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Thursday, April 17, 2014

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Compliance Corner: First Quarter 2005

Compliance Alert: HMDA Compliance Resource Tools

Due to the numerous changes to the Home Mortgage Disclosure Act (HMDA), financial institutions should have developed new policies, procedures, and training to ensure compliance with the new provisions of the law. The federal banking regulators have created several tools to assist financial institutions in complying with the law.

Federal Reserve Bank of Philadelphia Guidance
HMDA Reporting: Understanding The Changes To Regulation C
As announced in the second quarter 2004 issue of Compliance Corner, the Federal Reserve Bank of Philadelphia produced a CD-ROM to assist Third District financial institutions in understanding the changes to Regulation C, which implements the Home Mortgage Disclosure Act (HMDA).1 The training module highlights key concepts that management should be familiar with before preparing the 2004 HMDA Loan Application Register.

The CD-ROM program is based on a 2003 presentation by the Federal Financial Institutions Examination Council (FFIEC) and contains appropriate links to reference and resource materials, including links to the Internet.

If you are interested in obtaining the CD-ROM, please contact either Elizabeth Rozsa or John Fields through the Regulations Assistance Line at (215) 574-6568.

FFIEC Guidance
FFIEC Additional Guidance
Data for many of the new HMDA fields approved in 2002 was collected for the first time in 2004. Based upon analysis of preliminary 2004 HMDA data, there appears to be some confusion about how to properly collect and report these new data fields. The FFIEC issued a guidance letter on November 29, 2004 informing HMDA reporters of the correct method for collecting and reporting these data fields so that any required corrective action could be taken prior to submission. The guidance letter is available on the FFIEC web site at www.ffiec.gov/hmda/pdf/FFIECguidance2004.pdf.External Link

Specific areas of concern noted in the letter include the following:

  • The correct application of the transition rules
  • Ethnicity, race, and sex data
  • Preapprovals
  • Property location
  • Lien status
  • The Home Ownership and Equity Protection Act (HOEPA) status
  • The reporting of loans sold and purchased

HMDA Transition Rules
Information about the HMDA transition rules is available on the FFIEC website at www.ffiec.gov/hmda/pdf/transitionrules.pdf.External Link

A Guide To HMDA Reporting: Getting It Right
The latest version of this publication, which provides detailed information on the correct methods of collecting and reporting data, is available on the FFIEC website at www.ffiec.gov/hmda/pdf/2004guide.pdf.External Link

The views expressed in this article are those of the author and are not necessarily those of this Reserve Bank or the Federal Reserve System.

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