as rental properties.

b. Use code 2 only for nonoccupant loans,or applications for nonoccupant loans, re-lated to one-to-four family dwellings (includ-ing individual condominium or cooperativeunits).

c. Use code 3 if the property to which theloan relates is a multifamily dwelling; is notlocated in an MSA; or is located in an MSAin which your institution has neither a homenor a branch office.

d. For purchased loans, you may assumethat the property will be owner-occupied asa principal dwelling (code 1) unless the loandocuments or application contain informa-tion to the contrary.

8. Loan Amount

Enter the amount of the loan or applica-tion. Do not report loans below $500. Showthe amount in thousands rounding to thenearest thousand ($500 should be rounded upto the next $1,000). For example, a loan for$167,300 should be entered as 167 and one for$15,500 as 16.

a. For home purchase loans that you origi-nate, enter the principal amount of the loanas the loan amount. For home purchaseloans that you purchase, enter the unpaidprincipal balance of the loan at the time ofpurchase as the loan amount.

b. For home improvement loans (bothoriginations and purchases), you may in-clude unpaid finance charges in the loanamount if that is how you record such loanson your books. For a multiple purpose loan


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classified by you as a home improvementloan because it involves a home improve-ment purpose, enter the full amount of theloan, not just the amount specified for homeimprovement.

c. For home-equity lines of credit (if youhave chosen to report them), enter as theloan amount only that portion of the linethat is for home improvement purposes. Re-port the loan amount for applications thatdid not result in originations in the samemanner. Report only in the year the line isestablished.

d. For refinancings of dwelling-securedloans, indicate the total amount of the refi-nancing, including the amount outstandingon the original loan and the amount of newmoney (if any).

e. For a loan application that was deniedor withdrawn, enter the amount applied for.

f. If you make a counteroffer for anamount different from the amount initiallyapplied for, and the counteroffer is acceptedby the applicant, report it as an originationfor the amount of the loan actually granted.If the applicant turns down the counterofferor fails to respond, report it as a denial forthe amount initially requested.

B. Action Taken

1. Type of action. Indicate the type of ac-tion taken on the application or loan byusing one of the following codes. Do not re-port any loan application still pending at theend of the calendar year; you will report thatapplication on your register for the year inwhich final action is taken.

1—Loan originated2—Application approved but not accepted3—Application denied4—Application withdrawn5—File closed for incompleteness6—Loan purchased by your institution

2. Explanation of Codes

a. Use code 1 for a loan that is originated,including one resulting from a counteroffer(your offer to the applicant to make the loanon different terms or in a different amountthan initially applied for) that the applicantaccepts.

b. Use code 2 when an application is ap-proved but the applicant (or a loan broker orcorrespondent) fails to respond to your noti-fication of approval or your commitment let-ter within the specified time.

c. Use code 3 when an application is denied.This includes the situation when an appli-cant turns down or fails to respond to yourcounteroffer. Do not report as a withdrawnapplication or as an application that was ap-proved but not accepted.

d. Use code 4 only when an application isexpressly withdrawn by the applicant beforea credit decision was made.

e. Use code 5 if you sent a written notice ofincompleteness under § 202.9(c)(2) of Regula-tion B (Equal Credit Opportunity) and theapplicant failed to respond to your requestfor additional information within the periodof time specified in your notice.

3. Date of Action

For paper submissions only, enter the dateby month, day, and year, using numerals inthe form MM/DD/CCYY (for example, 02/22/1999). For institutions submitting data inelectronic form, the proper format isCCYYMMDD.

a. For loans originated, enter the settle-ment or closing date. For loans purchased,enter the date of purchase by your institu-tion.

b. For applications denied, applications ap-proved but not accepted by the applicant,and files closed for incompleteness, enter thedate that the action was taken by your insti-tution or the date the notice was sent to theapplicant.

c. For applications withdrawn, enter thedate you received the applicant’s expresswithdrawal; or you may enter the dateshown on the notification from the appli-cant, in the case of a written withdrawal.

C. Property Location

In these columns enter the applicablecodes for the MSA, state, county, and censustract for the property to which a loan re-lates. For home purchase loans secured byone dwelling, but made for the purpose ofpurchasing another dwelling, report theproperty location for the property in whichthe security interest is to be taken. If thehome purchase loan is secured by more thanone property, report the location data forthe property being purchased. (See para-graphs 5., 6., and 7. of paragraph V.C. of thisappendix for treatment of loans on propertyoutside the MSAs in which you have offices.)

1. MSA

For each loan or loan application, indicatethe location of the property by the MSAnumber. Enter only the MSA number, notthe MSA name. MSA boundaries are definedby the U.S. Office of Management and Budg-et; use the boundaries that were in effect onJanuary 1 of the calendar year for which youare reporting. A listing of MSAs is availablefrom your regional supervisory agency or theFFIEC. (In these instructions, the term MSArefers to both metropolitan statistical areaand primary metropolitan statistical area.)

2. State and County

You must use the Federal InformationProcessing Standard (FIPS) two-digit nu-merical code for the state and the three-digitnumerical code for the county. These codesare available from your regional supervisory


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agency or the FFIEC. Do not use the letterabbreviations used by the U.S. Postal Serv-ice.

3. Census Tract

Indicate the census tract where the prop-erty is located.

a. Enter the code ‘‘NA’’ if the property islocated in an area not divided into censustracts on the U.S. Census Bureau’s census-tract outline maps (see paragraph 4. below).

b. If the property is located in a countywith a population of 30,000 or less in the 1990census (as determined by the Census Bu-reau’s 1990 CPH–2 population series), enter‘‘NA’’ (even if the population has increasedabove 30,000 since 1990), or you may enter thecensus tract number.

4. Census Tract Number

For the census tract number, consult theU.S. Census Bureau’s Census Tract/StreetIndex for 1990, and for addresses not listed inthe index, consult the Census Bureau’s cen-sus tract outline maps. You must use themaps from the Census Bureau’s 1990 CPH–3series, or equivalent 1990 census data fromthe Census Bureau (such as the CensusTIGER/Line File) or from a private pub-lisher.

5. Outside-MSA

For loans on property located outside theMSAs in which you have a home or branchoffice (or outside any MSA), you have twooptions. Under option 1, you may enter theMSA, state, and county codes and the censustract number. You may enter ‘‘NA’’ in theMSA or census tract column if no code ornumber exists for the property. (Codes existfor all states and counties.) If you choose op-tion 1, the codes and tract number must ac-curately identify the location for the prop-erty in question. Under option 2, you mayenter ‘‘NA’’ in all four columns, whether ornot the codes or number exist for the prop-erty.

