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Federal Reserve System § 203.2
AUTHORITY: 12 U.S.C. 2801–2810. statements and will produce various re-
SOURCE: 54 FR 51362, Dec. 15, 1989, unless ports for individual institutions for
otherwise noted. each metropolitan statistical area
(MSA), showing lending patterns by lo-
§ 203.1 Authority, purpose, and scope. cation, age of housing stock, income
(a) Authority. This regulation is level, sex, and racial characteristics.
issued by the Board of Governors of the The disclosure statements and reports
Federal Reserve System (‘‘Board’’) pur- will be available to the public at cen-
suant to the Home Mortgage Disclo- tral data depositories located in each
sure Act (12 U.S.C. 2801 et seq.), as MSA. A listing of central data deposi-
amended. The information-collection tories can be obtained from the Federal
requirements have been approved by Financial Institutions Examination
the U.S. Office of Management and Council, Washington, DC 20006.
Budget under 44 U.S.C. 3501 et seq. and [Reg. C, 54 FR 51362, Dec. 15, 1989, as amended
have been assigned OMB Numbers 1557– at 63 FR 52142, Sept. 30, 1998]
0159, 3064–0046, 1550–0021, and 7100–0247
for institutions reporting data to the § 203.2 Definitions.
Office of the Comptroller of the Cur- In this regulation:
rency, the Federal Deposit Insurance (a) Act means the Home Mortgage
Corporation, the Office of Thrift Super- Disclosure Act (12 U.S.C. 2801 et seq.),
vision, and the Federal Reserve Sys- as amended.
tem, respectively; numbers for the Na- (b) Application means an oral or writ-
tional Credit Union Administration ten request for a home purchase or
and the Department of Housing and home improvement loan that is made
Urban Development are pending. in accordance with procedures estab-
(b) Purpose. (1) This regulation imple- lished by a financial institution for the
ments the Home Mortgage Disclosure type of credit requested.
Act, which is intended to provide the (c) Branch office means: (1) Any office
public with loan data that can be used: of a bank, savings association, or cred-
(i) To help determine whether finan- it union that is approved as a branch
cial institutions are serving the hous- by a federal or state supervisory agen-
ing needs of their communities; cy, but excludes free-standing elec-
(ii) To assist public officials in dis- tronic terminals such as automated
tributing public-sector investments so teller machines;
as to attract private investment to (2) Any office of a mortgage lending
areas where it is needed; and institution (other than a bank, savings
(iii) To assist in identifying possible association, or credit union) that takes
discriminatory lending patterns and applications from the public for home
enforcing antidiscrimination statutes. purchase or home improvement loans.
(2) Neither the act nor this regula- A mortgage lending institution is also
tion is intended to encourage unsound deemed to have a branch office in an
lending practices or the allocation of MSA if, in the preceding calendar year,
credit. it received applications for, originated,
(c) Scope. This regulation applies to or purchased five or more home pur-
certain financial institutions, includ- chase or home improvement loans on
ing banks, saving associations, credit property located in that MSA.
unions, and other mortgage lending in- (d) Dwelling means a residential
stitutions, as defined in § 203.2(e). It re- structure (whether or not it is attached
quires an institution to report data to to real property) located in a state of
its supervisory agency about home pur- the United States of America, the Dis-
chase and home improvement loans it trict of Columbia, or the Common-
originates or purchases, or for which it wealth of Puerto Rico. The term in-
receives applications; and to disclose cludes an individual condominium
certain data to the public. unit, cooperative unit, or mobile or
(d) Loan aggregation and central data manufactured home.
depositories. Using the loan data made (e) Financial institution means:
available by financial institutions, the (1) A bank, savings association, or
Federal Financial Institutions Exam- credit union that originated in the pre-
ination Council will prepare disclosure ceding calendar year a home purchase

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§ 203.3 12 CFR Ch. II (1–1–02 Edition)

loan (other than temporary financing to $28 million as of December 31, 1996.
such as a construction loan), including For subsequent years, the Board will
a refinancing of a home purchase loan, adjust the threshold based on the year-
secured by a first lien on a one- to four- to-year change in the average of the
family dwelling if: Consumer Price Index for Urban Wage
(i) The institution is federally in- Earners and Clerical Workers, not sea-
sured or regulated; or sonally adjusted, for each twelve-
(ii) The loan is insured, guaranteed, month period ending in November,
or supplemented by any federal agency; with rounding to the nearest million.
or The Board will publish any adjustment
(iii) The institution intended to sell to the asset figure in December in the
the loan to the Federal National Mort- staff commentary.
gage Association or the Federal Home (2) A for-profit mortgage lending in-
Loan Mortgage Corporation; stitution (other than a bank, savings
(2) A for-profit mortgage lending in- association, or credit union) is exempt
stitution (other than a bank, savings from the requirements of this part for
association, or credit union) whose a given calendar year if:
home purchase loan originations (in- (i) The institution had neither a
cluding refinancings of home purchase home office nor a branch office in an
loans) equaled or exceeded ten percent MSA on the preceding December 31; or
of its loan origination volume, meas- (ii) The institution’s total assets
ured in dollars, in the preceding cal- combined with those of any parent cor-
endar year. poration were $10 million or less on the
(f) Home improvement loan means any preceding December 31, and the institu-
loan that: tion originated fewer than 100 home
(1) Is for the purpose, in whole or in purchase loans (including refinancings
part, of repairing, rehabilitating, re- of home purchase loans) in the pre-
modeling, or improving a dwelling or ceding calendar year.
the real property on which it is lo- (b) Exemption based on state law. (1) A
cated; and state-chartered or state-licensed finan-
(2) Is classified by the financial insti- cial institution is exempt from the re-
tution as a home improvement loan. quirements of this regulation if the
(g) Home purchase loan means any Board determines that the institution
loan secured by and made for the pur- is subject to a state disclosure law that
pose of purchasing a dwelling. contains requirements substantially
(h) Metropolitan statistical area or MSA similar to those imposed by this regu-
means a metropolitan statistical area lation and contains adequate provi-
or a primary metropolitan statistical sions for enforcement.
area, as defined by the U.S. Office of (2) Any state, state-chartered or
Management and Budget. state-licensed financial institution, or
[Reg. C, 54 FR 51362, Dec. 15, 1989, as amended association of such institutions may
at 56 FR 59857, Nov. 26, 1991; 59 FR 63704, Dec. apply to the Board for an exemption
9, 1994] under this paragraph.
(3) An institution that is exempt
§ 203.3 Exempt institutions. under this paragraph shall submit the
(a) Exemption based on location, asset data required by the state disclosure
size, or number of home purchase loans. law to its state supervisory agency for
(1) A bank, savings association, or purposes of aggregation.
credit union is exempt from the re- (c) Loss of exemption. (1) An institu-
quirements of this part for a given cal- tion losing an exemption that was
endar year if on the preceding Decem- based on the criteria set forth in para-
ber 31: graph (a) of this section shall comply
(i) The institution had neither a with this part beginning with the cal-
home office nor a branch office in an endar year following the year in which
MSA; or it lost its exemption.
(ii) The institution’s total assets (2) An institution losing an exemp-
were at or below the asset threshold es- tion that was based on state law under
tablished by the Board. The asset paragraph (b) of this section shall com-
threshold was adjusted from $10 million ply with this regulation beginning with

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Federal Reserve System § 203.5

the calendar year following the year (2) Race or national origin, sex, and
for which it last reported loan data income data may but need not be col-
under the state disclosure law. lected for:
[Reg. C, 54 FR 51362, Dec. 15, 1989, as amended (i) Loans purchased by the financial
at 57 FR 56965, Dec. 2, 1992; 62 FR 28623, May institution; or
27, 1997; 63 FR 52142, Sept. 30, 1998] (ii) Applications received or loans
originated by a bank, savings associa-
§ 203.4 Compilation of loan data. tion, or credit union with assets on the
(a) Data format and itemization. A fi- preceding December 31 of $30 million or
nancial institution shall collect data less.
regarding applications for, and origina- (c) Optional data. A financial institu-
tions and purchases of, home purchase tion may report the reasons it denied a
and home improvement loans (includ- loan application.
ing refinancings of both) for each cal- (d) Excluded data. A financial institu-
endar year. These transactions shall be tion shall not report:
recorded, within thirty calendar days (1) Loans originated or purchased by
after the end of each calendar quarter the financial institution acting in a fi-
in which final action is taken (such as duciary capacity (such as trustee);
origination or purchase of a loan, or (2) Loans on unimproved land;
denial or withdrawal of an application), (3) Temporary financing (such as
on a register in the format prescribed bridge or construction loans);
in Appendix A of this part and shall in- (4) The purchase of an interest in a
clude the following items: pool of loans (such as mortgage-par-
(1) A number for the loan or loan ap- ticipation certificates); or
plication, and the date the application (5) The purchase solely of the right to
was received. service loans.
(2) The type and purpose of the loan. (e) Data reporting under CRA for banks
and savings associations with total assets
(3) The owner-occupancy status of
of $250 million or more and banks and
the property to which the loan relates.
savings associations that are subsidiaries
(4) The amount of the loan or appli- of a holding company whose total bank-
cation. ing and thrift assets are $1 billion or more.
(5) The type of action taken, and the As required by agency regulations that
date. implement the Community Reinvest-
(6) The location of the property to ment Act, banks and savings associa-
which the loan relates, by MSA, state, tions that had total assets of $250 mil-
county, and census tract, if the institu- lion or more (or are subsidiaries of a
tion has a home or a branch office in holding company with total banking
that MSA. and thrift assets of $1 billion or more)
as of December 31 for each of the im-
(7) The race or national origin and mediately preceding two years, shall
sex of the applicant or borrower, and also collect the location of property lo-
the gross annual income relied upon in cated outside the MSAs in which the
processing the application. institution has a home or branch of-
(8) The type of entity purchasing a fice, or outside any MSAs.
loan that the institution originates or
[54 FR 51362, Dec. 15, 1989; 55 FR 695, Jan. 8,
purchases and then sells within the 1990, as amended at 56 FR 59857, Nov. 26, 1991;
same calendar year. 56 FR 66343, Dec. 23, 1991; Reg. C, 59 FR 63704,
(b) Collection of data on race or na- Dec. 9, 1994; 60 FR 22225, May 4, 1995]
tional origin, sex, and income. (1) A fi-
nancial institution shall collect data § 203.5 Disclosure and reporting.
about the race or national origin and (a) Reporting to agency. By March 1
sex of the applicant or borrower as pre- following the calendar year for which
scribed in appendix B. If the applicant the loan data are compiled, a financial
or borrower chooses not to provide the institution shall send its complete loan
information, the lender shall note the application register to the agency of-
data on the basis of visual observation fice specified in Appendix A of this
or surname, to the extent possible. part, and shall retain a copy for its

