The CFPB has finalized a rule on the collection of government monitoring information under Regulation B, much as it was proposed earlier this year.
The Rule will allow some flexibility for those of you needing to comply with the new HMDA rule as well as those wanting to use the new URLA form, as it allows:
- Compliance with Regulation B by collecting applicants’ ethnicity and race using the same categories we do today or the categories and subcategories that will be used under the HMDA Rule changes and the revised Uniform Residential Loan Application Form. Note: If you’re collecting information based on visual observation or surname, you can only pick from the main categories, not from the various subcategories provided.
- Non-HMDA banks to collect applicant ethnicity, race and sex for HMDA-reportable loans if HMDA data was submitted for any of the last five years;
- Collection of applicant ethnicity, race, and sex for HMDA-reportable loans if you exceeded the applicable reporting threshold in the prior year;
- HMDA banks to collect applicant ethnicity, race, and sex information for open or closed-end HMDA-reportable credit that it’s not required to be reported IF the Bank submits the data or has submitted data on that type of credit in any of the last five years; and,
- HMDA Banks or a bank that has submitted HMDA data in the last 5 years to collect applicant ethnicity, race, and sex on otherwise HMDA-reportable applications that are primarily for a business/commercial purpose, even if not for the purchase, refinance, or home improvement of a dwelling
The Rule also states that ethnicity, race, and sex may be collected for an additional co-applicant when there is more than one.
Of course, anytime you obtain the information, you have to retain it under Regulation B’s general guidelines of 12 months (commercial) or 25 months (consumer). A sample data collection model form for collecting GMI as we do today was also provided with the Rule. These changes are effective January 1, 2018.