6. Nondepository Lenders

If you are a for-profit mortgage lending in-stitution (other than a bank, savings asso-ciation, or credit union), and in the pre-ceding calendar year you received applica-tions for, or originated or purchased, loansfor home purchase or home improvementadding up to a total of five or more for agiven MSA, you are deemed to have a branchoffice in that MSA, whether or not you havea physical office there. As a result, you willhave to enter the MSA, state, county, andcensus tract numbers for any transactions inthat MSA. Because you must keep accuraterecords about lending within MSAs in thecurrent calendar year in order to report dataaccurately the following year, to complywith this rule you may find it easier to enter

the geographic information routinely for anyproperty located within any MSA.

7. Data Reporting Under CRA for Banks andSavings Associations With Total Assets of $250Million or More and Banks and Savings Asso-ciations That Are Subsidiaries of a HoldingCompany Whose Total Banking and ThriftAssets Are $1 Billion or More

If you are a bank or savings associationwith total assets of $250 million or more as ofDecember 31 for each of the immediately pre-ceding two years, you must also enter the lo-cation of property located outside the MSAsin which you have a home or branch office,or outside any MSA. You must also enterthis information if you are a bank or savingsassociation that is a subsidiary of a holdingcompany with total banking and thrift as-sets of $1 billion or more as of December 31for each of the immediately preceding twoyears.

D. Applicant Information— Race or NationalOrigin, Sex, and Income

Appendix B of Regulation C contains in-structions for the collection of data on raceor national origin and sex, and also containsa sample form for data collection. The formis substantially similar to the form pre-scribed by § 202.13 of Regulation B (EqualCredit Opportunity) and contained in appen-dix B to that regulation. You may use eitherform.

1. Applicability

You must report this applicant informa-tion for loans that you originate as well asfor applications that do not result in anorigination.

a. You need not collect or report this infor-mation for loans purchased. If you choosenot to, enter the codes specified in para-graphs 3., 4., and 5. below for ‘‘not applica-ble.’’

b. If your institution is a bank, savings as-sociation, or credit union that had assets of$30 million or less on the preceding Decem-ber 31, you may—but need not—collect andreport these data. If you choose not to, enterthe codes specified in paragraphs 3., 4., and 5.below for ‘‘not applicable.’’

c. If the borrower or applicant is not a nat-ural person (a corporation or partnership, forexample), use the codes specified in para-graphs 3., 4., and 5. below for ‘‘not applica-ble.’’

2. Mail and Telephone Applications

Any loan applications mailed to applicantsmust contain a collection form similar tothat shown in appendix B, and you mustrecord on your register the data on race or


83


national origin and sex if the applicant pro-vides it. If the applicant chooses not to pro-vide the data, enter the code for ‘‘informa-tion not provided by applicant in mail ortelephone application’’ specified in para-graphs 3. and 4. below. If an application istaken entirely by telephone, you need not re-quest this information. (See appendix B forcomplete information on the collection ofthis data in mail or telephone applications.)

3. Race or National Origin of Borrower orApplicant

Use the following codes to indicate therace or national origin of the applicant orborrower under column ‘‘A’’ and of any co-applicant or co-borrower under column‘‘CA.’’ If there is more than one co-applicant,provide this information only for the firstco-applicant listed on the application form.If there are no co-applicants or co-borrowers,enter code 8 for ‘‘not applicable’’ in the co-applicant column.1—American Indian or Alaskan Native2—Asian or Pacific Islander3—Black4—Hispanic5—White6—Other7—Information not provided by applicant in

mail or telephone application8—Not applicable

4. Sex of Borrower or Applicant

Use the following codes to indicate the sexof the applicant or borrower under column‘‘A’’ and of any co-applicant or co-borrowerunder column ‘‘CA.’’ If there is more thanone co-applicant, provide this informationonly for the first co-applicant listed on theapplication form. If there are no co-appli-cants or co-borrowers, enter code 4 for ‘‘notapplicable.’’

1—Male2—Female3—Information not provided by applicant in

mail or telephone application4—Not applicable

5. Income

Enter the gross annual income that yourinstitution relied upon in making the creditdecision.

a. Round all dollar amounts to the nearestthousand (round $500 up to the next $1,000),and show in terms of thousands. For exam-ple, $35,500 should be reported as 36.

b. For loans on multifamily dwellings,enter ‘‘NA.’’

c. If no income information is asked for orrelied on in the credit decision, enter ‘‘NA.’’

E. Type of Purchaser

1. Enter the applicable code to indicatewhether a loan that your institution origi-

nated or purchased was then sold to a sec-ondary market entity within the same cal-endar year:0—Loan was not originated or was not sold

in calendar year covered by register1—FNMA (Federal National Mortgage Asso-

ciation)2—GNMA (Government National Mortgage

Association)3—FHLMC (Federal Home Loan Mortgage

Corporation)4—FAMC (Federal Agricultural Mortgage

Corporation)5—Commercial bank6—Savings bank or savings association7—Life insurance company8—Affiliate institution9—Other type of purchaser

2. Explanation of codes. a. Enter the code 0for applications that were denied, with-drawn, or approved but not accepted by theapplicant; and for files closed for incomplete-ness.

b. If you originated or purchased a loanand did not sell it during that same calendaryear, enter the code 0. If you sell the loan ina succeeding year, you need not report thesale.

c. If you conditionally assign a loan toGNMA in connection with a mortgage-backed security transaction, use code 2.

d. Loans ‘‘swapped’’ for mortgage-backedsecurities are to be treated as sales; enterthe type of entity receiving the loans thatare swapped as the purchaser.

e. Use code 8 for loans sold to an institu-tion affiliated with you, such as your sub-sidiary or a subsidiary of your parent cor-poration.

F. Reasons for Denial

1. You are not required to enter the rea-sons for the denial of an application. But ifyou choose to do so, you may indicate up tothree reasons by using the following codes:1—Debt-to-income ratio2—Employment history3—Credit history4—Collateral5—Insufficient cash (downpayment, closing

costs)6—Unverifiable information7—Credit application incomplete8—Mortgage insurance denied9—Other

2. Leave this column blank if the ‘‘actiontaken’’ on the application is not a denial.For example, do not complete this column ifthe application was withdrawn or the filewas closed for incompleteness.

3. If your institution uses the model formfor adverse action contained in the appendixto Regulation B (Form C–1 in appendix C,Sample Notification Form, which offerssome 20 reasons for denial), the following listshows which codes to enter.


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a. Code 1 corresponds to: Income insufficientfor amount of credit requested, and Exces-sive obligations in relation to income.

b. Code 2 corresponds to: Temporary or ir-regular employment, and Length of employ-ment.

c. Code 3 corresponds to: Insufficient num-ber of credit references provided; Unaccept-able type of credit references provided; Nocredit file; Limited credit experience; Poorcredit performance with us; Delinquent pastor present credit obligations with others;Garnishment, attachment, foreclosure, re-possession, collection action, or judgment;and Bankruptcy.

d. Code 4 corresponds to: Value or type ofcollateral not sufficient.

e. Code 6 corresponds to: Unable to verifycredit references, Unable to verify employ-ment, Unable to verify income, and Unableto verify residence.

f. Code 7 corresponds to: Credit applicationincomplete.

g. Code 9 corresponds to: Length of resi-dence, Temporary residence, and Other rea-sons specified on notice.