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§ 203.6 12 CFR Ch. II (1–1–02 Edition)

records for a period of not less than cost incurred in providing or reproduc-
three years. ing the data.
(b) Public disclosure of statement. (1) A (e) Notice of availability. A financial
financial institution shall make its institution shall post a general notice
mortgage loan disclosure statement (to about the availability of its HMDA
be prepared by the Federal Financial data in the lobby of its home office and
Institutions Examination Council) of each branch office located in an
available to the public at its home of- MSA. It shall promptly upon request
fice no later than three business days provide the location of the institu-
after receiving it from the Examina- tion’s offices where the statement is
tion Council. available for inspection and copying, or
(2) In addition, a financial institution it may include the location in the no-
shall either: tice.
(i) Make its disclosure statement [58 FR 13405, Mar. 11, 1993, as amended at
available to the public (within ten Reg. C, 59 FR 63704, Dec. 9, 1994; 62 FR 28623,
business days of receiving it) in at May 27, 1997]
least one branch office in each addi-
§ 203.6 Enforcement.
tional MSA where the institution has
offices (the disclosure statement need (a) Administrative enforcement. A vio-
only contain data relating to the MSA lation of the act or this regulation is
where the branch is located); or subject to administrative sanctions as
(ii) Post the address for sending writ- provided in section 305 of the act, in-
ten requests for the disclosure state- cluding the imposition of civil money
ment in the lobby of each branch office penalties, where applicable. Compli-
in an MSA where the institution has ance is enforced by the agencies listed
offices, and mail or deliver a copy of in appendix A of this regulation.
the disclosure statement, within fif- (b) Bona fide errors. An error in com-
teen calendar days of receiving a writ- piling or recording loan data is not a
ten request (the disclosure statement violation of the act or this regulation
need only contain data relating to the if it was unintentional and occurred de-
spite the maintenance of procedures
MSA for which the request is made).
reasonably adapted to avoid such er-
Including the address in the general
rors.
notice required under paragraph (e) of
this section satisfies this requirement. [54 FR 51362, Dec. 15, 1989, as amended at 56
(c) Public disclosure of loan application FR 59857, Nov. 26, 1991]
register. A financial institution shall
APPENDIX A TO PART 203—FORM AND IN-
make its loan application register
STRUCTIONS FOR COMPLETION OF
available to the public after modifying
HMDA LOAN/APPLICATION REGISTER
it in accordance with appendix A. An
institution shall make its modified PAPERWORK REDUCTION ACT NOTICE
register available following the cal- This report is required by law (12 U.S.C.
endar year for which the data are com- 2801–2810 and 12 CFR part 203). An agency
piled, by March 31 for a request re- may not conduct or sponsor, and an organi-
ceived on or before March 1, and within zation is not required to respond to, a collec-
30 days for a request received after tion of information unless it displays a cur-
March 1. The modified register need rently valid OMB Control Number. The OMB
Control Numbers for this information collec-
only contain data relating to the MSA tion are 1557–0159, 3064–0046, 1550–0021, and
for which the request is made. 7100–0247 for institutions reporting data to
(d) Availability of data. A financial in- the Office of the Comptroller of the Cur-
stitution shall make its modified reg- rency, the Federal Deposit Insurance Cor-
ister available to the public for a pe- poration, the Office of Thrift Supervision,
riod of three years and its disclosure and the Federal Reserve System, respec-
statement available for a period of five tively; numbers for the National Credit
Union Administration and the Department
years. An institution shall make the
of Housing and Urban Development are pend-
data available for inspection and copy- ing. Send comments regarding this burden
ing during the hours the office is nor- estimate or any other aspect of this collec-
mally open to the public for business. tion of information, including suggestions
It may impose a reasonable fee for any for reducing the burden, to the respective

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Federal Reserve System Pt. 203, App. A
agencies and to the Office of Information and D. Other Lending Institutions—Exception
Regulatory Affairs, Office of Management
You need not complete a register—even if
and Budget, Washington, D.C. 20503. you meet the tests for location and asset size
I. WHO MUST FILE A REPORT or number of home purchase loans—if your
institution is a for-profit mortgage lender
A. Depository Institutions (other than a bank, savings association, or
credit union) and home purchase loans that
1. Subject to the exception discussed you originated in the preceding calendar
below, banks, savings associations, and cred- year (including refinancings) came to less
it unions must complete a register listing than 10 percent of your total loan origina-
data about loan applications received, loans tion volume, measured in dollars.
originated, and loans purchased if on the pre- E. If you are the subsidiary of a bank or
ceding December 31 an institution: savings association you must complete a sep-
a. Had assets of more than the asset arate register for your institution. You will
threshold for coverage as published by the submit the register, directly or through your
Board each year in December, and parent, to the agency that supervises your
b. Had a home or a branch office in a ‘‘met- parent. (See paragraph VI.)
ropolitan statistical area’’ or a ‘‘primary F. Institutions that are specifically ex-
metropolitan statistical area’’ (both are re- empted by the Federal Reserve Board from
ferred to in these instructions by the term complying with the federal Home Mortgage
Disclosure Act because they are covered by a
‘‘MSA’’).
similar state law on mortgage loan disclo-
2. The asset threshold was adjusted from sures must use the disclosure form required
$10 million to $28 million as of December 31, by their state law and submit the data to
1996. Any adjustment to the asset threshold their state supervisory agency.
for depository institutions will be published
by the Board in December in the staff com- II. REQUIRED FORMAT AND REPORTING
mentary. PROCEDURES
3. Example. If on December 31 you had a
A. Institutions must submit data to their
home or branch office in an MSA and your
supervisory agencies in an automated, ma-
assets exceeded the asset threshold, you
chine-readable form. The format must con-
must complete a register that lists the
form exactly to that of form FR HMDA-LAR,
home-purchase and home-improvement loans including the order of columns, column head-
that you originate or purchase (and also lists ings, etc. Contact your federal supervisory
applications that did not result in an origi- agency for information regarding procedures
nation) beginning January 1. and technical specifications for automated
data submission; in some cases, agencies also
B. Depository Institutions—Exception
make software for automated data submis-
You need not complete a register—even if sion available to institutions. The data must
you meet the tests for asset size and loca- be edited before submission, using the edits
tion—if your institution is a bank, savings included in the agency-supplied software or
association, or credit union that made no equivalent edits in software available from
first-lien home purchase loans (including vendors or developed in-house. (Institutions
refinancings) on one-to-four-family dwellings that report 25 or fewer entries on their
in the preceding calendar year. This excep- HMDA-LAR may collect and report the data
tion does not apply in the case of nondeposi- in paper form. An institution that submits
tory institutions. its register in nonautomated form must send
two copies that are typed or computer print-
C. Other Lending Institutions ed, and must use the format of form FR
HMDA-LAR (but need not use the form
Subject to the exception discussed below, itself). Each page must be numbered, and the
for-profit mortgage lending institutions total number of pages must be given (for ex-
(other than banks, savings associations, and ample, ‘‘Page 1 of 3’’).)
credit unions) must complete a register list- B. The required data are to be entered in
ing data about loan applications received, the register for each loan origination, each
loans originated, and loans purchased if the application acted on, and each loan pur-
institution had a home or branch office in an chased during the calendar year. Your insti-
MSA on the preceding December 31, and tution should decide on the procedure it
1. Had assets of more than $10 million wants to follow—for example, whether to
(based on the combined assets of the institu- begin entering the required data when an ap-
tion and any parent corporation) on the pre- plication is received, or to wait until final
ceding December 31, or action is taken (such as when a loan goes to
2. Originated 100 or more home purchase closing or an application is denied). Keep in
loans (including refinancings of such loans) mind that an application is to be reported in
during the preceding calendar year, regard- the calendar year when final action is taken.
less of asset size. Report loan originations in the year they go

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Pt. 203, App. A 12 CFR Ch. II (1–1–02 Edition)
to closing; if an application has been ap- other than a Saturday, Sunday, or legal pub-
proved but has not yet gone to closing at lic holiday. You also must either:
year-end, report it the following year. a. Make your disclosure statement avail-
C. Your institution may collect the data able to the public, within ten business days
on separate registers at different branches, of receiving it from the FFIEC, in at least
or on separate registers for different loan one branch office in each additional MSA
types (such as for home purchase or home where you have offices (the disclosure state-
improvement loans, or for loans on multi- ment need only contain data relating to
family dwellings). But make sure the appli- properties in the MSA where the branch of-
cation or loan numbers (discussed under fice is located); or
paragraph V.A.1., below) are unique. b. Post in the lobby of each branch office
D. Entries need not be grouped on your in an MSA the address where a written re-
register by MSA, or chronologically, or by quest for the disclosure statement may be
census tract numbers, or in any other par- sent, and mail or deliver a copy of the state-
ticular order.
ment to any person requesting it, within fif-
E. Applications and loans must be recorded
teen calendar days of receiving a written re-
on your register within thirty calendar days
quest. The disclosure statement need only
after the end of the calendar quarter in
contain data relating to the MSA for which
which final action (such as origination or
the request is made.
purchase of a loan, or denial or withdrawal
of an application) is taken. The type of pur- 2. You may make the disclosure statement
chaser for loans sold need not be included in available in paper form or, if the person re-
these quarterly updates. questing the data agrees, in automated form
(such as by PC diskette or computer tape).
III. SUBMISSION OF HMDA–LAR AND PUBLIC E. Availability of modified loan application
RELEASE OF DATA register.
A. You must submit the data for your in- 1. To protect the privacy of applicants and
stitution to the office specified by your su- borrowers, an institution must modify its
pervisory agency no later than March 1 fol- loan application register by removing the
lowing the calendar year for which the data following information before releasing it to
are compiled. A list of the agencies appears the public: the application or loan number,
at the end of these instructions. date application received, and date of action
B. You must submit all required data to taken.
your supervisory agency in one complete pack- 2. You may make the modified register
age, with the prescribed transmittal sheet. available in paper or automated form (such
An officer of your institution must certify to as by PC diskette or computer tape). Al-
the accuracy of the data. Any additional though you are not required to make the
data submissions that become necessary (for modified loan application register available
example, because you discover that data in census-tract order, you are strongly en-
were omitted from the initial submission, or couraged to do so in order to enhance its
because revisions are called for) also must be utility to users.
accompanied by a transmittal sheet. 3. You must make your modified register
C. The transmittal sheet must state the available following the calendar year for
total number of line entries contained in the which the data are complied, by March 31 for
accompanying data submission. If the data a request received on or before March 1, and
submission involves revisions or deletions of within 30 days for a request received after
previously submitted data, state the total of March 1. You are not required to prepare a
all line entries contained in that submission, modified loan application register in advance
including both those representing revisions of receiving a request from the public for
or deletions of previously submitted entries, this information, but must be able to re-
and those that are being resubmitted un- spond to a request within 30 days. A modified
changed or are being submitted for the first register need only reflect data relating to
time. If you are a depository institution, you the MSA for which the request is made.
also are asked to provide a list of the MSAs F. Posters.
where you have a home or branch office.
1.Suggested language. Some of the agencies
D. Availability of disclosure statement. 1. The
provide HMDA posters that you can use to
Federal Financial Institutions Examination
inform the public of the availability of your
Council (FFIEC) will prepare a disclosure
HMDA data, or you may create your own
statement from the data you submit. Your
posters. If you print your own, the following
disclosure statement will be returned to the
language is suggested but is not required:
name and address indicated on the trans-
mittal sheet. Within three business days of Home Mortgage Disclosure Act Notice
receiving the disclosure statement, you must
make a copy available at your home office The HMDA data about our residential
for inspection by the public. For these pur- mortgage lending are available for review.
poses a business day is any calendar day The data show geographic distribution of

