On March 24, 2017, the CFPB announced a proposal to amend various sections of Regulation B regarding collection of an applicant’s ethnicity and race information. These proposed amendments are intended to align with HMDA’s demographic information collection requirements that take effect January 1, 2018.
Today’s HMDA rules require banks to collect and report an applicant’s information using the ethnicity and race categories set forth in §1002.13(a)(1)(i) of Regulation B. The new HMDA rules; however, will allow applicants to self-identify using ethnicity and race subcategories, which will no longer correspond with Regulation B. The effective date for the proposal would the same day the new HMDA rules take effect (January 1, 2018).
In a nutshell, the proposal would:
- Allow lenders to collect applicant information when they would not otherwise be required to do so. This is, of course, as long as they collect the information in compliance with HMDA.
This will benefit those banks that may not be subject to HMDA one year and then subject to HMDA the next or vice versa. They will be able to maintain consistent compliance procedures from year-to-year.
- Allow lenders additional flexibility to collect an applicant’s information using either today’s ethnicity and race categories or the new HMDA ethnic and racial subcategories.
- Remove and add optional Model forms from Appendix B to Regulation B.
- Amend Regulation B to also include requirements to retain any additional information obtained pursuant to the proposal.
Comments on the proposal are due 30 days after it is published in the Federal Register.