CFPB Issues New HMDA FAQ

The CFPB recently published a response to a HMDA frequently asked question related to race, ethnicity, or sex information for mail, internet, or telephone applications where the applicant does not provide this information – specifically, how to report whether this information was collected on the basis of visual observation or surname.

Where an applicant does not provide responses to such questions and financial institutions do not have the opportunity to collect this information based on visual observations (i.e., there is no in person meeting during such an application process), financial institutions may report one of two things: (i) the information was not collected on the basis of visual observation or surname (Code 2); or (ii) the requirement to report this data field is not applicable (Code 3). For consistency purposes, the CFPB suggests, but does not require, that financial institutions use Code 2.