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Federal Reserve System Pt. 203, App. A
loans and applications; race, gender, and in- upon during the calendar year covered by the
come of applicants and borrowers; and infor- current register.
mation about loan approvals and denials. In-
quire at this office regarding the locations B. Data To Be Excluded
where HMDA data may be inspected. Do not report loans or applications for
2. Additional language for institutions making loans of the following types:
the disclosure statement available upon request. 1. Loans that, although secured by real es-
For an institution that makes its disclosure tate, are made for purposes other than home
statement available upon request instead of purchase, home improvement, or refinancing
at branch offices must post a notice inform- (for example, do not report a loan secured by
ing the public of the address to which a re- residential real property for purposes of fi-
quest should be sent. For example, the insti- nancing college tuition, a vacation, or goods
tution could include the following sentence for business inventory).
in its general notice: ‘‘To receive a copy of 2. Loans made in a fiduciary capacity (for
these data send a written request to [ad- example, by your trust department).
dress].’’ 3. Loans on unimproved land.
4. Construction or bridge loans and other
IV. TYPES OF LOANS AND APPLICATIONS
temporary financing.
COVERED AND EXCLUDED BY HMDA
5. The purchase of an interest in a pool of
A. Types of Loans and Applications to be loans (such as mortgage-participation cer-
Reported tificates).
6. The purchase solely of the right to serv-
1. Report the data on home purchase and ice loans.
home improvement loans that you origi-
nated (that is, loans that were closed in your V. INSTRUCTIONS FOR COMPLETION OF LOAN/
name) and loans that you purchased during APPLICATION REGISTER
the calendar year covered by the report. Re-
port these data even if the loans were subse- A. Application or Loan Information
quently sold by your institution. Include 1. Application or Loan Number
refinancings of home purchase and home im-
provement loans. Enter an identifying number that can be
2. Report the data for applications for used later to retrieve the loan or application
home purchase and home improvement loans file. It can be any number of your choosing
that did not result in originations—for ex- (not exceeding 25 characters). You may use
ample, applications that your institution de- letters, numerals, or a combination of both.
nied or that the applicant withdrew during Make sure that all numbers are unique
the calendar year covered by the report. within your institution. If your register con-
3. In the case of brokered loan applications tains data for branch offices, for example,
or applications forwarded to you through a you could use a letter or a numerical code to
correspondent, report as originations loans identify the loans or applications of different
that you approved and subsequently acquired branches, or could assign a certain series of
according to a pre-closing arrangement numbers to particular branches to avoid du-
(whether or not they closed in your institu- plicate numbers. You are strongly encour-
tion’s name). Additionally, report the data aged not to use the applicant’s or borrower’s
for all applications that did not result in name or social security number, for privacy
originations—for example, applications that reasons.
your institution denied or that the applicant 2. Date application received. For paper sub-
withdrew during the calendar year covered missions only, enter the date the loan appli-
by the report (whether or not they would cation was received by your institution by
have closed in your institution’s name). For month, day, and year, using numerals in the
all of these loans and applications, report form MM/DD/CCYY (for example, 01/15/1999).
the race or national origin, sex, and income For institutions submitting data in elec-
information, unless your institution is a tronic form, the proper format is
bank, savings association, or credit union CCYYMMDD. If your institution normally
with assets of $30 million or less on the pre- records the date shown on the application
ceding December 31. form, you may use that date instead. Enter
4. Originations are to be reported only ‘‘NA’’ for loans purchased by your institu-
once. If you are the loan broker or cor- tion.
respondent, do not report as originations 3. Type. Indicate the type of loan or appli-
loans that you forwarded to another lender cation by entering the applicable code from
for approval prior to closing, and that were the following:
approved and subsequently acquired by that 1—Conventional (any loan other than FHA,
lender (whether or not they closed in your VA, FSA, or RHS loans)
name). 2—FHA-insured (Federal Housing Adminis-
5. Report applications that were received tration)
in the previous calendar year but were acted 3—VA-guaranteed (Veterans Administration)

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Pt. 203, App. A 12 CFR Ch. II (1–1–02 Edition)
4—FSA/RHS-guaranteed (Farm Service c. You may report all refinancings of loans
Agency or Rural Housing Service) secured by one- to four-family residential
dwellings, regardless of the purpose of or
4. Purpose amount outstanding on the original loan,
Indicate the purpose of the loan or applica- and regardless of the amount of new money
tion by entering the applicable code from the (if any) that is for home purchase or home
following: improvement purposes.
Code 4: Multifamily dwelling.
1—Home purchase (one-to-four family)
a. Use this code for loans and loan applica-
2—Home improvement (one-to-four family)
tions on dwellings for five or more families,
3—Refinancing (home purchase or home im-
including home purchase loans, refinancings,
provement, one-to-four family)
and loans for repairing, rehabilitation, and
4—Multifamily dwelling (home purchase,
remodeling purposes.
home improvement, and refinancings)
b. Do not use this code for loans on indi-
5. Explanation of Purpose Codes vidual condominium or cooperative units;
use codes 1, 2, or 3 for such loans, as applica-
Code 1: Home purchase. ble.
a. This code applies to loans and applica-
tions made for the purpose of purchasing a 6. Owner Occupancy
residential dwelling for one to four families,
Indicate whether the property to which the
if the loan is to be secured by the dwelling loan or loan application relates is to be
being purchased or by another dwelling. owner-occupied as a principal dwelling by
b. At your option, you may use code 1 for entering the applicable code from the fol-
loans that are made for home improvement lowing:
purposes but are secured by a first lien, if
you normally classify such first-lien loans as 1—Owner-occupied as a principal dwelling
home purchase loans. 2—Not owner-occupied
Code 2: Home improvement. 3—Not applicable
a. Code 2 applies to loans and applications 7. Explanation of Codes
for loans if (i) a portion of the proceeds is to
be used for repairing, rehabilitating, remod- a. Use code 2 for second homes or vacation
eling, or improving a one- to four-family res- homes, as well as rental properties.
idential dwelling, or the real property upon b. Use code 2 only for nonoccupant loans,
which it is located, and (ii) the loan is classi- or applications for nonoccupant loans, re-
fied as a home improvement loan. lated to one-to-four family dwellings (includ-
b. Report both secured and unsecured ing individual condominium or cooperative
loans. units).
c. At your option, you may report data c. Use code 3 if the property to which the
about home-equity lines of credit—even if loan relates is a multifamily dwelling; is not
the credit line is not classified as a home im- located in an MSA; or is located in an MSA
provement loan. If you choose to do so, you in which your institution has neither a home
may report a home-equity line of credit as a nor a branch office.
home improvement loan if some portion of d. For purchased loans, you may assume
the proceeds will be used for home improve- that the property will be owner-occupied as
ment. (See Paragraph 8. ‘‘Loan amount.’’) If a principal dwelling (code 1) unless the loan
you report originations of home-equity lines documents or application contain informa-
of credit, you must also report applications tion to the contrary.
for such loans that did not result in origina-
8. Loan Amount
tions.
Code 3: Refinancings. Enter the amount of the loan or applica-
a. Use this code for refinancings (and appli- tion. Do not report loans below $500. Show
cations for refinancings) of loans secured by the amount in thousands rounding to the
one- to four-family residential dwellings. A nearest thousand ($500 should be rounded up
refinancing involves the satisfaction of an to the next $1,000). For example, a loan for
existing obligation that is replaced by a new $167,300 should be entered as 167 and one for
obligation undertaken by the same borrower. $15,500 as 16.
But do not report a refinancing if, under the a. For home purchase loans that you origi-
loan agreement, you are unconditionally ob- nate, enter the principal amount of the loan
ligated to refinance the obligation, or you as the loan amount. For home purchase
are obligated to refinance the obligation sub- loans that you purchase, enter the unpaid
ject to conditions within the borrower’s con- principal balance of the loan at the time of
trol. purchase as the loan amount.
b. Use this code whether or not you were b. For home improvement loans (both
the original creditor on the loan being refi- originations and purchases), you may in-
nanced, and whether or not the refinancing clude unpaid finance charges in the loan
involves an increase in the outstanding prin- amount if that is how you record such loans
cipal. on your books. For a multiple purpose loan

