Explore This Section

Compliance Corner: Third Quarter 2003

OMB's Final Standards for Metropolitan and Micropolitan Statistical Areas: Implications for 2004 HMDA Reporting

The Office of Management and Budget (OMB) adopted final standards for Metropolitan and Micropolitan Statistical Areas in 2000 and, on June 6, 2003, issued a list of these areas, including new Metropolitan Statistical Areas (MSAs) and revisions to existing areas. In some cases, larger MSAs are now divided into Metropolitan Divisions. In addition to extensive revisions to existing MSAs, there are also 49 new Metropolitan Statistical Areas, bringing the total number of MSAs to 370.

The OMB issued the update of statistical areas in Bulletin No. 03-04, Revised Definitions of Metropolitan Statistical Areas, New Definitions of Micropolitan Statistical Areas and Combined Statistical Areas, and Guidance on Uses of the Statistical Definitions of These Areas.1 The attachment to the bulletin provides eight lists of areas with their titles, definitions, and principal cities.2

2004 HMDA Reporting: MSA/MD
As would be expected, these changes will affect HMDA reporting, beginning with reporting of data for the 2004 calendar year.

For 2004 calendar year HMDA data, the revised and new Metropolitan Statistical Areas or Metropolitan Divisions (where appropriate) will be used to help identify geographic information about the property location. Reflecting the addition of Metropolitan Divisions to large MSAs, the Metropolitan Area (MA) reference used in 2003 HMDA data will be changed to Metropolitan Statistical Area/Metropolitan Division (MSA/MD).

The new list also contains 565 Micropolitan Statistical Areas. However, Micropolitan Statistical Areas will not be used for HMDA reporting purposes. In addition, the new list contains 116 Combined Statistical Areas, which consist of combinations of two or more Metropolitan and/or Micropolitan Statistical Areas. Combined Statistical Areas will also not be used in HMDA reporting.

Each MSA has at least one urbanized area of 50,000 or more population. There are 11 instances (Boston, Chicago, Dallas, Detroit, Los Angeles, Miami, New York, Philadelphia, San Francisco, Seattle, and Washington) where an MSA containing a single core with a population of 2.5 million or more has been subdivided to form smaller groupings of counties referred to as Metropolitan Divisions. In those cases, financial institutions should use the appropriate Metropolitan Division's 5-digit code in the MSA/MD column of the Loan Application Register (LAR), not the Metropolitan Statistical Area code assigned to the larger populated area.

2004 HMDA Reporting: Covered Institutions
For coverage purposes, an institution that has offices in Micropolitan Statistical Areas only is not subject to HMDA reporting. If the institution, however, has a home or branch office in a Metropolitan Statistical Area or Metropolitan Division and meets all other reporting criteria, it is subject to HMDA reporting. When an institution is subject to HMDA reporting, it must report all mortgage lending activity.

2004 HMDA Reporting: Property Information
For properties located in Micropolitan Statistical Areas, or not located in a Metropolitan or Micropolitan Statistical Area at all, the institution should report "NA" in the MSA/MD column of the LAR. In the state and county fields, the institution should report the 2-digit state and 3-digit county codes as specified by the U.S. Department of Commerce in its Federal Information Processing Standards (FIPS) publication. Because the 2000 Census tracted all areas, the institution should report the census tract number in the census tract field.

However, if the institution is not subject to CRA reporting requirements, the institution has the option to enter "NA" in all four fields.

The New Areas
The attached table lists the 2003 Metropolitan and Micropolitan Statistical Areas and related Metropolitan Divisions and Components in Pennsylvania, Delaware, and New Jersey. The two new Metropolitan Statistical Areas and the new Micropolitan Statistical Areas are highlighted.

2003 Metropolitan and Micropolitan Statistical Areas and related Metropolitan Divisions and Components in Pennsylvania, Delaware, and New Jersey PDF Icon (96 KB, 3 pages)

The full list of MSAs is available on the U.S. Census Bureau's website External Link.

Assistance with the New Rules
The Compliance/CRA Examinations Unit will conduct training on the changes to HMDA later this year. This training will be targeted to compliance officers and those individuals responsible for preparing the HMDA LAR. In the interim, the FFIEC's File Specifications for HMDA data for the 1998 to 2004 reporting periods might be a useful resource. 3

If you have any questions on the changes to the Metropolitan and Micropolitan Statistical Areas and the implications for HMDA reporting, please contact your primary banking regulator. If you are supervised by the Federal Reserve Bank of Philadelphia, please contact one of the following staff in the Consumer Compliance/CRA Examinations Unit:

  • Constance Wallgren, Manager
    through the Regulations Assistance Line at (215) 574-6568
  • John Fields, Supervising Examiner
    through the Regulations Assistance Line at (215) 574-6568

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.