VI. Federal Supervisory Agencies

Send your loan/application register and di-rect any questions to the office of your fed-eral supervisory agency as specified below. Ifyou are the nondepository subsidiary of abank, savings association, or credit union,send the register to the supervisory agencyfor your parent institution. Terms that arenot defined in the Federal Deposit InsuranceAct (12 U.S.C. 1813(s)) shall have the meaninggiven to them in the International BankingAct of 1978 (12 U.S.C. 3101).

A. National Banks and Their Subsidiaries andFederal Branches and Federal Agencies ofForeign Banks.

District office of the Office of the Comp-troller of the Currency for the district inwhich the institution is located.

B. State Member Banks of the Federal ReserveSystem, Their Subsidiaries, Subsidiaries ofBank Holding Companies, Branches andAgencies of Foreign Banks (other than federalbranches, federal agencies, and insured statebranches of foreign banks), Commercial Lend-ing Companies Owned or Controlled by For-eign Banks, and Organizations OperatingUnder Section 25 or 25A of the Federal Re-serve Act.

Federal Reserve Bank serving the districtin which the state member bank is located;for institutions other than state memberbanks, the Federal Reserve Bank specified bythe Board of Governors.

C. Nonmember Insured Banks (except for federalsavings banks) and Their Subsidiaries and In-sured State Branches of Foreign Banks.

Regional Director of the Federal DepositInsurance Corporation for the region inwhich the institution is located.

D. Savings Institutions Insured Under the Sav-ings Association Insurance Fund of the FDIC,Federally-Chartered Savings Banks InsuredUnder the Bank Insurance Fund of the FDIC(But Not Including State-Chartered SavingsBanks Insured Under the Bank InsuranceFund), Their Subsidiaries, and Subsidiaries ofSavings Institution Holding Companies

Regional or other office specified by theOffice of Thrift Supervision.

E. Credit Unions

National Credit Union Administration, Of-fice of Examination and Insurance, 1776 GStreet, NW., Washington, DC 20456.

F. Other Depository Institutions

Regional Director of the Federal DepositInsurance Corporation for the region inwhich the institution is located.

G. Other Mortgage Lending Institutions

Assistant Secretary for Housing, HMDAReporting—Room 9233, U.S. Department ofHousing and Urban Development, 451 7thStreet, SW., Washington, DC 20410.


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86


LOAN/APPLICATION REGISTER CODE SHEET

Use the following codes to complete theLoan/Application Register. The instructions

to the HMDA–LAR explain the proper use ofeach code.


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Federal Reserve System Pt. 203, App. B

APPLICATION OR LOAN INFORMATION

Type:1—Conventional (any loan other than FHA,

VA, FSA, or RHS loans)2—FHA-insured (Federal Housing Adminis-

tration)3—VA-guaranteed (Veterans Administra-

tion)4—FSA/RHS-guaranteed (Farm Service

Agency or Rural Housing Service)Purpose:

1—Home purchase (one-to-four family)2—Home improvement (one-to-four family)3—Refinancing (home purchase or home

improvement, one-to-four family)4—Multifamily dwelling (home purchase,

home improvement, and refinancings)Owner-Occupancy:

1—Owner-occupied as a principal dwelling2—Not owner-occupied3—Not applicable

Action Taken:1—Loan originated

2—Application approved but not accepted3—Application denied by financial institu-

tion4—Application withdrawn by applicant5—File closed for incompleteness6—Loan purchased by your institution

APPLICANT INFORMATION

Race or National Origin:1—American Indian or Alaskan Native2—Asian or Pacific Islander3—Black4—Hispanic5—White6—Other

7—Information not provided by applicantin mail or telephone application

8—Not applicable

Sex:1—Male2—Female3—Information not provided by applicant

in mail or telephone application4—Not applicable

TYPE OF PURCHASER

0—Loan was not originated or was not soldin calendar year covered by register

1—FNMA (Federal National Mortgage Asso-ciation)

2—GNMA (Government National MortgageAssociation)

3—FHLMC (Federal Home Loan MortgageCorporation)

4—FAMC (Federal Agricultural MortgageCorporation)

5—Commercial bank6—Savings bank or savings association7—Life insurance company8—Affiliate institution9—Other type of purchaser

REASONS FOR DENIAL (OPTIONAL)

1—Debt-to-income ratio2—Employment history3—Credit history4—Collateral5—Insufficient cash (downpayment, closing

costs)6—Unverifiable information7—Credit application incomplete8—Mortgage insurance denied9—Other

[Reg. C, 56 FR 59857, Nov. 26, 1991, as amended at 57 FR 20400, May 13, 1992; 57 FR 56965, 56967,Dec. 2, 1992; 58 FR 13405, Mar. 11, 1993; 59 FR 63704, Dec. 9, 1994; 60 FR 22225, May 4, 1995; 62FR 28623, 28624, May 27, 1997; 62 FR 33340, June 19, 1997; 63 FR 52143-52146, Sept. 30, 1998]

APPENDIX B TO PART 203—FORM AND IN-STRUCTIONS FOR DATA COLLECTIONON RACE OR NATIONAL ORIGIN ANDSEX

I. Instructions on collection of data on race ornational origin and sex.

A. Format.

You may list questions regarding the raceor national origin and sex of the applicant onyour loan application form, or on a separateform that refers to the application. (See thesample form below for recommended lan-guage.)

B. Procedures.

1. You must ask for this information, butcannot require the applicant to provide it.

2. If the applicant chooses not to providethe information for an application taken inperson, note this fact on the form and notethe data, to the extent possible, on the basisof visual observation or surname.

3. Inform the applicant that the Federalgovernment is requesting this information inorder to monitor compliance with Federalstatutes that prohibit lenders from discrimi-nating against applicants on these bases. In-form the applicant that if the information isnot provided where the application is takenin person, you are required to note the dataon the basis of visual observation or sur-name.

4. If an application is made entirely bytelephone, you need not request this infor-mation. And you need not provide the datawhen you take an application by mail, if theapplicant fails to answer these questions on


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12 CFR Ch. II (1–1–02 Edition)Pt. 203, Supp. I

the application form. You should indicatewhether an application was received by mailor telephone, if it is not otherwise evident onthe face of the application.

5. The ‘‘other’’ block is available only tothe applicant who chooses to indicate some

other appropriate category for race or na-tional origin. If completing the form basedon visual observation, do not use this cat-egory; use one of the other five categories.

SUPPLEMENT I TO PART 203—STAFFCOMMENTARY

Introduction

1. Status and citations. The commentary inthis supplement is the vehicle by which theDivision of Consumer and Community Af-fairs of the Federal Reserve Board issues for-mal staff interpretations of Regulation C (12CFR part 203). The parenthetical citationsgiven are references to Appendix A to Regu-lation C, Form and Instructions for Comple-tion of the HMDA Loan/Application Reg-ister.