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Federal Reserve System Pt. 203, App. A
classified by you as a home improvement e. Use code 5 if you sent a written notice of
loan because it involves a home improve- incompleteness under § 202.9(c)(2) of Regula-
ment purpose, enter the full amount of the tion B (Equal Credit Opportunity) and the
loan, not just the amount specified for home applicant failed to respond to your request
improvement. for additional information within the period
c. For home-equity lines of credit (if you of time specified in your notice.
have chosen to report them), enter as the
loan amount only that portion of the line 3. Date of Action
that is for home improvement purposes. Re- For paper submissions only, enter the date
port the loan amount for applications that by month, day, and year, using numerals in
did not result in originations in the same the form MM/DD/CCYY (for example, 02/22/
manner. Report only in the year the line is 1999). For institutions submitting data in
established. electronic form, the proper format is
d. For refinancings of dwelling-secured CCYYMMDD.
loans, indicate the total amount of the refi- a. For loans originated, enter the settle-
nancing, including the amount outstanding ment or closing date. For loans purchased,
on the original loan and the amount of new enter the date of purchase by your institu-
money (if any). tion.
e. For a loan application that was denied b. For applications denied, applications ap-
or withdrawn, enter the amount applied for. proved but not accepted by the applicant,
f. If you make a counteroffer for an and files closed for incompleteness, enter the
amount different from the amount initially date that the action was taken by your insti-
applied for, and the counteroffer is accepted tution or the date the notice was sent to the
by the applicant, report it as an origination applicant.
for the amount of the loan actually granted. c. For applications withdrawn, enter the
If the applicant turns down the counteroffer date you received the applicant’s express
or fails to respond, report it as a denial for withdrawal; or you may enter the date
the amount initially requested. shown on the notification from the appli-
cant, in the case of a written withdrawal.
B. Action Taken
C. Property Location
1. Type of action. Indicate the type of ac-
tion taken on the application or loan by In these columns enter the applicable
using one of the following codes. Do not re- codes for the MSA, state, county, and census
tract for the property to which a loan re-
port any loan application still pending at the
lates. For home purchase loans secured by
end of the calendar year; you will report that
one dwelling, but made for the purpose of
application on your register for the year in
purchasing another dwelling, report the
which final action is taken.
property location for the property in which
1—Loan originated the security interest is to be taken. If the
2—Application approved but not accepted home purchase loan is secured by more than
3—Application denied one property, report the location data for
4—Application withdrawn the property being purchased. (See para-
5—File closed for incompleteness graphs 5., 6., and 7. of paragraph V.C. of this
6—Loan purchased by your institution appendix for treatment of loans on property
outside the MSAs in which you have offices.)
2. Explanation of Codes
1. MSA
a. Use code 1 for a loan that is originated,
including one resulting from a counteroffer For each loan or loan application, indicate
(your offer to the applicant to make the loan the location of the property by the MSA
on different terms or in a different amount number. Enter only the MSA number, not
than initially applied for) that the applicant the MSA name. MSA boundaries are defined
accepts. by the U.S. Office of Management and Budg-
b. Use code 2 when an application is ap- et; use the boundaries that were in effect on
proved but the applicant (or a loan broker or January 1 of the calendar year for which you
correspondent) fails to respond to your noti- are reporting. A listing of MSAs is available
fication of approval or your commitment let- from your regional supervisory agency or the
ter within the specified time. FFIEC. (In these instructions, the term MSA
c. Use code 3 when an application is denied. refers to both metropolitan statistical area
This includes the situation when an appli- and primary metropolitan statistical area.)
cant turns down or fails to respond to your
2. State and County
counteroffer. Do not report as a withdrawn
application or as an application that was ap- You must use the Federal Information
proved but not accepted. Processing Standard (FIPS) two-digit nu-
d. Use code 4 only when an application is merical code for the state and the three-digit
expressly withdrawn by the applicant before numerical code for the county. These codes
a credit decision was made. are available from your regional supervisory

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Pt. 203, App. A 12 CFR Ch. II (1–1–02 Edition)
agency or the FFIEC. Do not use the letter the geographic information routinely for any
abbreviations used by the U.S. Postal Serv- property located within any MSA.
ice.
7. Data Reporting Under CRA for Banks and
3. Census Tract Savings Associations With Total Assets of $250
Indicate the census tract where the prop- Million or More and Banks and Savings Asso-
erty is located. ciations That Are Subsidiaries of a Holding
a. Enter the code ‘‘NA’’ if the property is Company Whose Total Banking and Thrift
located in an area not divided into census Assets Are $1 Billion or More
tracts on the U.S. Census Bureau’s census-
tract outline maps (see paragraph 4. below). If you are a bank or savings association
b. If the property is located in a county with total assets of $250 million or more as of
with a population of 30,000 or less in the 1990 December 31 for each of the immediately pre-
census (as determined by the Census Bu- ceding two years, you must also enter the lo-
reau’s 1990 CPH–2 population series), enter cation of property located outside the MSAs
‘‘NA’’ (even if the population has increased in which you have a home or branch office,
above 30,000 since 1990), or you may enter the or outside any MSA. You must also enter
census tract number. this information if you are a bank or savings
association that is a subsidiary of a holding
4. Census Tract Number company with total banking and thrift as-
For the census tract number, consult the sets of $1 billion or more as of December 31
U.S. Census Bureau’s Census Tract/Street for each of the immediately preceding two
Index for 1990, and for addresses not listed in years.
the index, consult the Census Bureau’s cen-
sus tract outline maps. You must use the D. Applicant Information— Race or National
maps from the Census Bureau’s 1990 CPH–3 Origin, Sex, and Income
series, or equivalent 1990 census data from Appendix B of Regulation C contains in-
the Census Bureau (such as the Census structions for the collection of data on race
TIGER/Line File) or from a private pub- or national origin and sex, and also contains
lisher.
a sample form for data collection. The form
5. Outside-MSA is substantially similar to the form pre-
scribed by § 202.13 of Regulation B (Equal
For loans on property located outside the Credit Opportunity) and contained in appen-
MSAs in which you have a home or branch dix B to that regulation. You may use either
office (or outside any MSA), you have two form.
options. Under option 1, you may enter the
MSA, state, and county codes and the census 1. Applicability
tract number. You may enter ‘‘NA’’ in the
MSA or census tract column if no code or You must report this applicant informa-
number exists for the property. (Codes exist tion for loans that you originate as well as
for all states and counties.) If you choose op- for applications that do not result in an
tion 1, the codes and tract number must ac- origination.
curately identify the location for the prop- a. You need not collect or report this infor-
erty in question. Under option 2, you may mation for loans purchased. If you choose
enter ‘‘NA’’ in all four columns, whether or not to, enter the codes specified in para-
not the codes or number exist for the prop- graphs 3., 4., and 5. below for ‘‘not applica-
erty. ble.’’
6. Nondepository Lenders b. If your institution is a bank, savings as-
sociation, or credit union that had assets of
If you are a for-profit mortgage lending in- $30 million or less on the preceding Decem-
stitution (other than a bank, savings asso- ber 31, you may—but need not—collect and
ciation, or credit union), and in the pre- report these data. If you choose not to, enter
ceding calendar year you received applica- the codes specified in paragraphs 3., 4., and 5.
tions for, or originated or purchased, loans below for ‘‘not applicable.’’
for home purchase or home improvement c. If the borrower or applicant is not a nat-
adding up to a total of five or more for a ural person (a corporation or partnership, for
given MSA, you are deemed to have a branch example), use the codes specified in para-
office in that MSA, whether or not you have
graphs 3., 4., and 5. below for ‘‘not applica-
a physical office there. As a result, you will
ble.’’
have to enter the MSA, state, county, and
census tract numbers for any transactions in 2. Mail and Telephone Applications
that MSA. Because you must keep accurate
records about lending within MSAs in the Any loan applications mailed to applicants
current calendar year in order to report data must contain a collection form similar to
accurately the following year, to comply that shown in appendix B, and you must
with this rule you may find it easier to enter record on your register the data on race or

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Federal Reserve System Pt. 203, App. A
national origin and sex if the applicant pro- nated or purchased was then sold to a sec-
vides it. If the applicant chooses not to pro- ondary market entity within the same cal-
vide the data, enter the code for ‘‘informa- endar year:
tion not provided by applicant in mail or 0—Loan was not originated or was not sold
telephone application’’ specified in para- in calendar year covered by register
graphs 3. and 4. below. If an application is 1—FNMA (Federal National Mortgage Asso-
taken entirely by telephone, you need not re- ciation)
quest this information. (See appendix B for 2—GNMA (Government National Mortgage
complete information on the collection of Association)
this data in mail or telephone applications.) 3—FHLMC (Federal Home Loan Mortgage
Corporation)
3. Race or National Origin of Borrower or 4—FAMC (Federal Agricultural Mortgage
Applicant Corporation)
Use the following codes to indicate the 5—Commercial bank
race or national origin of the applicant or 6—Savings bank or savings association
borrower under column ‘‘A’’ and of any co- 7—Life insurance company
applicant or co-borrower under column 8—Affiliate institution
‘‘CA.’’ If there is more than one co-applicant, 9—Other type of purchaser
provide this information only for the first 2. Explanation of codes. a. Enter the code 0
co-applicant listed on the application form. for applications that were denied, with-
If there are no co-applicants or co-borrowers, drawn, or approved but not accepted by the
enter code 8 for ‘‘not applicable’’ in the co- applicant; and for files closed for incomplete-
applicant column. ness.
1—American Indian or Alaskan Native b. If you originated or purchased a loan
2—Asian or Pacific Islander and did not sell it during that same calendar
3—Black year, enter the code 0. If you sell the loan in
4—Hispanic a succeeding year, you need not report the
5—White sale.
6—Other c. If you conditionally assign a loan to
7—Information not provided by applicant in GNMA in connection with a mortgage-
mail or telephone application backed security transaction, use code 2.
8—Not applicable d. Loans ‘‘swapped’’ for mortgage-backed
securities are to be treated as sales; enter
4. Sex of Borrower or Applicant the type of entity receiving the loans that
are swapped as the purchaser.
Use the following codes to indicate the sex e. Use code 8 for loans sold to an institu-
of the applicant or borrower under column tion affiliated with you, such as your sub-
‘‘A’’ and of any co-applicant or co-borrower sidiary or a subsidiary of your parent cor-
under column ‘‘CA.’’ If there is more than poration.
one co-applicant, provide this information
only for the first co-applicant listed on the F. Reasons for Denial
application form. If there are no co-appli-
1. You are not required to enter the rea-
cants or co-borrowers, enter code 4 for ‘‘not
sons for the denial of an application. But if
applicable.’’
you choose to do so, you may indicate up to
1—Male three reasons by using the following codes:
2—Female
1—Debt-to-income ratio
3—Information not provided by applicant in
2—Employment history
mail or telephone application
3—Credit history
4—Not applicable 4—Collateral
5. Income 5—Insufficient cash (downpayment, closing
costs)
Enter the gross annual income that your 6—Unverifiable information
institution relied upon in making the credit 7—Credit application incomplete
decision. 8—Mortgage insurance denied
a. Round all dollar amounts to the nearest 9—Other
thousand (round $500 up to the next $1,000), 2. Leave this column blank if the ‘‘action
and show in terms of thousands. For exam- taken’’ on the application is not a denial.
ple, $35,500 should be reported as 36. For example, do not complete this column if
b. For loans on multifamily dwellings, the application was withdrawn or the file
enter ‘‘NA.’’ was closed for incompleteness.
c. If no income information is asked for or 3. If your institution uses the model form
relied on in the credit decision, enter ‘‘NA.’’ for adverse action contained in the appendix
to Regulation B (Form C–1 in appendix C,
E. Type of Purchaser
Sample Notification Form, which offers
1. Enter the applicable code to indicate some 20 reasons for denial), the following list
whether a loan that your institution origi- shows which codes to enter.

