Home Mortgage Disclosure Act

The Home Mortgage Disclosure Act (or HMDA, pronounced HUM-duh) is a United States federal law that requires certain financial institutions to provide mortgage data to the public. Congress enacted HMDA in 1975. The Home Mortgage Disclosure Act (or HMDA, pronounced HUM-duh) is a United States federal law that requires certain financial institutions to provide mortgage data to the public. Congress enacted HMDA in 1975. HMDA grew out of public concern over credit shortages in certain urban neighborhoods. Congress believed that some financial institutions had contributed to the decline of some geographic areas by their failure to provide adequate home financing to qualified applicants on reasonable terms and conditions. Thus, one purpose of HMDA and Regulation C is to provide the public with information that will help show whether financial institutions are serving the housing credit needs of the neighborhoods and communities in which they are located. A second purpose is to aid public officials in targeting public investments from the private sector to areas where they are needed. Finally, the FIRREA amendments of 1989 require the collection and disclosure of data about applicant and borrower characteristics to assist in identifying possible discriminatory lending patterns and enforcing antidiscrimination statutes. As the name implies, HMDA is a disclosure law that relies upon public scrutiny for its effectiveness. It does not prohibit any specific activity of lenders, and it does not establish a quota system of mortgage loans to be made in any Metropolitan Statistical Area (MSA) or other geographic area as defined by the Office of Management and Budget. US financial institutions must report HMDA data to their regulator if they meet certain criteria, such as having assets above a specific threshold. The criteria is different for depository and non-depository institutions and are available on the FFIEC website. In 2012, there were 7,400 institutions that reported a total of 18.7 million HMDA records. Companies covered under HMDA are required to keep a Loan Application Register (LAR). Each time someone applies for a home mortgage at an institution covered by HMDA, the company is required to make a corresponding entry into the LAR, noting the following information. For data from years prior to 2017 reporting institutions were required to submit their LARs by March 1 to the Federal Financial Institutions Examination Council (FFIEC), an interagency body empowered to administer HMDA. Pursuant to the Dodd–Frank Wall Street Reform and Consumer Protection Act as of 2018 HMDA data was to be submitted to the Consumer Financial Protection Bureau via online portal. The first year of data to be submitted via this process includes loans made in 2017. The Dodd-Frank bill also required several new and formerly non-public items be collected and released as a part of the HMDA dataset. Beginning with January 2018 lenders are required to report the following items that were formerly non-public information: The new requirements also require the collection of disaggregated data on Asian borrowers, identifying their ethnic origins with more precision.