Section 203.1—Authority, Purpose, and Scope

1(c) Scope.1. General. The comments in this section

address issues affecting coverage of institu-tions, exemptions from coverage, and data

collection requirements. (Appendix A of thispart, I., IV., and V.)

2. Meaning of refinancing. A refinancing ofa loan is the satisfaction and replacement ofan existing obligation by a new obligation bythe same borrower. The term ‘‘refinancing’’refers to the new obligation. If the existingobligation is not satisfied and replaced, butis only renewed, modified, extended, or con-solidated (as in certain modification, exten-sion, and consolidation agreements), thetransaction is not a refinancing for purposesof HMDA. (Appendix A of this part, Para-graph V.A.5. Code 3.)

3. Refinancing— coverage. The regulationbases coverage, in part, on whether an insti-tution originates home purchase loans. Fordetermining whether an institution is sub-ject to Regulation C or is exempt from cov-erage, an origination of a home-purchase


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Federal Reserve System Pt. 203, Supp. I

loan includes the refinancing of a home-pur-chase loan. An institution may always deter-mine the actual purpose of the existing obli-gation (for example, by reference to avail-able documents). (Appendix A of this part,Paragraphs I.B., I.C., and I.D.) Alternatively,an institution may:

i. Rely on the statement of the applicantthat the existing obligation was (or was not)a home-purchase loan; or

ii. Assume that the new obligation is not arefinancing of a home-purchase loan if eitherthe existing obligation or the new obligationis not secured by a first lien on the dwelling.

4. Refinancing— data collection. The regula-tion requires collection and reporting of dataon refinancings of home-purchase and home-improvement loans. An institution may al-ways determine the actual purpose of the ex-isting obligation (for example, by referenceto available documents). (Appendix A of thispart, Paragraph V.A.5. Code 3.) Alter-natively, an institution may:

i. Rely on the statement of the applicantthat the existing obligation was (or was not)a home-purchase or home-improvement loan;or

ii. Assume that the new obligation is a re-financing of a home-purchase or home-im-provement loan only if the existing obliga-tion was secured by a lien on a dwelling; or

iii. Assume that the new obligation is a re-financing of a home-purchase or home-im-provement loan only if the new obligationwill be secured by a lien on a dwelling.

5. The broker rule and the meaning of‘‘broker’’ and ‘‘investor.’’ For the purposes ofthe guidance given in this commentary, aninstitution that takes and processes a loanapplication and arranges for another institu-tion to acquire the loan at or after closing isacting as a ‘‘broker,’’ and an institution thatacquires a loan from a broker at or afterclosing is acting as an ‘‘investor.’’ (Theterms used in this commentary may havedifferent meanings in certain parts of themortgage lending industry and other termsmay be used in place of these terms, for ex-ample in the Federal Housing Administra-tion mortgage insurance programs.) Depend-ing on the facts, a broker may or may notmake a credit decision on an application(and thus it may or may not have reportingresponsibilities). If the broker makes a cred-it decision, it reports that decision; if it doesnot make a credit decision, it does not re-port. If an investor reviews an applicationand makes a credit decision prior to closing,the investor reports that decision. If the in-vestor does not review the application priorto closing, it reports only the loans that itpurchases; it does not report the loans itdoes not purchase. Thus, an institution thatmakes a credit decision on an applicationprior to closing reports that decision regard-less of whose name the loan closes in. (Ap-

pendix A of this part, Paragraphs IV.A. andV.B.)

6. Illustrations of the broker rule. Assumethat, prior to closing, four investors receivethe same application from a broker; twodeny it, one approves it, and one approves itand acquires the loan. In these cir-cumstances, the first two report denials, thethird reports the transaction as approved butnot accepted, and the fourth reports an origi-nation (whether the loan closes in the nameof the broker or the investor). Alternatively,assume that the broker denies a loan beforesending it to an investor; in this situation,the broker reports a denial. (Appendix A ofthis part, Paragraphs IV.A. and V.B.)

7. Broker’s use of investor’s underwriting cri-teria. If a broker makes a credit decisionbased on underwriting criteria set by an in-vestor, but without the investor’s reviewprior to closing, the broker has made thecredit decision. The broker reports as anorigination a loan that it approves andcloses, and reports as a denial an applicationthat it turns down (either because the appli-cation does not meet the investor’s under-writing guidelines or for some other reason).The investor reports as purchases only thoseloans it purchases. (Appendix A of this part,Paragraphs IV.A. and V.B.)

8. Insurance and other criteria. If an institu-tion evaluates an application based on thecriteria or actions of a third party otherthan an investor (such as a government orprivate insurer or guarantor), the institutionmust report the action taken on the applica-tion (loan originated, approved but not ac-cepted, or denied, for example). (Appendix Aof this part, Paragraphs IV.A. and V.B.)

9. Credit decision of agent is decision of prin-cipal. If an institution approves loansthrough the actions of an agent, the institu-tion must report the action taken on the ap-plication (loan originated, approved but notaccepted, or denied, for example). State lawdetermines whether one party is the agent ofanother. (Appendix A of this part, Para-graphs IV.A. and V.B.)

10. Affiliate bank underwriting (250.250 re-view). If an institution makes an independentevaluation of the creditworthiness of an ap-plicant (for example, as part of a pre-closingreview by an affiliate bank under 12 CFR250.250, which interprets section 23A of theFederal Reserve Act), the institution is mak-ing a credit decision. If the institution thenacquires the loan, it reports the loan as anorigination whether the loan closes in thename of the institution or its affiliate. Aninstitution that does not acquire the loanbut takes another action reports that action.(Appendix A of this part, Paragraphs IV.A.and V.B.)

11. Participation loan. An institution thatoriginates a loan and then sells partial inter-ests to other institutions reports the loan asan origination. An institution that acquires


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only a partial interest in such a loan doesnot report the transaction even if it has par-ticipated in the underwriting and originationof the loan. (Appendix A of this part, Para-graphs I., II., IV., and V.)

12. Assumptions. An assumption occurswhen an institution enters into a writtenagreement accepting a new borrower as theobligor on an existing obligation. An institu-tion reports as a home-purchase loan an as-sumption (or an application for an assump-tion) in the amount of the outstanding prin-cipal. If a transaction does not involve awritten agreement between a new borrowerand the institution, it is not an assumptionfor HMDA purposes and is not reported. (Ap-pendix A of this part, Paragraphs IV.A. andV.B.)

Section 203.2—Definitions

2(b) Application.1. Consistency with Regulation B. Board in-

terpretations that appear in the official staffcommentary to Regulation B (Equal CreditOpportunity, 12 CFR Part 202, Supplement I)are generally applicable to the definition ofan application under Regulation C. However,under Regulation C the definition of an ap-plication does not include prequalificationrequests. (Appendix A of this part, Para-graph IV.A.)