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Pt. 203, App. A 12 CFR Ch. II (1–1–02 Edition)
a. Code 1 corresponds to: Income insufficient B. State Member Banks of the Federal Reserve
for amount of credit requested, and Exces- System, Their Subsidiaries, Subsidiaries of
sive obligations in relation to income. Bank Holding Companies, Branches and
b. Code 2 corresponds to: Temporary or ir- Agencies of Foreign Banks (other than federal
regular employment, and Length of employ- branches, federal agencies, and insured state
ment. branches of foreign banks), Commercial Lend-
c. Code 3 corresponds to: Insufficient num- ing Companies Owned or Controlled by For-
eign Banks, and Organizations Operating
ber of credit references provided; Unaccept-
Under Section 25 or 25A of the Federal Re-
able type of credit references provided; No
serve Act.
credit file; Limited credit experience; Poor
credit performance with us; Delinquent past Federal Reserve Bank serving the district
or present credit obligations with others; in which the state member bank is located;
Garnishment, attachment, foreclosure, re- for institutions other than state member
possession, collection action, or judgment; banks, the Federal Reserve Bank specified by
and Bankruptcy. the Board of Governors.
d. Code 4 corresponds to: Value or type of C. Nonmember Insured Banks (except for federal
collateral not sufficient. savings banks) and Their Subsidiaries and In-
e. Code 6 corresponds to: Unable to verify sured State Branches of Foreign Banks.
credit references, Unable to verify employ-
ment, Unable to verify income, and Unable Regional Director of the Federal Deposit
Insurance Corporation for the region in
to verify residence.
which the institution is located.
f. Code 7 corresponds to: Credit application
incomplete. D. Savings Institutions Insured Under the Sav-
g. Code 9 corresponds to: Length of resi- ings Association Insurance Fund of the FDIC,
dence, Temporary residence, and Other rea- Federally-Chartered Savings Banks Insured
sons specified on notice. Under the Bank Insurance Fund of the FDIC
(But Not Including State-Chartered Savings
VI. Federal Supervisory Agencies Banks Insured Under the Bank Insurance
Fund), Their Subsidiaries, and Subsidiaries of
Send your loan/application register and di-
Savings Institution Holding Companies
rect any questions to the office of your fed-
eral supervisory agency as specified below. If Regional or other office specified by the
you are the nondepository subsidiary of a Office of Thrift Supervision.
bank, savings association, or credit union,
E. Credit Unions
send the register to the supervisory agency
for your parent institution. Terms that are National Credit Union Administration, Of-
not defined in the Federal Deposit Insurance fice of Examination and Insurance, 1776 G
Act (12 U.S.C. 1813(s)) shall have the meaning Street, NW., Washington, DC 20456.
given to them in the International Banking
F. Other Depository Institutions
Act of 1978 (12 U.S.C. 3101).
Regional Director of the Federal Deposit
A. National Banks and Their Subsidiaries and Insurance Corporation for the region in
Federal Branches and Federal Agencies of which the institution is located.
Foreign Banks.
G. Other Mortgage Lending Institutions
District office of the Office of the Comp-
troller of the Currency for the district in Assistant Secretary for Housing, HMDA
which the institution is located. Reporting—Room 9233, U.S. Department of
Housing and Urban Development, 451 7th
Street, SW., Washington, DC 20410.

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Pt. 203, App. A 12 CFR Ch. II (1–1–02 Edition)

LOAN/APPLICATION REGISTER CODE SHEET to the HMDA–LAR explain the proper use of
each code.
Use the following codes to complete the
Loan/Application Register. The instructions

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Federal Reserve System Pt. 203, App. B
APPLICATION OR LOAN INFORMATION 7—Information not provided by applicant
in mail or telephone application
Type:
8—Not applicable
1—Conventional (any loan other than FHA,
VA, FSA, or RHS loans) Sex:
2—FHA-insured (Federal Housing Adminis- 1—Male
tration) 2—Female
3—VA-guaranteed (Veterans Administra- 3—Information not provided by applicant
tion) in mail or telephone application
4—FSA/RHS-guaranteed (Farm Service 4—Not applicable
Agency or Rural Housing Service)
Purpose: TYPE OF PURCHASER
1—Home purchase (one-to-four family) 0—Loan was not originated or was not sold
2—Home improvement (one-to-four family) in calendar year covered by register
3—Refinancing (home purchase or home 1—FNMA (Federal National Mortgage Asso-
improvement, one-to-four family) ciation)
4—Multifamily dwelling (home purchase, 2—GNMA (Government National Mortgage
home improvement, and refinancings) Association)
Owner-Occupancy: 3—FHLMC (Federal Home Loan Mortgage
1—Owner-occupied as a principal dwelling Corporation)
2—Not owner-occupied 4—FAMC (Federal Agricultural Mortgage
3—Not applicable Corporation)
Action Taken: 5—Commercial bank
1—Loan originated 6—Savings bank or savings association
2—Application approved but not accepted 7—Life insurance company
3—Application denied by financial institu- 8—Affiliate institution
tion 9—Other type of purchaser
4—Application withdrawn by applicant
5—File closed for incompleteness REASONS FOR DENIAL (OPTIONAL)
6—Loan purchased by your institution 1—Debt-to-income ratio
2—Employment history
APPLICANT INFORMATION 3—Credit history
Race or National Origin: 4—Collateral
1—American Indian or Alaskan Native 5—Insufficient cash (downpayment, closing
2—Asian or Pacific Islander costs)
3—Black 6—Unverifiable information
4—Hispanic 7—Credit application incomplete
5—White 8—Mortgage insurance denied
6—Other 9—Other

[Reg. C, 56 FR 59857, Nov. 26, 1991, as amended at 57 FR 20400, May 13, 1992; 57 FR 56965, 56967,
Dec. 2, 1992; 58 FR 13405, Mar. 11, 1993; 59 FR 63704, Dec. 9, 1994; 60 FR 22225, May 4, 1995; 62
FR 28623, 28624, May 27, 1997; 62 FR 33340, June 19, 1997; 63 FR 52143-52146, Sept. 30, 1998]

APPENDIX B TO PART 203—FORM AND IN- 2. If the applicant chooses not to provide
STRUCTIONS FOR DATA COLLECTION the information for an application taken in
ON RACE OR NATIONAL ORIGIN AND person, note this fact on the form and note
the data, to the extent possible, on the basis
SEX
of visual observation or surname.
I. Instructions on collection of data on race or 3. Inform the applicant that the Federal
national origin and sex. government is requesting this information in
order to monitor compliance with Federal
A. Format. statutes that prohibit lenders from discrimi-
nating against applicants on these bases. In-
You may list questions regarding the race form the applicant that if the information is
or national origin and sex of the applicant on not provided where the application is taken
your loan application form, or on a separate in person, you are required to note the data
form that refers to the application. (See the on the basis of visual observation or sur-
sample form below for recommended lan- name.
guage.) 4. If an application is made entirely by
telephone, you need not request this infor-
B. Procedures.
mation. And you need not provide the data
1. You must ask for this information, but when you take an application by mail, if the
cannot require the applicant to provide it. applicant fails to answer these questions on

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Pt. 203, Supp. I 12 CFR Ch. II (1–1–02 Edition)
the application form. You should indicate other appropriate category for race or na-
whether an application was received by mail tional origin. If completing the form based
or telephone, if it is not otherwise evident on on visual observation, do not use this cat-
the face of the application. egory; use one of the other five categories.
5. The ‘‘other’’ block is available only to
the applicant who chooses to indicate some

SUPPLEMENT I TO PART 203—STAFF collection requirements. (Appendix A of this
COMMENTARY part, I., IV., and V.)
2. Meaning of refinancing. A refinancing of
Introduction a loan is the satisfaction and replacement of
1. Status and citations. The commentary in an existing obligation by a new obligation by
this supplement is the vehicle by which the the same borrower. The term ‘‘refinancing’’
Division of Consumer and Community Af- refers to the new obligation. If the existing
fairs of the Federal Reserve Board issues for- obligation is not satisfied and replaced, but
mal staff interpretations of Regulation C (12 is only renewed, modified, extended, or con-
CFR part 203). The parenthetical citations solidated (as in certain modification, exten-
given are references to Appendix A to Regu- sion, and consolidation agreements), the
lation C, Form and Instructions for Comple- transaction is not a refinancing for purposes
tion of the HMDA Loan/Application Reg- of HMDA. (Appendix A of this part, Para-
ister. graph V.A.5. Code 3.)
3. Refinancing— coverage. The regulation
Section 203.1—Authority, Purpose, and Scope bases coverage, in part, on whether an insti-
1(c) Scope. tution originates home purchase loans. For
1. General. The comments in this section determining whether an institution is sub-
address issues affecting coverage of institu- ject to Regulation C or is exempt from cov-
tions, exemptions from coverage, and data erage, an origination of a home-purchase

