By Aaron Thompson, Senior Examiner, Federal Reserve Bank of Richmond
Government monitoring information (GMI) describes the loan applicant demographic data creditors must gather under Regulation B, which implements the Equal Credit Opportunity Act (ECOA), and Regulation C, which implements the Home Mortgage Disclosure Act (HMDA), whenever customers make an application for particular home mortgages. The requirement that is regulatory loan providers to get such information goes back to 1977 once the Federal Reserve Board (Board) amended Regulation B to need creditors to gather monitoring information about age, intercourse, marital status, and race or nationwide beginning on home-purchase loans and refinancing deals. 1 The Board explained that these details would assist federal regulators detect home loan discrimination that is lending. Customer groups additionally thought that this information could be valuable in detecting home loan discrimination that is lending. 2
Likewise, in 1989, the finance institutions Reform, healing and Enforcement Act amended the HMDA to need creditors to get battle, intercourse, and income information from candidates for home loan loans to assist 3 In 2002, the Board amended Regulation C to conform the number of battle and ethnicity information to modifications used because of the workplace of Management and Budget. 4 Overall, the range for the HMDA information collection demands is wider compared to ECOA’s requirement due to the fact HMDA relates to all home mortgages, including home-improvement loans.
On the basis of the frequency of assessment violations, complying with GMI needs could be challenging. Regarding the one hand, Regulation B generally forbids creditors from gathering information regarding competition, color, religion, nationwide beginning, or intercourse “to discourage discrimination, on the basis of the premise that when creditors cannot ask about or note candidates’ individual characteristics, such as for example nationwide beginning or competition, they truly are more unlikely unlawfully to cons 5 But the legislation also includes an exclusion in 12 C.F.R. §۱۰۰۲٫۱۳ that needs creditors to gather GMI for home-purchase and refinanced loans secured by an owner-occupied dwelling. 6 Similarly, Regulation C requires that creditors gather GMI for certain types of home loans. Therefore, creditors must be sure they will have procedures in position to ensure applicant info is maybe perhaps not gathered about battle, color, faith, nationwide beginning, or intercourse, except into the context of GMI for home loans, if they must gather specific information.
Analysis supervisory information from Federal Reserve System compliance exams reveals that GMI requirements regularly show up on the menu of the many often violated laws. These violations involve neglecting to gather GMI when required, gathering it you should definitely needed, oregon car and installment loan and recording the information that is GMI. This article reviews the GMI requirements under Regulations B and C, identifies common GMI violations in Federal Reserve System compliance examinations, and discusses the new GMI provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) to facilitate compliance.
Under 12 C.F.R. §۱۰۰۲٫۱۳(a)(1), a “creditor that gets a credit card applicatoin for credit primarily for the acquisition or refinancing of the dwelling occupied or even be occupied by the applicant as a major res 7 house equity personal lines of credit aren’t at the mercy of this part unless it’s readily obvious towards the creditor at application that the main function is always to buy or refinance a dwelling that is principal. 8 The required information could be noted on the application form form or on a split kind that references the applying. 9 The creditor must give an explanation for explanation the information and knowledge is required. In the event that applicant will not voluntarily prov 10 Unlike the HMDA, Regulation B doesn’t need creditors to aggregate the info as a register or report it.
The table below compares the given information creditors must collect under Regulations B and C.