The Home Mortgage Disclosure Act (or HMDA, pronounced ) is a United States federal law that requires certain financial institutions to provide mortgage data to the public. Congress enacted HMDA in 1975.
Purposes
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.
Who reports HMDA data? 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 are different for depository and non-depository institutions and are available on the FFIEC website. Additional information on institutional and transactional coverage for HMDA data collection years 2017 and onward can be found on the CFPB's regulation implementation page. The datasets containing information on HMDA reporters are the HMDA Panel and HMDA Transmittal Sheet.
In 2012, there were 7,400 institutions that reported a total of 18.7 million HMDA records.
Details of the law
Companies covered under HMDA are required to submit a Loan Application Register (LAR) to the FFIEC via the CFPB which acts as the HMDA processor. The LAR must contain the data outlined in the Filing Instruction Guide (FIG) for the relevant collection year for all covered applications or loans.
Collection of HMDA data
For data from years prior to 2017 reporting institutions were required to submit their LARs by March 1 to the Federal Reserve Board on behalf of 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 an online portal named the HMDA Platform. The first year of data submitted via this process was 2017.
The Dodd-Frank expanded the data fields collected under HMDA to provide better regulatory and public visibility into mortgage markets. Some changes include:
the option for applicants and borrowers to self report race and ethnicity information in disaggregated format. The collection of race and ethnicity data requires a specific exemption from Regulation B, which implements the Equal Credit Opportunity Act (ECOA). other expanded demographic data expanded data on loan features and types use of Legal Entity Identifier (LEI) as a primary identifier for HMDA reporters use of Universal Loan Identifier (ULI), unless claiming partial exemption, that incorporates a check digit for accuracy changes in units of measure or enumerations to previously collected fields
On behalf of the FFIEC, the CFPB maintains a HMDA compliance guide that is publicly available and contains information on how and what to report in the data collection. Additional tools are made available by the FFIEC to facilitate compliance with Regulation C.
The Economic Growth, Regulatory Relief and Consumer Protection Act allowed small banks to claim partial exemptions from reporting certain data fields if their Community Reinvestment Act ratings were not low and they were below certain counts for mortgage activity.