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Federal Reserve System Pt. 203, Supp. I
loan includes the refinancing of a home-pur- pendix A of this part, Paragraphs IV.A. and
chase loan. An institution may always deter- V.B.)
mine the actual purpose of the existing obli- 6. Illustrations of the broker rule. Assume
gation (for example, by reference to avail- that, prior to closing, four investors receive
able documents). (Appendix A of this part, the same application from a broker; two
Paragraphs I.B., I.C., and I.D.) Alternatively, deny it, one approves it, and one approves it
an institution may: and acquires the loan. In these cir-
i. Rely on the statement of the applicant cumstances, the first two report denials, the
that the existing obligation was (or was not) third reports the transaction as approved but
a home-purchase loan; or not accepted, and the fourth reports an origi-
ii. Assume that the new obligation is not a nation (whether the loan closes in the name
refinancing of a home-purchase loan if either of the broker or the investor). Alternatively,
the existing obligation or the new obligation assume that the broker denies a loan before
is not secured by a first lien on the dwelling. sending it to an investor; in this situation,
4. Refinancing— data collection. The regula- the broker reports a denial. (Appendix A of
tion requires collection and reporting of data this part, Paragraphs IV.A. and V.B.)
on refinancings of home-purchase and home- 7. Broker’s use of investor’s underwriting cri-
improvement loans. An institution may al- teria. If a broker makes a credit decision
ways determine the actual purpose of the ex- based on underwriting criteria set by an in-
isting obligation (for example, by reference vestor, but without the investor’s review
prior to closing, the broker has made the
to available documents). (Appendix A of this
credit decision. The broker reports as an
part, Paragraph V.A.5. Code 3.) Alter-
origination a loan that it approves and
natively, an institution may:
closes, and reports as a denial an application
i. Rely on the statement of the applicant
that it turns down (either because the appli-
that the existing obligation was (or was not)
cation does not meet the investor’s under-
a home-purchase or home-improvement loan; writing guidelines or for some other reason).
or The investor reports as purchases only those
ii. Assume that the new obligation is a re- loans it purchases. (Appendix A of this part,
financing of a home-purchase or home-im- Paragraphs IV.A. and V.B.)
provement loan only if the existing obliga- 8. Insurance and other criteria. If an institu-
tion was secured by a lien on a dwelling; or tion evaluates an application based on the
iii. Assume that the new obligation is a re- criteria or actions of a third party other
financing of a home-purchase or home-im- than an investor (such as a government or
provement loan only if the new obligation private insurer or guarantor), the institution
will be secured by a lien on a dwelling. must report the action taken on the applica-
5. The broker rule and the meaning of tion (loan originated, approved but not ac-
‘‘broker’’ and ‘‘investor.’’ For the purposes of cepted, or denied, for example). (Appendix A
the guidance given in this commentary, an of this part, Paragraphs IV.A. and V.B.)
institution that takes and processes a loan 9. Credit decision of agent is decision of prin-
application and arranges for another institu- cipal. If an institution approves loans
tion to acquire the loan at or after closing is through the actions of an agent, the institu-
acting as a ‘‘broker,’’ and an institution that tion must report the action taken on the ap-
acquires a loan from a broker at or after plication (loan originated, approved but not
closing is acting as an ‘‘investor.’’ (The accepted, or denied, for example). State law
terms used in this commentary may have determines whether one party is the agent of
different meanings in certain parts of the another. (Appendix A of this part, Para-
mortgage lending industry and other terms graphs IV.A. and V.B.)
may be used in place of these terms, for ex- 10. Affiliate bank underwriting (250.250 re-
ample in the Federal Housing Administra- view). If an institution makes an independent
tion mortgage insurance programs.) Depend- evaluation of the creditworthiness of an ap-
ing on the facts, a broker may or may not plicant (for example, as part of a pre-closing
make a credit decision on an application review by an affiliate bank under 12 CFR
(and thus it may or may not have reporting 250.250, which interprets section 23A of the
responsibilities). If the broker makes a cred- Federal Reserve Act), the institution is mak-
it decision, it reports that decision; if it does ing a credit decision. If the institution then
not make a credit decision, it does not re- acquires the loan, it reports the loan as an
port. If an investor reviews an application origination whether the loan closes in the
and makes a credit decision prior to closing, name of the institution or its affiliate. An
the investor reports that decision. If the in- institution that does not acquire the loan
vestor does not review the application prior but takes another action reports that action.
to closing, it reports only the loans that it (Appendix A of this part, Paragraphs IV.A.
purchases; it does not report the loans it and V.B.)
does not purchase. Thus, an institution that 11. Participation loan. An institution that
makes a credit decision on an application originates a loan and then sells partial inter-
prior to closing reports that decision regard- ests to other institutions reports the loan as
less of whose name the loan closes in. (Ap- an origination. An institution that acquires

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Pt. 203, Supp. I 12 CFR Ch. II (1–1–02 Edition)
only a partial interest in such a loan does outside those MSAs in which the institution
not report the transaction even if it has par- has a home or branch office.)
ticipated in the underwriting and origination 3. Nondepository institution. A branch of a
of the loan. (Appendix A of this part, Para- nondepository institution does not include
graphs I., II., IV., and V.) the office of an affiliate or other third party
12. Assumptions. An assumption occurs such as a loan broker. (Appendix A of this
when an institution enters into a written part, Paragraphs I., V.A.7., and V.C.) (But see
agreement accepting a new borrower as the Appendix A of this part, Paragraph V.C.6.,
obligor on an existing obligation. An institu- which requires certain nondepository insti-
tion reports as a home-purchase loan an as- tutions to report property location even in
sumption (or an application for an assump- MSAs where they do not have a physical lo-
tion) in the amount of the outstanding prin- cation.)
cipal. If a transaction does not involve a 2(d) Dwelling.
written agreement between a new borrower 1. Scope. The definition of ‘‘dwelling’’ is not
and the institution, it is not an assumption limited to the principal or other residence of
for HMDA purposes and is not reported. (Ap- the applicant or borrower, and thus includes
pendix A of this part, Paragraphs IV.A. and vacation or second homes and rental prop-
V.B.) erties. A dwelling also includes a mobile or
Section 203.2—Definitions manufactured home, a multifamily structure
(such as an apartment building), and a con-
2(b) Application. dominium or a cooperative unit. Rec-
1. Consistency with Regulation B. Board in- reational vehicles such as boats or campers
terpretations that appear in the official staff are not dwellings for purposes of HMDA. (Ap-
commentary to Regulation B (Equal Credit pendix A of this part, Paragraphs I.B., IV.,
Opportunity, 12 CFR Part 202, Supplement I) and V.A.5.)
are generally applicable to the definition of 2(e) Financial institution.
an application under Regulation C. However, 1. Branches of foreign banks— treated as a
under Regulation C the definition of an ap- bank. A federal branch or a state-licensed in-
plication does not include prequalification sured branch of a foreign bank is a ‘‘bank’’
requests. (Appendix A of this part, Para- under section 3(a)(1) of the Federal Deposit
graph IV.A.) Insurance Act (12 U.S.C. 1813(a)), and is cov-
2. Prequalification. A prequalification re- ered by HMDA if it meets the tests for a de-
quest is a request by a prospective loan ap- pository institution found in §§ 203.2(e)(1) and
plicant for a preliminary determination on 203.3(a)(1) of Regulation C. (Appendix A of
whether the prospective applicant would this part, Paragraphs I.A. and I.B.)
likely qualify for credit under an institu-
2. Branches and offices of foreign banks—
tion’s standards, or on the amount of credit
treated as a for-profit mortgage lending institu-
for which the prospective applicant would
tion. Federal agencies, state-licensed agen-
likely qualify. Some institutions evaluate
cies, state-licensed uninsured branches of
prequalification requests through a proce-
foreign banks, commercial lending compa-
dure that is separate from the institution’s
nies owned or controlled by foreign banks,
normal loan application process; others use
and entities operating under section 25 or
the same process. In either case, Regulation
C does not require an institution to report 25(a) of the Federal Reserve Act, 12 U.S.C. 601
prequalification requests on the HMDA– and 611 (Edge Act and Agreement corpora-
LAR, even though these requests may con- tions) are not ‘‘banks’’ under the Federal De-
stitute applications under Regulation B. (Ap- posit Insurance Act. These entities are none-
pendix A of this part, Paragraphs I. and theless covered by HMDA if they meet the
IV.A.) tests for a nondepository mortgage lending
2(c) Branch office. institution found in §§ 203.2(e)(2) and
1. Credit union. For purposes of Regulation 203.3(a)(2) of Regulation C. (Appendix A of
C, a ‘‘branch’’ of a credit union is any office this part, Paragraphs I.C. and I.D.)
where member accounts are established or 2(f) Home-improvement loan.
loans are made, whether or not the office has 1. Definition. A home-improvement loan is
been approved as a branch by a federal or a loan that is made for the purpose of home
state agency. (See 12 U.S.C. 1752.) (Appendix improvement and that is classified by the in-
A of this part, Paragraphs I., V.A.7., and stitution as a home-improvement loan. (Ap-
V.C.) pendix A of this part, Paragraphs IV. and
2. Depository institution. A branch of a de- V.A.5. Code 2.)
pository institution does not include a loan 2. Statement of the applicant. An institution
production office, the office of an affiliate, or may rely on the oral or written statement of
the office of a third party such as a loan an applicant regarding the proposed use of
broker. (Appendix A of this part, Paragraphs loan proceeds. (Appendix A of this part,
I., V.A.7., and V.C.) (But see Appendix A of Paragraphs IV. and V.A.5. Code 2.c.)
this part, Paragraph V.C.7., which requires 3. Home-equity lines. An institution that has
certain depository institutions to report chosen to report home-equity lines of credit
property location even for properties located reports as a home-improvement loan only

