That comment made my day, Dan. It's always good to pull us back to reality...

I sent an email to the FDIC examiner that conducted our HMDA data validation in our last compliance exam asking for an interpretation since the FDCI examines our data. When I get a reply I will share it.

My gut is telling me we will report whatever credit score is used from the consumer report regardless if it's applicant #1 or applicant #21.

I'm guessing you are right about that, but guessing is all we can do at this point. I'm looking forward to seeing the FDIC response.

Dan, at this point I think that's the only option. So it looks like this will be a manual entry into our LOS, I was hoping that it was automated.

I received an email this morning from my contact at the FDIC and she informed me:

We are seeking further guidance on your question to provide a response. Thank you for your patience.

So, I will keep you updated as I am updated.

Thanks for the update!

HMDA Edit V668 around Credit Score says in part:

“If Ethnicity of Applicant or Borrower: 1 equal 4; and Race of Applicant or Borrower: 1 equals 7; and Sex of Applicant or Borrower equals 4 indicating the applicant is a non-natural person then Credit Score of Applicant or Borrower must equal 8888 indicating not applicable."

Doesn't that then imply that you are reporting the credit scores for the first two borrowers on your loan application, regardless of however many additional borrowers you have? Obviously there are different rules if you're taking an average of all of their scores etc., but in the simple example of 3 co-borrowers, all of whom you used their individual credit score as part of your decisioning process, it seems this suggests you need to report your primary 2 borrowers that you collected GMI on.

Doesn't that then imply that you are reporting the credit scores for the first two borrowers on your loan application, regardless of however many additional borrowers you have?

That's what we are trying to establish.

I agree if you use the 2nd co-applicant/co-borrower's credit score then you report 8888 for the applicant/borrower and the 1st co-applicant/co-borrower. However the way the regulation and the explanation in the Small Entity Guide are written there is room for interpretation that you report the credit score used in the credit decision regardless if it belonged to the applicant/borrower or the 23rd co-applicant/co-borrower.

After sending a follow-up email this morning I've been informed the question has been forwarded to the Washington office.

Can anybody tell me what code 7777-Credit score is not a number pertains to? I looked at the field key and still have no idea what this means. It shows up as an option in our LOS and I want to make sure I understand it's meaning.

I've never seen this either, but I'm going to assume you report 7777 if someone has a credit report that has a "pass" or "fail" vs. a number.

I haven't seen this either but believe it could be some sort of rare internal scoring system that produces an "accept" or "deny." The October 2017 CFPB HMDA filing Instructions don't really help but only reference code 7777 a few times:

Descriptions: 7777. Credit score is not a number

c. Use Code 7777 if your institution relied on a credit score that is not a number.

1) If Credit Score of Applicant or Borrower equals 7777 indicating a credit score that is not a number, then Applicant or Borrower, Name and Version of Credit Scoring Model should equal 7 or 8.

Wouldn't you use 7777 when no score populates? This happens occasionally to us. (And we rely on it since we don't have an investor that will purchase the loan)

I believe you would use code 8888 when there is no score.

From the FIG:

a. Use Code 8888 if the requirement to report the credit score does not apply to the
covered loan or application that your institution is reporting.

I should clarify. The CFPB had replied a few times to use "0" if no score populates, but when they came out with the FIG, it appears that 8888 should now be used.

Adam is right. No score = 8888 (from the latest FIG). They originally said to report "0", but changed their answer.

I know you both hold some weight in the forums so pardon my ignorance here, but I am not reading the FIG that way.

a. Use Code 8888 if the requirement to report the credit score does not apply to the covered loan or application that your institution is reporting.

The credit score (or lack thereof) does apply to the covered loan (since we're going to deny the application due to it), there just isn't one that pulls with the file. Since it does apply, why would it be not applicable? Am I missing something obvious?

It's probably the term 'the credit score' which implies there is one.

(15)(i) Except for purchased covered loans, the credit score or scores relied on in making the credit decision . . .

If a credit score was not generated due to lack of credit, etc. then how was a credit score relied on in the loan decision? There was no credit score to rely on.

The preamble to the 9/13/17 HMDA amendments states the following:
"Regarding the request for guidance on reporting when a credit score is requested but none is available, § 1003.4(a)(15) requires reporting the credit score or scores relied on in making the credit decision, so a financial institution would report that the requirement is not applicable if it did not rely on a credit score.

The FIG states the following:
a. Use Code 8888 if the requirement to report the credit score does not apply to the
covered loan or application that your institution is reporting.

The CFPB reference chart states to list na for:
Transactions for which the credit decision was made without relying on a credit score, Comment 4(a)(15)-5;

The commentary states the following:
5. Transactions for which no credit score was relied on. If a financial institution makes a credit decision without relying on a credit score for the applicant or borrower, the financial institution complies with § 1003.4(a)(15) by reporting that the requirement is not applicable.

To clarify further, they didn't make it too clear in the referenced section of the FIG, but the CFPB HMDA reference chart clearly states: "Code 8888—Not applicable."

If we pull an applicant's credit score, but ultimately deny the loan based on something else (insufficient collateral), should we be reporting the credit score on our LAR in 2018? To this point, when we denied an applicant with good credit a loan due to insufficient collateral, we did NOT indicate on the FCRA adverse action notice that the credit report was a determinant in our credit decision (and this point was reinforced by FDIC examiners). But with the new HMDA reporting, I'm seeing guidance that if you so much as pull a credit score you need to report on your LAR, even if the score was only used to allow the application to proceed to the next stage (and again, using my example, before possibly finding out the collateral was a no-go and declining). Any thoughts?

The credit score does not have to be a contributory factor to the adverse action.

Paragraph 4(a)(15)

1. Credit score—relied on. Except for purchased covered loans, § 1003.4(a)(15) requires a financial institution to report the credit score or scores relied on in making the credit decision and information about the scoring model used to generate each score. A financial institution relies on a credit score in making the credit decision if the credit score was a factor in the credit decision even if it was not a dispositive factor. For example, if a credit score is one of multiple factors in a financial institution's credit decision, the financial institution has relied on the credit score even if the financial institution denies the application because one or more underwriting requirements other than the credit score are not satisfied.

I would. The commentary states:
"A financial institution relies on a credit score in making the credit decision if the credit score was a factor in the credit decision even if it was not a dispositive factor. For example, if a credit score is one of multiple factors in a financial institution's credit decision, the financial institution has relied on the credit score even if the financial institution denies the application because one or more underwriting requirements other than the credit score are not satisfied."


This is a slightly different topic and I'm not exactly sure what others will say, but I have never seen anything that clearly says you must keep the the credit score off the adverse action notice if it wasn't a factor for the denial. The only thing I see in the rule is that you must include it when it was a factor in the denial. Here is what the 2011 preamble to the AA notice states:
"A creditor that obtains a credit score and takes adverse action is required to disclose that score, unless the credit score played no role in the adverse action determination.

I know there are examiners out there who say it cannot be on the adverse action notice, but I have never been able to find a citation that says you can't have it there if it wasn't a reason for denial. Basically, the rule says you must have it if you used it but does not clearly say you can't include it if you didn't use it. If I am missing a citation or other guidance, I would love to know what it is as no one has been able to show it to me yet.

Either way, these are two different rules and the new HMDA guidance seems pretty clear to me that you list it even if it was not a "dispositive factor."