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Question:

This is in regards to reporting Government Monitoring Information. We are a wholesale lender and when we receive a file from a broker we enter the application information into our originating system. On a telephone or mailed application, there will be times when the broker checks the box "I do not wish to furnish this information" and the box "male." We enter that same information into our system. However, when we pull our LAR, "info not provided" is what appears (not that male was checked). This only happens on telephone and mailed applications. On face to face applications, all the boxes that are checked transfer over to the LAR. The originating and HMDA reporting software is widely used in the industry. When I asked them about this issue, I was told it's because when a borrower checks the box "I do not wish to furnish this information" (on a telephone or mailed application), the other information is not required to be collected so it is not reported on the LAR. Our bank examiner does not agree with this and says we are required to report everything that is on the application (even on a telephone or mailed application). Who's right?

Answer:

For a telephone application, if the applicant states they do not want to furnish the information then that is what is to be reported; the interviewer/broker is not to guess the applicant's race, sex, etc. from talking to the applicant over the phone. For a mailed-in application, if the applicant checks the "I do not want to furnish the information," but also checks the other boxes, then you report what was checked by the applicant. Your application procedures should include documenting how the application is received.

In both a mailed-in and a telephone application, if the applicant states they do wish to furnish the information, but you meet with the applicant in person anytime during the application process you must then report the information based on visual observation. This does not apply if the only time you meet with them is after the application process in completed, such as at the closing. See page D-13 of the HMDA Reporting Getting It Right guidelines.

First published on BankersOnline.com 10/15/07