Staff Commentary on HMDA Reporting Requirements
The Board of
Governors of the Federal Reserve (Federal Reserve) has adopted its
staff s commentary that interprets Regulation C, which implements
the Home Mortgage Disclosure Act (HMDA). The attached commentary
is being provided to all FDIC-supervised institutions because of
the interest expressed by many institutions that may become subject
to Regulation C as a result of future mergers and acquisitions.
A Guide to HMDA Reporting -- Getting It Right!, the Federal
Financial Institutions Examination Council s (FFIEC) annual publication,
was the only guidance available from the Federal Reserve on the
requirements of Regulation C and its Appendix A, the instructional
portion of the regulation. The new commentary complements Appendix
A and should he read alongside it for fuller understanding. The
informal presentation in the Guide will remain a helpful reference
for lending institutions, especially its flow chart depicting HMDA
coverage criteria, the step-by-step guidance to completion of the
report form, and the table of state and county codes for counties
in Metropolitan Statistical Areas (MSAs). The 1996 Guide will be
mailed in March to HMDA-reporting institutions supervised by the
The staff commentary
interprets many complex data reporting issues, including:
of reporting requirements for transactions involving refinancings,
broker and investor institutions, affiliate bank underwriting,
participations, and assumptions. For example, Paragraph 1(c)(2),"Scope,"
clarifies that transactions involving renewal, modification, extension,
or consolidation -- but not satisfaction and replacement -- of
an existing obligation are not refinancings for HMDA purposes
and, thus, are not reported.
of an application, branch office, dwelling, home- improvement
loan and home-purchase loan. The discussion of applications concludes
that prequalification requests are not applications for purposes
of Regulation C, even though they may be applications under the
Federal Reserve s Regulation B, which implements the Equal Credit
of institutions that are exempt from HMDA. Building on ( the 1995
Guide s scenarios is the addition of the case in which a newly
formed institution acquires a covered institution. Post-merger
data collection for the year of the merger is optional; however,
reporting pre-merger transactions for the covered institution
of issues concerning compilation of loan data, including reporting
of counteroffers, rescinded transactions, conditional approva1s,
and applications approved but not accepted; home improvement loans
involving multiple properties; and collecting data on applicants
Also, the commentary
deals with two technical changes that affect the collection of data
during calendar year 1996. These technical changes have resulted
in two revisions to the CY96 FFIEC HMDA data collection software,
which has been provided to all FDIC-supervised HMDA-reporting institutions.
The changes are:
A of Regulation C instructs institutions to enter owner- occupancy
code 3 ("not applicable") for a multi-family property that houses
five or more families, The commentary allows, hut does not require,
an institution to report the actual owner-occupancy status of
a multi-family property (Paragraph 4(a)(3),"Occupancy").
may report property location by entering the code for a block
numbering area (BNA) (Paragraph 4(a)(6), "Property ( location").
Institutions that are required by the recently revised Community
Reinvestment Act regulations (12 CFR 345.42) to report lending
data are now required, by Regulation C, to record property locations
of all HMDA-reportable loans and app1ications (12 CFR 203.4).
For those locations within BNAs, the BNA number may be recorded.
Reserve will revise the commentary as needed to include clarifications
of other issues and future amendments to Regulation C. If you have
questions concerning the staff commentary or other HMDA issues,
Please contact your FDIC regional office.