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HMDA - Government Monitoring Information

Q: We understand the Government Monitoring Information ("GMI") answer options have changed with the new HMDA rules, but can you explain our reporting obligations?

A: Under the new HMDA rules, if an applicant chooses not to provide information related to his/her sex, race and/or ethnicity and the application is taken in person or by electronic media with video component, you must now report how you collected such information (i.e. whether reported based on visual observation/surname or not).

If an applicant chooses to answer these questions, you must allow the applicant to provide more than one ethnicity and race and you must allow the applicant to self-identify using both aggregated categories and disaggregated ethnic and racial subcategories.

For example,

  1. Aggregated Category: Hispanic or Latino

  2. Disaggregated Subcategories: Mexican, Puerto Rican, Cuban, etc.

Additionally, applicants must be permitted to provide ethnicity and/or race information that is not provided for on the collection form (i.e. free form text).  However, if the applicant chooses not to answer and you identify based on visual observation or surname you cannot use the disaggregated subcategories.

The HMDA Rule provides a transition provision that allows a financial institution to report the applicant's ethnicity, race, and sex under the new HMDA rule requirements in effect at the time that the financial institution collects the information, not when the financial institution takes final action on the application. Thus, if a financial institution receives an application prior to January 1, 2018, but final action is taken on or after January 1, 2018, the financial institution complies with the new rules if it collects the information in accordance with the requirements in effect at the time the information was collected.

Many financial institutions have begun to require the collection of the new GMI information and adopted the use of the Demographic Information Addendum issued by Fannie Mae.  If you intend to use this document, the Agencies advised that you should cross out or delete Section X of the Uniform Residential Loan Application ("URLA") and replace it with the Addendum. The Addendum may be found at: https://www.fanniemae.com/content/guide_form/urla-demographic-addendum.pdf 

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