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Federal Reserve System Pt. 203, Supp. I
the part of a home-equity line that is in- 1. Multiple properties. A home-purchase loan
tended for home improvement. An institu- includes a loan secured by one dwelling and
tion that reports home-equity lines reports used to purchase another dwelling. (Appen-
the disposition of all applications, not just dix A of this part, Paragraphs IV. and V.A.5.
originations. (Appendix A of this part, Para- Code 1.)
graphs IV. and V.A.5. Code 2.c.) 2. Mixed-use property. A loan to purchase
4. Classification requirement. An institution property used primarily for residential pur-
has ‘‘classified’’ a loan as a home-improve- poses (for example, an apartment building
ment loan if it has entered the loan on its containing a convenience store) is a home-
books as a home-improvement loan, or has purchase loan. An institution may use any
otherwise coded or identified the loan as a reasonable standard to determine the pri-
home-improvement loan. For example, an in- mary use of the property, such as by square
stitution that has booked a loan or reported footage or by the income generated. An in-
it on a ‘‘call report’’ as a home-improvement stitution may select the standard to apply
loan has classified it as a home-improvement
on a case-by-case basis. (Appendix A of this
loan. An institution may also classify loans
part, Paragraphs IV.A., IV.B.1., and V.A.5.
as home-improvement loans in other ways
Code 1.)
(for example, by color-coding loan files). (Ap-
pendix A of this part, Paragraphs IV. and 3. Farm loan. A loan to purchase property
V.A.5. Code 2.) used primarily for agricultural purposes is
5. Improvements to real property. Home im- not a home-purchase loan even if the prop-
provements include improvements both to a erty includes a dwelling. An institution may
dwelling and to the real property on which use any reasonable standard to determine
the dwelling is located (for example, instal- the primary use of the property, such as by
lation of a swimming pool, construction of a reference to the exemption from Regulation
garage, or landscaping). (Appendix A of this X (Real Estate Settlement Procedures, 24
part, Paragraphs IV. and V.A.5. Code 2.) CFR 3500.5(b)(1)) for a loan on property of 25
6. Commercial and other loans. A loan for im- acres or more. An institution may select the
provement purposes originated outside an in- standard to apply on a case-by-case basis.
stitution’s consumer lending division (such (Appendix A of this part, Paragraphs IV.B.1.
as a loan to improve an apartment building and V.A.5. Code 1.)
made through the commercial loan depart- 4. Commercial and other loans. A home-pur-
ment) is reported if the institution classifies chase loan includes a loan originated outside
it as a home-improvement loan. (Appendix A an institution’s residential mortgage lending
of this part, Paragraphs IV. and V.A.5. Code division (such as a loan for the purchase of
1.) an apartment building made through the
7. Multiple-purpose loan. A loan for home commercial loan department). For home-
improvement and for other purposes is treat- purchase loans, there is no classification
ed as a home-improvement loan even if less test. (Appendix A of this part, Paragraphs
than 50 percent of the total loan proceeds are IV. and V.A.5. Code 1.)
to be used for improvement, provided the in- 5. Construction and permanent financing. A
stitution classifies the loan as a home-im- home-purchase loan includes both a com-
provement loan. (Appendix A of this part, bined construction/permanent loan and the
Paragraphs IV. and V.A.5. Code 2.) (But see permanent financing that replaces a con-
comment (2)(f)–3 of this supplement on struction-only loan. It does not include a
home-equity lines of credit.) construction-only loan, which is considered
8. Mixed-use property. A loan to improve ‘‘temporary financing’’ under Regulation C
property used for residential and commercial and is not reported. (Appendix A of this part,
purposes (for example, a building containing Paragraphs IV.A. and B.2, and V.A.5. Code 1.)
apartment units and retail space) satisfies 6. Home-equity line. An institution that has
the purpose requirement if the loan proceeds chosen to report home-equity lines of credit
are primarily to improve the residential por- reports as a home-purchase loan only the
tion of the property. If the loan proceeds are part that is intended for home purchase. An
to improve the entire property (for example, institution may rely on the applicant’s oral
to replace the heating system), the loan sat- or written statement about the proposed use
isfies the purpose requirement if the prop- of the funds. An institution that reports
erty itself is primarily residential. An insti- home-equity lines reports the disposition of
tution may use any reasonable standard to all applications, not just the originations.
determine the primary use of the property, (Appendix A of this part, Paragraphs IV. and
such as by square footage or by the income V.A.5. Code 1.)
generated. An institution may select the
standard to apply on a case-by-case basis. To Section 203.3—Exempt Institutions
report the loan as a home-improvement loan,
the institution must also classify it as such. 3(a) Exemption based on location, asset size,
(Appendix A of this part, Paragraphs IV. and or number of home-purchase loans.
V.A.5. Code 2.) 1. General. An institution that ceases to
2(g) Home-purchase loan. meet the tests for HMDA coverage (such as

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Pt. 203, Supp. I 12 CFR Ch. II (1–1–02 Edition)
the 10 percent test for nondepository institu- accurately within 30 days after the end of
tions) or becomes exempt may stop col- each calendar quarter. If some data are inac-
lecting HMDA data beginning with the next curate or incomplete despite this good-faith
calendar year. For example, a bank whose effort, the error or omission is not a viola-
assets are at or below the threshold on De- tion of Regulation C provided that the insti-
cember 31 of a given year reports data for tution corrects and completes the informa-
that full calendar year, in which it was cov- tion prior to reporting the HMDA–LAR to its
ered, but does not report data for the suc- regulatory agency. (Appendix A of this part,
ceeding calendar year. (Appendix A of this Paragraph II.E.)
part, Paragraph I.) 2. Updating— agency requirements. Certain
2. Adjustment of exemption threshold for de- state or federal regulations, such as the Fed-
pository institutions. For data collection in eral Deposit Insurance Corporation’s regula-
2002, the asset–size exemption threshold is tions, may require an institution to update
$32 million. Depository institutions with as- its data more frequently than is required
sets at or below $32 million are exempt from under Regulation C. (Appendix A of this
collecting data for 2002. part, Paragraph II.E.)
3. Coverage after a merger. Several scenarios 3. Form of updating. An institution may
of data collection responsibilities for the cal- maintain the quarterly updates of the
endar year of a merger are described below. HMDA–LAR in electronic or any other for-
Under all the scenarios, if the merger results mat, provided the institution can make the
in a covered institution, that institution information available to its regulatory agen-
must begin data collection January 1 of the cy in a timely manner upon request. (Appen-
following calendar year. (Appendix A of this dix A of this part, Paragraph II.E.)
part, Paragraph I.)
Paragraph 4(a)(1) Application date.
i. Two institutions are exempt from Regu-
1. Application date— consistency. In report-
lation C because of asset size. The institu-
tions merge. No data collection is required ing the date of application, an institution re-
for the year of the merger (even if the merg- ports the date the application was received
er results in a covered institution). or the date shown on the application. Al-
ii. A covered institution and an exempt in- though an institution need not choose the
stitution merge. The covered institution is same approach for its entire HMDA submis-
the surviving institution. For the year of the sion, it should be generally consistent (such
merger, data collection is required for the as by routinely using one approach within a
covered institution’s transactions. Data col- particular division of the institution or for a
lection is optional for transactions handled category of loans). (Appendix A of this part,
in offices of the previously exempt institu- Paragraph V.A.2.)
tion. 2. Application date— application forwarded by
iii. A covered institution and an exempt in- a broker. For an application forwarded by a
stitution merge. The exempt institution is broker, an institution reports the date the
the surviving institution, or a new institu- application was received by the broker, the
tion is formed. Data collection is required date the application was received by the in-
for transactions of the covered institution stitution, or the date shown on the applica-
that take place prior to the merger. Data tion. Although an institution need not
collection is optional for transactions taking choose the same approach for its entire
place after the merger date. HMDA submission, it should be generally
iv. Two covered institutions merge. Data consistent (such as by routinely using one
collection is required for the entire year. The approach within a particular division of the
surviving or resulting institution files either institution or for a category of loans). (Ap-
a consolidated submission or separate sub- pendix A of this part, Paragraph V.A.2.)
missions for that year. 3. Application date— reinstated application.
4. Mergers versus purchases in bulk. If a cov- If, within the same calendar year, an appli-
ered institution acquires loans in bulk from cant asks an institution to reinstate a
another institution (for example, from the counteroffer that the applicant previously
receiver for a failed institution) but no did not accept (or asks the institution to re-
merger or acquisition of an institution is in- consider an application that was denied,
volved, the institution reports the loans as withdrawn, or closed for incompleteness),
purchased loans. (Appendix A of this part, the institution may treat that request as the
Paragraph V.B.) continuation of the earlier transaction or as
a new transaction. If the institution treats
Section 203.4—Compilation of Loan Data the request for reinstatement or reconsider-
4(a) Data format and itemization. ation as a new transaction, it report the date
1. Quarterly updating. An institution must of the request as the application date. (Ap-
make a good-faith effort to record all data pendix A of this part, Paragraph V.A.2.)
concerning covered transactions—loan origi- Paragraph 4(a)(2) Type and purpose.
nations (including refinancings), loan pur- 1. Purpose— multiple-purpose loan. If a loan
chases, and the disposition of applications is for home improvement and another cov-
that did not result in originations—fully and ered purpose, an institution reports the loan

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Federal Reserve System Pt. 203, Supp. I
as a home-improvement loan if the institu- tion reports the action taken as a denial.
tion classifies it as a home-improvement (Appendix A of this part, Paragraph V.B.)
loan. Otherwise the institution reports the 2. Action taken— rescinded transactions. If a
loan as a home-purchase loan or a refi- borrower rescinds a transaction after clos-
nancing, as appropriate. An institution may ing, the institution, on a case-by-case basis,
determine how to report such loans on a may report the transaction either as an
case-by-case basis. (Appendix A of this part, origination or as an application that was ap-
Paragraphs V.A.4. and 5.) proved but not accepted. (Appendix A of this
Paragraph 4(a)(3) Occupancy. part, Paragraph V.B.)
1. Occupancy— actual occupancy status. If a 3. Action taken— purchased loans. An insti-
loan relates to multifamily property, prop- tution reports the loans that it purchased
erty located outside an MSA, or property in during the calendar year, and does not report
an MSA where the institution has no home the loans that it declined to purchase. (Ap-
or branch office, the institution may either pendix A of this part, Paragraph V.B.)
report the actual occupancy status or report 4. Action taken— conditional approvals. If an
using the code for ‘‘not applicable.’’ (A non- institution issues a loan approval subject to
depository institution may be deemed to the applicant’s meeting underwriting condi-
have a home or branch office in an MSA tions (other than customary loan commit-
under § 203.2(c)(2) of Regulation C.) (Appendix ment or loan closing conditions, such as a
A of this part, Paragraph V.A.7.) ‘‘clear title’’ requirement or an acceptable
2. Occupancy— multiple properties. If a loan property survey) and the applicant does not
relates to multiple properties, the institu- meet them, the institution reports the ac-
tion reports the owner-occupancy status of tion taken as a denial. (Appendix A of this
the property for which property location is part, Paragraph V.B.)
5. Action taken date— approved but not ac-
being reported. (See the comments to para-
cepted. For a loan approved by an institution
graphs 4(a)(6) Property location.) (Appendix
but not accepted by the applicant, the insti-
A of this part, Paragraphs V.A.6. and 7.)
tution reports using any reasonable date,
Paragraph 4(a)(4) Loan amount.
such as the approval date, the deadline for
1. Loan amount— counteroffer. If an appli- accepting the offer, or the date the file was
cant accepts a counteroffer for an amount closed. Although an institution need not
different from the amount initially re- choose the same approach for its entire
quested, the institution reports the loan HMDA submission, it should be generally
amount granted. If an applicant does not ac- consistent (such as by routinely using one
cept a counteroffer or fails to respond, the approach within a particular division of the
institution reports the loan amount initially institution or for a category of loans). (Ap-
requested. (Appendix A of this part, Para- pendix A of this part, Paragraph V.B.3.b.)
graph V.A.8.f.) 6. Action taken date— originations. For loan
2. Loan amount— multiple-purpose loan. Ex- originations, an institution generally reports
cept in the case of a home-equity line of the settlement or closing date. For loan
credit, an institution reports the entire originations that an institution acquires
amount of the loan, even if only a part of the through a broker, the institution reports ei-
proceeds is intended for home purchase or ther the settlement or closing date, or the
home improvement. (Appendix A of this part, date the institution acquired the loan from
Paragraph V.A.8.) the broker. If the disbursement of funds
3. Loan amount— home-equity line. An insti- takes place on a date later than the settle-
tution that reports home-equity lines of ment or closing date, the institution may
credit reports only the part that is intended use the date of disbursement. For a construc-
for home-improvement or home-purchase tion/permanent loan, the institution reports
purposes. An institution may rely on the ap- either the settlement or closing date, or the
plicant’s oral or written statement about the date the loan converts to the permanent fi-
proposed use of the loan proceeds. (Appendix nancing. Although an institution need not
A of this part, Paragraph V.A.8.c.) choose the same approach for its entire
4. Loan amount— assumption. An institution HMDA submission, it should be generally
that enters into a written agreement accept- consistent (such as by routinely using one
ing a new party as the obligor on a loan re- approach within a particular division of the
ports the amount of the outstanding prin- institution or for a category of loans). (Ap-
cipal on the assumption as the loan amount. pendix A of this part, Paragraph V.B.3.)
(Appendix A of this part, Paragraphs V.A.8.) Paragraph 4(a)(6) Property location.
Paragraph 4(a)(5) Type of action taken and 1. Property location— multiple properties
date. (home improvement/refinance of home improve-
1. Action taken— counteroffers. If an institu- ment). For a home-improvement loan, an in-
tion makes a counteroffer to lend on terms stitution reports the property being im-
different from the applicant’s initial request proved. If more than one property is being
(for example, for a shorter loan maturity) improved, the institution reports the loca-
and the applicant does not accept the tion of one of the properties or reports the
counteroffer or fails to respond, the institu- loan using multiple entries on its HMDA–

