HMDA Surfing

by Richard C. Insley, CRCM, CBCO

We do not know who coined the saying "March comes in like a lion and goes out like a lamb", but the first part could easily have been the work of a HMDA compliance officer!

January and February of each year are the peak of HMDA season. Fourth quarter loans must be geocoded, the past year's data get a final review and one or more submissions are compiled for delivery to your regulator by March 1. By the end of March, the public release must be ready. At the same time, any new procedures must be implemented for the new year.

This is the best time to reevaluate your bank's HMDA compliance resources and processes. Maybe you've outgrown manual methods and are shopping for a software package or an outsourcer. Maybe you're in the market for one of the newer software products that offers CRA business development features in addition to technical HMDA compliance.

Where do you turn for information? To the Internet, of course.

The Regs and Instructions
The FFIEC offers lots of information about the regs and reporting requirements at http://www.ffiec.gov/hmda/. You will need the Adobe Acrobat Reader "helper" for your browser in order to use much of the information at this site. To get your free copy, surf on over to http://www.adobe.com. Hit the "Free software" button and select Acrobat Reader from about two dozen titles Adobe offers for free. Installation on your Mac or PC is simple and you're ready to reap the FFIEC's goodies.

In the "How to File" section, FFIEC provides a copy of the publication "A Guide to HMDA Reporting, Getting it Right!" While you're there, grab copies of the technical standards and "edits" for proper submissions. All of the "edits" are included: syntactical, validity and quality. Don't forget that your LAR submission(s) will be judged by these standards-you should run the same tests to reduce the chances you will have to resubmit. If you want an example of a correctly completed LAR, check out the "HMDA Code Sheet."

You will find a copy of the Commentary to Part 203 in the "Frequently Asked Questions" section. "History" and "More Introduction" sections offer background information on HMDA that might be useful as you prepare reports to your board and executive management.

If none of these resources holds the answer your questions, FFIEC offers a "HMDA Hotline." Both a telephone number and e-mail address (Hmdahelp@frb.gov) are provided. By using the e-mail option, you will be able to save the answers you get. Always document your discussions with the experts. If the same point is questioned during a compliance examination, you will be able to show that you followed agency advice.

Geocoding Cleanup
Everyone has a handful of loans that defy ordinary geocoding methods. The larger your lending territory, the more you will have. These loans tend to be in small rural places and in newly developed subdivisions with new street names.

Etak, Inc. has one of the best sites for free geocoding assistance. Etak's "Eagle Geocoder," is located at http://www.geocode.com/eagle.html-ssi. With "Eagle Geocoder," you enter the property address & get a map plus the latitude-longitude coordinates, FIPS County, MCD, Census Tract Number and Block Group Number. Results can be printed, one property at a time, if you wish. MapQuest at http://www.mapquest.com also offers a good mapper, but it doesn't report the Census designation of a property. Nevertheless, MapQuest is a valuable "second opinion" of where the property is located.

No discussion of HMDA mapping resources would be complete without mention of the Bureau of Census' "Tiger Mapping Service." Go to http://www.census.gov, select "Access Tools", and then "Tiger Map Server." Learning to use the site takes a while and response times are often very slow. For best results visit early in the morning or on weekends when response times should be fastest. You will be rewarded with a wealth of statistics and a sophisticated map drawing utility.

Shopping for HMDA-related Products and Services
After this year's HMDA disclosure is on the way to your regulator, you will want to review and improve the process for the upcoming year.

Scores of vendors offer HMDA and CRA services and products. Hit the "Search our Databases" option at the FFIEC site http://www.ffiec.gov/hmda/ for a list of nearly 100 vendors. You can retrieve the vendor's address, phone number, the name of a sales representative and maybe a link to the vendor's WWW page.

Unfortunately, this listing does not include the nature of the vendors' products or product trade names. Maybe a few e-mails to the webmaster will encourage FFIEC to add this important data.

Internet search engines are also a handy way to find information about categories of products or vendors. Several good ones are listed below.

AltaVista:http://www.altavista.com/
HotBot:http://www.hotbot.com/
Webcrawler:http://www.webcrawler.com/
Yahoo:http://www.yahoo.com

What you Look Like to the Public
HMDA was enacted so that lending information would be available to the public, and with that information community advocates can monitor the performance of local lenders. In order to present the aggregate information to the public in a useable form, the regulators process it into a series of tables. FFIEC offers a variety of these data products (some are free) at its site. Perhaps the best source of free HMDA data, the Right to Know Network, can be accessed at http://www.rtk.net. This site addresses environmental hazards and redlining, two issues of concern to L&M communities. Use the "Search Databases" option and "HMDA" as your database. RTK's report generators allow you to view your bank's as well as your competitors' HMDA reports. You can obtain raw LAR data as well as filtered reports on total lending in the geographic area. Filters allow you to vary the scope of your review from an entire MSA down to one Census Tract and according to product type, minority population and income level. 1995 data became available at this site soon after it was released.

Conclusion
Several sites on the World Wide Web offer free and useful information for the HMDA specialist. Plan to use these resources to supplement your HMDA compliance program. A word of caution is in order, however. Before using any information, consider its source and whether it seems to be up to date and complete. Information is no more reliable than the organization that provides it. Don't place total reliance on WWW sources for critical information-sites come and go as funding levels change. Add the addresses of useful sites to your bookmarks and use your search engines to look for new ones.

ACTION STEPS

Review the effectiveness of your system. Talk with the people that use it to find out how they like it - and whether they think it works efficiently.
Review your out-of-MSA loans to see how well your system has been at finding the census tracts. If there are problems, try some of the suggestions in this article.
Be sure to look at how you look to the public.