Question & Answer

Question: When we take an application for a HMDA-reportable loan over the telephone and close the loan in the bank, should we collect monitoring data for the Loan Application Register or is the application exempt from that requirement because it was taken over the phone?

Answer: Under Regulation B, phone applications are exempt from monitoring data collection. Section 202.13(b)-3. That commentary paragraph does advise that the bank should note on the application the fact that it was taken over the phone or through the mail to explain the absence of the data.HMDA and Regulation C impose a slightly stricter requirement. The exemption applies unless and until someone in the bank has a personal meeting with the applicant. At that time, even if it is to close the loan, the monitoring data should be collected. This policy insures that the HMDA LAR contains information that is as complete as possible. Section 203.4(a)(7)-3.

Copyright © 1996 Compliance Action. Originally appeared in Compliance Action, Vol. 1, No. 18 & 19, 12/96