2. Prequalification. A prequalification re-quest is a request by a prospective loan ap-plicant for a preliminary determination onwhether the prospective applicant wouldlikely qualify for credit under an institu-tion’s standards, or on the amount of creditfor which the prospective applicant wouldlikely qualify. Some institutions evaluateprequalification requests through a proce-dure that is separate from the institution’snormal loan application process; others usethe same process. In either case, RegulationC does not require an institution to reportprequalification requests on the HMDA–LAR, even though these requests may con-stitute applications under Regulation B. (Ap-pendix A of this part, Paragraphs I. andIV.A.)

2(c) Branch office.1. Credit union. For purposes of Regulation

C, a ‘‘branch’’ of a credit union is any officewhere member accounts are established orloans are made, whether or not the office hasbeen approved as a branch by a federal orstate agency. (See 12 U.S.C. 1752.) (AppendixA of this part, Paragraphs I., V.A.7., andV.C.)

2. Depository institution. A branch of a de-pository institution does not include a loanproduction office, the office of an affiliate, orthe office of a third party such as a loanbroker. (Appendix A of this part, ParagraphsI., V.A.7., and V.C.) (But see Appendix A ofthis part, Paragraph V.C.7., which requirescertain depository institutions to reportproperty location even for properties located

outside those MSAs in which the institutionhas a home or branch office.)

3. Nondepository institution. A branch of anondepository institution does not includethe office of an affiliate or other third partysuch as a loan broker. (Appendix A of thispart, Paragraphs I., V.A.7., and V.C.) (But seeAppendix A of this part, Paragraph V.C.6.,which requires certain nondepository insti-tutions to report property location even inMSAs where they do not have a physical lo-cation.)

2(d) Dwelling.1. Scope. The definition of ‘‘dwelling’’ is not

limited to the principal or other residence ofthe applicant or borrower, and thus includesvacation or second homes and rental prop-erties. A dwelling also includes a mobile ormanufactured home, a multifamily structure(such as an apartment building), and a con-dominium or a cooperative unit. Rec-reational vehicles such as boats or campersare not dwellings for purposes of HMDA. (Ap-pendix A of this part, Paragraphs I.B., IV.,and V.A.5.)

2(e) Financial institution.1. Branches of foreign banks— treated as a

bank. A federal branch or a state-licensed in-sured branch of a foreign bank is a ‘‘bank’’under section 3(a)(1) of the Federal DepositInsurance Act (12 U.S.C. 1813(a)), and is cov-ered by HMDA if it meets the tests for a de-pository institution found in §§ 203.2(e)(1) and203.3(a)(1) of Regulation C. (Appendix A ofthis part, Paragraphs I.A. and I.B.)

2. Branches and offices of foreign banks—treated as a for-profit mortgage lending institu-tion. Federal agencies, state-licensed agen-cies, state-licensed uninsured branches offoreign banks, commercial lending compa-nies owned or controlled by foreign banks,and entities operating under section 25 or25(a) of the Federal Reserve Act, 12 U.S.C. 601and 611 (Edge Act and Agreement corpora-tions) are not ‘‘banks’’ under the Federal De-posit Insurance Act. These entities are none-theless covered by HMDA if they meet thetests for a nondepository mortgage lendinginstitution found in §§ 203.2(e)(2) and203.3(a)(2) of Regulation C. (Appendix A ofthis part, Paragraphs I.C. and I.D.)

2(f) Home-improvement loan.1. Definition. A home-improvement loan is

a loan that is made for the purpose of homeimprovement and that is classified by the in-stitution as a home-improvement loan. (Ap-pendix A of this part, Paragraphs IV. andV.A.5. Code 2.)

2. Statement of the applicant. An institutionmay rely on the oral or written statement ofan applicant regarding the proposed use ofloan proceeds. (Appendix A of this part,Paragraphs IV. and V.A.5. Code 2.c.)

3. Home-equity lines. An institution that haschosen to report home-equity lines of creditreports as a home-improvement loan only


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the part of a home-equity line that is in-tended for home improvement. An institu-tion that reports home-equity lines reportsthe disposition of all applications, not justoriginations. (Appendix A of this part, Para-graphs IV. and V.A.5. Code 2.c.)

4. Classification requirement. An institutionhas ‘‘classified’’ a loan as a home-improve-ment loan if it has entered the loan on itsbooks as a home-improvement loan, or hasotherwise coded or identified the loan as ahome-improvement loan. For example, an in-stitution that has booked a loan or reportedit on a ‘‘call report’’ as a home-improvementloan has classified it as a home-improvementloan. An institution may also classify loansas home-improvement loans in other ways(for example, by color-coding loan files). (Ap-pendix A of this part, Paragraphs IV. andV.A.5. Code 2.)

5. Improvements to real property. Home im-provements include improvements both to adwelling and to the real property on whichthe dwelling is located (for example, instal-lation of a swimming pool, construction of agarage, or landscaping). (Appendix A of thispart, Paragraphs IV. and V.A.5. Code 2.)

6. Commercial and other loans. A loan for im-provement purposes originated outside an in-stitution’s consumer lending division (suchas a loan to improve an apartment buildingmade through the commercial loan depart-ment) is reported if the institution classifiesit as a home-improvement loan. (Appendix Aof this part, Paragraphs IV. and V.A.5. Code1.)

7. Multiple-purpose loan. A loan for homeimprovement and for other purposes is treat-ed as a home-improvement loan even if lessthan 50 percent of the total loan proceeds areto be used for improvement, provided the in-stitution classifies the loan as a home-im-provement loan. (Appendix A of this part,Paragraphs IV. and V.A.5. Code 2.) (But seecomment (2)(f)–3 of this supplement onhome-equity lines of credit.)

8. Mixed-use property. A loan to improveproperty used for residential and commercialpurposes (for example, a building containingapartment units and retail space) satisfiesthe purpose requirement if the loan proceedsare primarily to improve the residential por-tion of the property. If the loan proceeds areto improve the entire property (for example,to replace the heating system), the loan sat-isfies the purpose requirement if the prop-erty itself is primarily residential. An insti-tution may use any reasonable standard todetermine the primary use of the property,such as by square footage or by the incomegenerated. An institution may select thestandard to apply on a case-by-case basis. Toreport the loan as a home-improvement loan,the institution must also classify it as such.(Appendix A of this part, Paragraphs IV. andV.A.5. Code 2.)

2(g) Home-purchase loan.

1. Multiple properties. A home-purchase loanincludes a loan secured by one dwelling andused to purchase another dwelling. (Appen-dix A of this part, Paragraphs IV. and V.A.5.Code 1.)