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Pt. 203, Supp. I 12 CFR Ch. II (1–1–02 Edition)
LAR (with unique identifiers) and allocating with a lender to complete an application
the loan amount among the properties. (Ap- that was begun by mail or telephone, the in-
pendix A of this part, Paragraph V.C.) stitution must request the monitoring infor-
2. Property location— multiple properties mation. If the meeting occurs after the ap-
(home purchase/refinance of home purchase). plication process is complete, for example, at
For a home-purchase loan, an institution re- closing, the institution is not required to ob-
ports the property taken as security. If an tain monitoring information. (Appendix A of
institution takes more than one property as this part, Paragraph V.D.)
security, the institution reports the location 4. Applicant data— joint applicant. A joint
of the property being purchased if there is applicant may enter the government moni-
just one. If the loan is to purchase multiple toring information on behalf of an absent
properties and is secured by multiple prop- joint applicant. If the information is not pro-
erties, the institution reports the location of vided, the institution reports using the code
one of the properties or reports the loan for ‘‘information not provided by applicant
using multiple entries on its HMDA–LAR in mail or telephone application.’’ (Appendix
(with unique identifiers) and allocating the A of this part, Paragraph V.D.)
loan amount among the properties. (Appen- 5. Applicant data— video and other electronic
dix A of this part, Paragraph V.C.) application processes. An institution that ac-
3. Property location— loans purchased from cepts applications through electronic media
another institution. The requirement to report with a video component treats the applica-
the property location by census tract in an tions as taken in person and collects the in-
MSA where the institution has a home or formation about the race or national origin
branch office applies not only to loan appli- and sex of applicants. An institution that ac-
cations and originations but also to loans cepts applications through electronic media
purchased from another institution. This in- without a video component (for example, the
cludes loans purchased from an institution Internet or facsimile) treats the applications
that did not have a home or branch office in as accepted by mail. (Appendix A of this
that MSA and did not collect the property part, Paragraph V.D.) (See Appendix B of
location information. (Appendix A of this this part for procedures to be used for data
part, Paragraph V.C.) collection.)
4. Property location— mobile or manufactured 6. Income data— income relied upon. An insti-
home. If information about the potential site tution reports the gross annual income re-
of a mobile or manufactured home is not lied on in evaluating the creditworthiness of
available, an institution reports using the applicants. For example, if an institution re-
code for ‘‘not applicable.’’ (Appendix A of lies on an applicant’s salary to compute a
this part, Paragraph V.C.) debt-to-income ratio, but also relies on the
5. Property location— use of BNA. At its op- applicant’s annual bonus to evaluate credit-
tion, an institution may report property lo- worthiness, the institution reports the sal-
cation by using a block numbering area ary and the bonus to the extent relied upon.
(BNA). The U.S. Census Bureau, in conjunc- Similarly, if an institution relies on the in-
tion with state agencies, has established come of a cosigner to evaluate creditworthi-
BNAs as statistical subdivisions of counties ness, the institution includes this income to
in which census tracts have not been estab- the extent relied upon. But an institution
lished. BNAs are generally identified in cen- does not include the income of a guarantor
sus data by numbers in the range 9501 to who is only secondarily liable. (Appendix A
9999.99. (Appendix A of this part, Paragraph of this part, Paragraph V.D.5.)
V.C.4.) 7. Income data— co-applicant. If two persons
Paragraph 4(a)(7) Applicant and income data. jointly apply for a loan and both list income
1. Applicant data— completion by applicant. on the application, but the institution relies
An institution reports the monitoring infor- only on the income of one applicant in com-
mation as provided by the applicant. For ex- puting ratios and in evaluating creditworthi-
ample, if an applicant checks the ‘‘other’’ ness, the institution reports only the income
box the institution reports using the ‘‘other’’ relied on. (Appendix A of this part, Para-
code. (Appendix A of this part, Paragraph graph V.D.5.)
V.D.) 8. Income data— loan to employee. An institu-
2. Applicant data— completion by lender. If an tion may report ‘‘NA’’ in the income field for
applicant fails to provide the requested in- loans to employees to protect their privacy,
formation for an application taken in person, even though the institution relied on their
the institution reports the data on the basis income in making its credit decisions. (Ap-
of visual observation or surname. As stated pendix A of this part, Paragraph V.D.5.)
in paragraph I.B.5 to Appendix B of this part, Paragraph 4(a)(8) Purchaser.
the institution does not use the ‘‘other’’ 1. Type of purchaser— loan participation in-
code, but selects from the categories listed terests sold to more than one entity. An institu-
on the form. (Appendix A of this part, Para- tion that originates a loan, and then sells it
graph V.D.) to more than one entity, reports the ‘‘type of
3. Applicant data— application completed in purchaser’’ based on the entity purchasing
person. When an applicant meets in person the greatest interest, if any. If an institution

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Federal Reserve System Pt. 204
retains a majority interest it does not report obtained from these third parties). (Appendix
the sale. (Appendix A of this part, Paragraph A of this part, Paragraph V.C.)
V.E.) [Reg. C, 60 FR 63396, Dec. 11, 1995, as amended
4(c) Optional data. at 62 FR 28626, May 27, 1997; 62 FR 66260, Dec.
1. Agency requirements. Certain state or fed- 18, 1997; 63 FR 70997, Dec. 23, 1998; 64 FR 70992,
eral entities, such as the Office of Thrift Su- Dec. 20, 1999; 65 FR 80735, Dec. 22, 2000; 66 FR
pervision, require institutions to report the 66295, Dec. 26, 2001]
reasons for denial even though this is op-
tional reporting under HMDA and Regula-
tion C. (Appendix A of this part, Paragraph
PART 204—RESERVE REQUIREMENTS
V.F.) OF DEPOSITORY INSTITUTIONS
4(d) Excluded data. (REGULATION D)
1. Loan pool. The purchase of an interest in
a loan pool (such as a mortgage-participa- Sec.
tion certificate, a mortgage-backed security, 204.1 Authority, purpose and scope.
or a real estate mortgage investment con- 204.2 Definitions.
duit or ‘‘REMIC’’) is a purchase of an inter- 204.3 Computation and maintenance.
est in a security under HMDA and is not re- 204.4 Transitional adjustments in mergers.
ported on the HMDA–LAR. (Appendix A of 204.5 Emergency reserve requirement.
this part, Paragraph IV.B.5.) 204.6 Supplemental reserve requirement.
204.7 Penalties.
Section 203.5—Disclosure and Reporting 204.8 International banking facilities.
5(a) Reporting to agency. 204.9 Reserve requirement ratios.
1. Change in supervisory agency. If the su- INTERPRETATIONS
pervisory agency for a covered institution
changes (as a consequence of a merger or a 204.121 Bankers’ banks.
change in the institution’s charter, for ex- 204.122 Secondary market activities of
ample), the institution reports data to its international banking facilities.
new supervisory agency for the year of the 204.123 Sale of Federal funds by investment
companies or trusts in which the entire
change and subsequent years. (Appendix A of
beneficial interest is held exclusively by
this part, Paragraphs I., III. and VI.)
depository institutions.
2. Subsidiaries. An institution is a sub- 204.124 Repurchase agreement involving
sidiary of a bank or savings association (for shares of a money market mutual fund
purposes of reporting HMDA data to the par- whose portfolio consists wholly of United
ent’s supervisory agency) if the bank or sav- States Treasury and Federal agency se-
ings association holds or controls an owner- curities.
ship interest that is greater than 50 percent 204.125 Foreign, international, and supra-
of the institution. (Appendix A of this part, national entities referred to in
Paragraph I.E. and VI.) §§ 204.2(c)(1)(iv)(E) and 204.8(a)(2)(i)(B)(5).
5(e) Notice of availability. 204.126 Depository institution participation
1. Poster— suggested text. The suggested in ‘‘Federal funds’’ market.
wording of the poster text provided in Ap- 204.127 Nondepository participation in
pendix A of this part is optional. An institu- ‘‘Federal funds’’ market.
tion may use other text that meets the re- 204.128 Deposits at foreign branches guaran-
quirements of the regulation. (Appendix A of teed by domestic office of a depository
this part, Paragraph III.F.) institution.
204.130 Eligibility for NOW accounts.
Section 203.6—Enforcement 204.131 Participation by a depository insti-
tution in the secondary market for its
6(b) Bona fide errors. own time deposits.
1. Bona fide error— information from third 204.132 Treatment of loan strip participa-
parties. An institution that obtains the prop- tions.
erty location information for applications 204.133 Multiple savings deposits treated as
and loans from third parties (such as ap- a transaction account.
praisers or vendors of ‘‘geocoding’’ services) 204.134 Linked time deposits and trans-
is responsible for ensuring that the informa- action accounts.
tion reported on its HMDA–LAR is correct. 204.135 Shifting funds between depository
An incorrect entry for a census tract number institutions to make use of the low re-
is a bona fide error, and is not a violation of serve tranche.
the act or regulation, provided that the in- 204.136 Treatment of trust overdrafts for re-
stitution maintains reasonable procedures to serve requirement reporting purposes.
avoid such errors (for example, by con- AUTHORITY: 12 U.S.C. 248(a), 248(c), 371a,
ducting periodic checks of the information 461, 601, 611, and 3105.

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