Instructional Reminder Regarding: Collection of Applicant s Ethnicity, Race and Sex on the Loan Application Demographic Information Addendum

Transcription

1 Instructional Reminder Regarding: Collection of Applicant s Ethnicity, Race and Sex on the Loan Application Demographic Information Addendum The Government Monitoring Information (GMI) is now collected using the updated Demographic Information Addendum to comply with the new HMDA regulation. The Ethnicity and Race categories have been expanded to afford borrowers to provide more detailed information about their ethnicity and race through sub-categories. Applicants are allowed a great deal of flexibility when filling out the form (i.e. each applicant can choose any combination of ethnicity and race categories and subcategories, making as many selections as he or she sees fit, and can mark both male and female for sex). As before, applicants may elect to provide all, some, or none of their demographic information. This document provides instruction on how to complete the Demographic Information Addendum based on various application taken scenarios. Reminder: Federal regulations require lenders to inform applicant(s) that the information regarding ethnicity, race, and sex is being requested by the federal government for the purpose of monitoring compliance with federal statutes that prohibit creditors from discriminating against applicant on those bases. Refer to the Demographic Information Addendum, The purpose of collecting this information for exact disclosure language. General Instructions: IN A FACE-TO-FACE INTERVIEW: 1. Read the Purpose of collecting this information statement to the applicant at time of application (refer to Exhibit A). 2. If applicant provides, then record applicant s response by completing Ethnicity, Race, and Sex. 3. Also answer the three questions on how the Ethnicity, Race, and Sex was collected. Page 1 of 6

2 Exhibit A: Face-to-Face Interview Example Applicant provides data: Example: Complete the 3 options provided by the borrower and also answer 3 questions on how the Ethnicity, Race, and Sex was collected when application is taken in person and if applicant responds with: Hispanic, Mexican, White and Female. Page 2 of 6

3 IN A FACE-TO-FACE INTERVIEW, continued: 1. If applicant elects not to provide some or all of this information, federal law requires that you note the applicant s ethnicity, race and sex on the form, based on your visual observation or the applicant s surname (Refer to Exhibit B). Exhibit B: Face-to-Face Interview Example Applicant provides partial information or does not provide any information; Record Ethnicity and Race only at the aggregated level based on Visual Observations and surname: Example of incorrect completion: Borrower provides some information but not all; borrower only provides race as White. Interviewer would not be able to tell if the borrower s Ethnicity is Mexican based on visual observation or surname. Only the borrower may self-identify sub-categories of Ethnicity and Race. So Ethnicity was incorrectly completed in this example. Incorrect Incorrect; borrower did provide Race Incorrect; should be answered NO Page 3 of 6

4 Example of correct completion: Borrower provided Race but did not provide Ethnicity and Sex. Interviewer selects Hispanic and Female based on visual observation or surname and completes Race as provided by the borrower. Correct Answered No since borrower provided *Regarding collection of partial information: If the applicant chooses to provide only one or two of the three fields, the lender must permit this. However, the lender MUST complete the remainder based on visual observation or surname since the application was taken in a face-to-face interview. Page 4 of 6

5 IN A TELEPHONE INTERVIEW: 1. Read the Purpose of collecting this information statement to the applicant at time of application (refer to Exhibit C). 2. Record applicant s response by completing Ethnicity, Race, and Sex as given.* 3. If applicant does not wish to furnish any data or partial data, mark the appropriate box that applies or I do not wish to furnish this information and no further action is required. Exhibit C: Telephone Interview Example Applicant does not provide Ethnicity or Sex, but states Race as Indonesian: Note: To Be Completed by Financial Institution (for applications taken in person) boxes are left blank since the application was taken by telephone and not face to face. Page 5 of 6

6 APPLICATION COMPLETED BY THE APPLICANT AND SUBMITTED VIA MAIL, , OR THE INTERNET: 1. If an application is received entirely by mail or Internet and the applicant declines to provide information on ethnicity, race or sex, then you must select I do not wish to provide this information as applicable for Ethnicity, Race, and Sex. (Refer to Exhibit D).* Exhibit D: or Internet Example: Note: To Be Completed by Financial Institution (for applications taken in person) boxes are left blank since the application was taken by OR INTERNET and not face to face. *Regarding collection of partial information: If the applicant chooses to provide only one or two of the three fields, the lender must permit this and the lender MUST report any and all information collected. Page 6 of 6