2. Mixed-use property. A loan to purchaseproperty used primarily for residential pur-poses (for example, an apartment buildingcontaining a convenience store) is a home-purchase loan. An institution may use anyreasonable standard to determine the pri-mary use of the property, such as by squarefootage or by the income generated. An in-stitution may select the standard to applyon a case-by-case basis. (Appendix A of thispart, Paragraphs IV.A., IV.B.1., and V.A.5.Code 1.)

3. Farm loan. A loan to purchase propertyused primarily for agricultural purposes isnot a home-purchase loan even if the prop-erty includes a dwelling. An institution mayuse any reasonable standard to determinethe primary use of the property, such as byreference to the exemption from RegulationX (Real Estate Settlement Procedures, 24CFR 3500.5(b)(1)) for a loan on property of 25acres or more. An institution may select thestandard to apply on a case-by-case basis.(Appendix A of this part, Paragraphs IV.B.1.and V.A.5. Code 1.)

4. Commercial and other loans. A home-pur-chase loan includes a loan originated outsidean institution’s residential mortgage lendingdivision (such as a loan for the purchase ofan apartment building made through thecommercial loan department). For home-purchase loans, there is no classificationtest. (Appendix A of this part, ParagraphsIV. and V.A.5. Code 1.)

5. Construction and permanent financing. Ahome-purchase loan includes both a com-bined construction/permanent loan and thepermanent financing that replaces a con-struction-only loan. It does not include aconstruction-only loan, which is considered‘‘temporary financing’’ under Regulation Cand is not reported. (Appendix A of this part,Paragraphs IV.A. and B.2, and V.A.5. Code 1.)

6. Home-equity line. An institution that haschosen to report home-equity lines of creditreports as a home-purchase loan only thepart that is intended for home purchase. Aninstitution may rely on the applicant’s oralor written statement about the proposed useof the funds. An institution that reportshome-equity lines reports the disposition ofall applications, not just the originations.(Appendix A of this part, Paragraphs IV. andV.A.5. Code 1.)

Section 203.3—Exempt Institutions

3(a) Exemption based on location, asset size,or number of home-purchase loans.

1. General. An institution that ceases tomeet the tests for HMDA coverage (such as


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the 10 percent test for nondepository institu-tions) or becomes exempt may stop col-lecting HMDA data beginning with the nextcalendar year. For example, a bank whoseassets are at or below the threshold on De-cember 31 of a given year reports data forthat full calendar year, in which it was cov-ered, but does not report data for the suc-ceeding calendar year. (Appendix A of thispart, Paragraph I.)

2. Adjustment of exemption threshold for de-pository institutions. For data collection in2002, the asset–size exemption threshold is$32 million. Depository institutions with as-sets at or below $32 million are exempt fromcollecting data for 2002.

3. Coverage after a merger. Several scenariosof data collection responsibilities for the cal-endar year of a merger are described below.Under all the scenarios, if the merger resultsin a covered institution, that institutionmust begin data collection January 1 of thefollowing calendar year. (Appendix A of thispart, Paragraph I.)

i. Two institutions are exempt from Regu-lation C because of asset size. The institu-tions merge. No data collection is requiredfor the year of the merger (even if the merg-er results in a covered institution).

ii. A covered institution and an exempt in-stitution merge. The covered institution isthe surviving institution. For the year of themerger, data collection is required for thecovered institution’s transactions. Data col-lection is optional for transactions handledin offices of the previously exempt institu-tion.

iii. A covered institution and an exempt in-stitution merge. The exempt institution isthe surviving institution, or a new institu-tion is formed. Data collection is requiredfor transactions of the covered institutionthat take place prior to the merger. Datacollection is optional for transactions takingplace after the merger date.

iv. Two covered institutions merge. Datacollection is required for the entire year. Thesurviving or resulting institution files eithera consolidated submission or separate sub-missions for that year.

4. Mergers versus purchases in bulk. If a cov-ered institution acquires loans in bulk fromanother institution (for example, from thereceiver for a failed institution) but nomerger or acquisition of an institution is in-volved, the institution reports the loans aspurchased loans. (Appendix A of this part,Paragraph V.B.)

Section 203.4—Compilation of Loan Data

4(a) Data format and itemization.1. Quarterly updating. An institution must

make a good-faith effort to record all dataconcerning covered transactions—loan origi-nations (including refinancings), loan pur-chases, and the disposition of applicationsthat did not result in originations—fully and

accurately within 30 days after the end ofeach calendar quarter. If some data are inac-curate or incomplete despite this good-faitheffort, the error or omission is not a viola-tion of Regulation C provided that the insti-tution corrects and completes the informa-tion prior to reporting the HMDA–LAR to itsregulatory agency. (Appendix A of this part,Paragraph II.E.)

2. Updating— agency requirements. Certainstate or federal regulations, such as the Fed-eral Deposit Insurance Corporation’s regula-tions, may require an institution to updateits data more frequently than is requiredunder Regulation C. (Appendix A of thispart, Paragraph II.E.)

3. Form of updating. An institution maymaintain the quarterly updates of theHMDA–LAR in electronic or any other for-mat, provided the institution can make theinformation available to its regulatory agen-cy in a timely manner upon request. (Appen-dix A of this part, Paragraph II.E.)

Paragraph 4(a)(1) Application date.1. Application date— consistency. In report-

ing the date of application, an institution re-ports the date the application was receivedor the date shown on the application. Al-though an institution need not choose thesame approach for its entire HMDA submis-sion, it should be generally consistent (suchas by routinely using one approach within aparticular division of the institution or for acategory of loans). (Appendix A of this part,Paragraph V.A.2.)

2. Application date— application forwarded bya broker. For an application forwarded by abroker, an institution reports the date theapplication was received by the broker, thedate the application was received by the in-stitution, or the date shown on the applica-tion. Although an institution need notchoose the same approach for its entireHMDA submission, it should be generallyconsistent (such as by routinely using oneapproach within a particular division of theinstitution or for a category of loans). (Ap-pendix A of this part, Paragraph V.A.2.)

3. Application date— reinstated application.If, within the same calendar year, an appli-cant asks an institution to reinstate acounteroffer that the applicant previouslydid not accept (or asks the institution to re-consider an application that was denied,withdrawn, or closed for incompleteness),the institution may treat that request as thecontinuation of the earlier transaction or asa new transaction. If the institution treatsthe request for reinstatement or reconsider-ation as a new transaction, it report the dateof the request as the application date. (Ap-pendix A of this part, Paragraph V.A.2.)

Paragraph 4(a)(2) Type and purpose.1. Purpose— multiple-purpose loan. If a loan

is for home improvement and another cov-ered purpose, an institution reports the loan


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as a home-improvement loan if the institu-tion classifies it as a home-improvementloan. Otherwise the institution reports theloan as a home-purchase loan or a refi-nancing, as appropriate. An institution maydetermine how to report such loans on acase-by-case basis. (Appendix A of this part,Paragraphs V.A.4. and 5.)

