HMDA Reporting Requirements for ABC Bank
Question
John and Elise Fernandez apply to ABC Bank for a loan to purchase a manufactured home. ABC Bank is a community bank with approximately $100 million in assets, and the home would be located outside of the bank's metropolitan area. Mr. and Mrs. Fernandez complete an in-person application for a mobile home that is denied by the bank due to insufficient income. Which piece of information on the Fernandez application is ABC Bank NOT required to report on its HMDA LAR?
Answers
Explanations
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A. B. C. D.D
The Home Mortgage Disclosure Act (HMDA) requires certain financial institutions to collect and report information about their mortgage lending activities, including information about the applicants and the properties they seek to purchase.
In this scenario, ABC Bank is required to report certain information about the Fernandez's loan application on its HMDA Loan Application Register (LAR), which is used by regulators to monitor compliance with fair lending laws.
The question asks which piece of information on the Fernandez application is NOT required to be reported on the bank's HMDA LAR. The options are:
A. The ethnicity of the applicants B. The race of the applicants C. The purpose of the loan application D. The metropolitan area where the home will be located
Option C, the purpose of the loan application, is not required to be reported on the bank's HMDA LAR.
Under HMDA, the bank must report information about the applicants' race, ethnicity, and gender, as well as information about the loan amount, type, and purpose, and the location of the property. However, the purpose of the loan application is not required to be reported.
Option A, the ethnicity of the applicants, and option B, the race of the applicants, are both required to be reported under HMDA. The purpose of collecting this information is to monitor and prevent discrimination in lending based on race, ethnicity, and other protected characteristics.
Option D, the metropolitan area where the home will be located, is also required to be reported on the bank's HMDA LAR. This information is used to determine whether the bank is serving the housing needs of its community and to identify potential patterns of redlining or discriminatory lending practices.
In summary, ABC Bank is NOT required to report the purpose of the loan application on its HMDA LAR.