Paragraph 4(a)(3) Occupancy.1. Occupancy— actual occupancy status. If a

loan relates to multifamily property, prop-erty located outside an MSA, or property inan MSA where the institution has no homeor branch office, the institution may eitherreport the actual occupancy status or reportusing the code for ‘‘not applicable.’’ (A non-depository institution may be deemed tohave a home or branch office in an MSAunder § 203.2(c)(2) of Regulation C.) (AppendixA of this part, Paragraph V.A.7.)

2. Occupancy— multiple properties. If a loanrelates to multiple properties, the institu-tion reports the owner-occupancy status ofthe property for which property location isbeing reported. (See the comments to para-graphs 4(a)(6) Property location.) (AppendixA of this part, Paragraphs V.A.6. and 7.)

Paragraph 4(a)(4) Loan amount.1. Loan amount— counteroffer. If an appli-

cant accepts a counteroffer for an amountdifferent from the amount initially re-quested, the institution reports the loanamount granted. If an applicant does not ac-cept a counteroffer or fails to respond, theinstitution reports the loan amount initiallyrequested. (Appendix A of this part, Para-graph V.A.8.f.)

2. Loan amount— multiple-purpose loan. Ex-cept in the case of a home-equity line ofcredit, an institution reports the entireamount of the loan, even if only a part of theproceeds is intended for home purchase orhome improvement. (Appendix A of this part,Paragraph V.A.8.)

3. Loan amount— home-equity line. An insti-tution that reports home-equity lines ofcredit reports only the part that is intendedfor home-improvement or home-purchasepurposes. An institution may rely on the ap-plicant’s oral or written statement about theproposed use of the loan proceeds. (AppendixA of this part, Paragraph V.A.8.c.)

4. Loan amount— assumption. An institutionthat enters into a written agreement accept-ing a new party as the obligor on a loan re-ports the amount of the outstanding prin-cipal on the assumption as the loan amount.(Appendix A of this part, Paragraphs V.A.8.)

Paragraph 4(a)(5) Type of action taken anddate.

1. Action taken— counteroffers. If an institu-tion makes a counteroffer to lend on termsdifferent from the applicant’s initial request(for example, for a shorter loan maturity)and the applicant does not accept thecounteroffer or fails to respond, the institu-

tion reports the action taken as a denial.(Appendix A of this part, Paragraph V.B.)

2. Action taken— rescinded transactions. If aborrower rescinds a transaction after clos-ing, the institution, on a case-by-case basis,may report the transaction either as anorigination or as an application that was ap-proved but not accepted. (Appendix A of thispart, Paragraph V.B.)

3. Action taken— purchased loans. An insti-tution reports the loans that it purchasedduring the calendar year, and does not reportthe loans that it declined to purchase. (Ap-pendix A of this part, Paragraph V.B.)

4. Action taken— conditional approvals. If aninstitution issues a loan approval subject tothe applicant’s meeting underwriting condi-tions (other than customary loan commit-ment or loan closing conditions, such as a‘‘clear title’’ requirement or an acceptableproperty survey) and the applicant does notmeet them, the institution reports the ac-tion taken as a denial. (Appendix A of thispart, Paragraph V.B.)

5. Action taken date— approved but not ac-cepted. For a loan approved by an institutionbut not accepted by the applicant, the insti-tution reports using any reasonable date,such as the approval date, the deadline foraccepting the offer, or the date the file wasclosed. Although an institution need notchoose the same approach for its entireHMDA submission, it should be generallyconsistent (such as by routinely using oneapproach within a particular division of theinstitution or for a category of loans). (Ap-pendix A of this part, Paragraph V.B.3.b.)

6. Action taken date— originations. For loanoriginations, an institution generally reportsthe settlement or closing date. For loanoriginations that an institution acquiresthrough a broker, the institution reports ei-ther the settlement or closing date, or thedate the institution acquired the loan fromthe broker. If the disbursement of fundstakes place on a date later than the settle-ment or closing date, the institution mayuse the date of disbursement. For a construc-tion/permanent loan, the institution reportseither the settlement or closing date, or thedate the loan converts to the permanent fi-nancing. Although an institution need notchoose the same approach for its entireHMDA submission, it should be generallyconsistent (such as by routinely using oneapproach within a particular division of theinstitution or for a category of loans). (Ap-pendix A of this part, Paragraph V.B.3.)

Paragraph 4(a)(6) Property location.1. Property location— multiple properties

(home improvement/refinance of home improve-ment). For a home-improvement loan, an in-stitution reports the property being im-proved. If more than one property is beingimproved, the institution reports the loca-tion of one of the properties or reports theloan using multiple entries on its HMDA–


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LAR (with unique identifiers) and allocatingthe loan amount among the properties. (Ap-pendix A of this part, Paragraph V.C.)

2. Property location— multiple properties(home purchase/refinance of home purchase).For a home-purchase loan, an institution re-ports the property taken as security. If aninstitution takes more than one property assecurity, the institution reports the locationof the property being purchased if there isjust one. If the loan is to purchase multipleproperties and is secured by multiple prop-erties, the institution reports the location ofone of the properties or reports the loanusing multiple entries on its HMDA–LAR(with unique identifiers) and allocating theloan amount among the properties. (Appen-dix A of this part, Paragraph V.C.)

3. Property location— loans purchased fromanother institution. The requirement to reportthe property location by census tract in anMSA where the institution has a home orbranch office applies not only to loan appli-cations and originations but also to loanspurchased from another institution. This in-cludes loans purchased from an institutionthat did not have a home or branch office inthat MSA and did not collect the propertylocation information. (Appendix A of thispart, Paragraph V.C.)

4. Property location— mobile or manufacturedhome. If information about the potential siteof a mobile or manufactured home is notavailable, an institution reports using thecode for ‘‘not applicable.’’ (Appendix A ofthis part, Paragraph V.C.)

5. Property location— use of BNA. At its op-tion, an institution may report property lo-cation by using a block numbering area(BNA). The U.S. Census Bureau, in conjunc-tion with state agencies, has establishedBNAs as statistical subdivisions of countiesin which census tracts have not been estab-lished. BNAs are generally identified in cen-sus data by numbers in the range 9501 to9999.99. (Appendix A of this part, ParagraphV.C.4.)

Paragraph 4(a)(7) Applicant and income data.1. Applicant data— completion by applicant.

An institution reports the monitoring infor-mation as provided by the applicant. For ex-ample, if an applicant checks the ‘‘other’’box the institution reports using the ‘‘other’’code. (Appendix A of this part, ParagraphV.D.)

2. Applicant data— completion by lender. If anapplicant fails to provide the requested in-formation for an application taken in person,the institution reports the data on the basisof visual observation or surname. As statedin paragraph I.B.5 to Appendix B of this part,the institution does not use the ‘‘other’’code, but selects from the categories listedon the form. (Appendix A of this part, Para-graph V.D.)

3. Applicant data— application completed inperson. When an applicant meets in person

with a lender to complete an applicationthat was begun by mail or telephone, the in-stitution must request the monitoring infor-mation. If the meeting occurs after the ap-plication process is complete, for example, atclosing, the institution is not required to ob-tain monitoring information. (Appendix A ofthis part, Paragraph V.D.)

4. Applicant data— joint applicant. A jointapplicant may enter the government moni-toring information on behalf of an absentjoint applicant. If the information is not pro-vided, the institution reports using the codefor ‘‘information not provided by applicantin mail or telephone application.’’ (AppendixA of this part, Paragraph V.D.)

5. Applicant data— video and other electronicapplication processes. An institution that ac-cepts applications through electronic mediawith a video component treats the applica-tions as taken in person and collects the in-formation about the race or national originand sex of applicants. An institution that ac-cepts applications through electronic mediawithout a video component (for example, theInternet or facsimile) treats the applicationsas accepted by mail. (Appendix A of thispart, Paragraph V.D.) (See Appendix B ofthis part for procedures to be used for datacollection.)

6. Income data— income relied upon. An insti-tution reports the gross annual income re-lied on in evaluating the creditworthiness ofapplicants. For example, if an institution re-lies on an applicant’s salary to compute adebt-to-income ratio, but also relies on theapplicant’s annual bonus to evaluate credit-worthiness, the institution reports the sal-ary and the bonus to the extent relied upon.Similarly, if an institution relies on the in-come of a cosigner to evaluate creditworthi-ness, the institution includes this income tothe extent relied upon. But an institutiondoes not include the income of a guarantorwho is only secondarily liable. (Appendix Aof this part, Paragraph V.D.5.)

7. Income data— co-applicant. If two personsjointly apply for a loan and both list incomeon the application, but the institution reliesonly on the income of one applicant in com-puting ratios and in evaluating creditworthi-ness, the institution reports only the incomerelied on. (Appendix A of this part, Para-graph V.D.5.)

8. Income data— loan to employee. An institu-tion may report ‘‘NA’’ in the income field forloans to employees to protect their privacy,even though the institution relied on theirincome in making its credit decisions. (Ap-pendix A of this part, Paragraph V.D.5.)

Paragraph 4(a)(8) Purchaser.1. Type of purchaser— loan participation in-

terests sold to more than one entity. An institu-tion that originates a loan, and then sells itto more than one entity, reports the ‘‘type ofpurchaser’’ based on the entity purchasingthe greatest interest, if any. If an institution


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Federal Reserve System Pt. 204

retains a majority interest it does not reportthe sale. (Appendix A of this part, ParagraphV.E.)

4(c) Optional data.1. Agency requirements. Certain state or fed-

eral entities, such as the Office of Thrift Su-pervision, require institutions to report thereasons for denial even though this is op-tional reporting under HMDA and Regula-tion C. (Appendix A of this part, ParagraphV.F.)

4(d) Excluded data.1. Loan pool. The purchase of an interest in

a loan pool (such as a mortgage-participa-tion certificate, a mortgage-backed security,or a real estate mortgage investment con-duit or ‘‘REMIC’’) is a purchase of an inter-est in a security under HMDA and is not re-ported on the HMDA–LAR. (Appendix A ofthis part, Paragraph IV.B.5.)

Section 203.5—Disclosure and Reporting

5(a) Reporting to agency.1. Change in supervisory agency. If the su-

pervisory agency for a covered institutionchanges (as a consequence of a merger or achange in the institution’s charter, for ex-ample), the institution reports data to itsnew supervisory agency for the year of thechange and subsequent years. (Appendix A ofthis part, Paragraphs I., III. and VI.)

2. Subsidiaries. An institution is a sub-sidiary of a bank or savings association (forpurposes of reporting HMDA data to the par-ent’s supervisory agency) if the bank or sav-ings association holds or controls an owner-ship interest that is greater than 50 percentof the institution. (Appendix A of this part,Paragraph I.E. and VI.)

5(e) Notice of availability.1. Poster— suggested text. The suggested

wording of the poster text provided in Ap-pendix A of this part is optional. An institu-tion may use other text that meets the re-quirements of the regulation. (Appendix A ofthis part, Paragraph III.F.)

Section 203.6—Enforcement

6(b) Bona fide errors.1. Bona fide error— information from third

parties. An institution that obtains the prop-erty location information for applicationsand loans from third parties (such as ap-praisers or vendors of ‘‘geocoding’’ services)is responsible for ensuring that the informa-tion reported on its HMDA–LAR is correct.An incorrect entry for a census tract numberis a bona fide error, and is not a violation ofthe act or regulation, provided that the in-stitution maintains reasonable procedures toavoid such errors (for example, by con-ducting periodic checks of the information

obtained from these third parties). (AppendixA of this part, Paragraph V.C.)

[Reg. C, 60 FR 63396, Dec. 11, 1995, as amendedat 62 FR 28626, May 27, 1997; 62 FR 66260, Dec.18, 1997; 63 FR 70997, Dec. 23, 1998; 64 FR 70992,Dec. 20, 1999; 65 FR 80735, Dec. 22, 2000; 66 FR66295, Dec. 26, 2001]

PART 204—RESERVE REQUIREMENTSOF DEPOSITORY INSTITUTIONS(REGULATION D)

Sec.204.1 Authority, purpose and scope.204.2 Definitions.204.3 Computation and maintenance.204.4 Transitional adjustments in mergers.204.5 Emergency reserve requirement.204.6 Supplemental reserve requirement.204.7 Penalties.204.8 International banking facilities.204.9 Reserve requirement ratios.

INTERPRETATIONS

204.121 Bankers’ banks.204.122 Secondary market activities of

international banking facilities.204.123 Sale of Federal funds by investment

companies or trusts in which the entirebeneficial interest is held exclusively bydepository institutions.

204.124 Repurchase agreement involvingshares of a money market mutual fundwhose portfolio consists wholly of UnitedStates Treasury and Federal agency se-curities.

204.125 Foreign, international, and supra-national entities referred to in§§ 204.2(c)(1)(iv)(E) and 204.8(a)(2)(i)(B)(5).

204.126 Depository institution participationin ‘‘Federal funds’’ market.

204.127 Nondepository participation in‘‘Federal funds’’ market.

204.128 Deposits at foreign branches guaran-teed by domestic office of a depositoryinstitution.

204.130 Eligibility for NOW accounts.204.131 Participation by a depository insti-

tution in the secondary market for itsown time deposits.

204.132 Treatment of loan strip participa-tions.

204.133 Multiple savings deposits treated asa transaction account.

204.134 Linked time deposits and trans-action accounts.

204.135 Shifting funds between depositoryinstitutions to make use of the low re-serve tranche.

204.136 Treatment of trust overdrafts for re-serve requirement reporting purposes.

AUTHORITY: 12 U.S.C. 248(a), 248(c), 371a,461, 601, 611, and 3105.


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