Overview
The Home Mortgage Disclosure Act (HMDA), implemented by Regulation C, is a federal law that requires many financial institutions to collect, report, and publicly disclose information about their mortgage lending activities. Enacted in 1975 and updated by the Dodd-Frank Act, HMDA’s primary goal is to promote transparency, help identify discriminatory lending patterns, and ensure that lenders are serving the housing needs of their communities. Oversight is provided by the Consumer Financial Protection Bureau (CFPB), with support from agencies like the Federal Financial Institutions Examination Council (FFIEC).
Who It Applies To
- Banks, savings associations, and credit unions meeting asset and activity thresholds
- Mortgage lenders and brokers
- Non-bank financial institutions that originate a significant number of home loans
- Some branches and agencies of foreign banks with U.S. operations
Institutions with assets below the annual exemption threshold (e.g., $58 million for 2025) are generally exempt from HMDA reporting.
Key Requirements
- Data Collection: Covered institutions must collect detailed data on home purchase, home improvement, and refinancing loans, including applications, originations, denials, and withdrawals.
- Data Points: Required data include loan amount, property location (census tract), borrower demographics (race, ethnicity, sex, age), loan type, and pricing information.
- Reporting: Annual HMDA reports must be submitted by March 1 for the prior calendar year. Large-volume reporters may have quarterly reporting obligations.
- Public Disclosure: Institutions must make HMDA data available to the public, with certain modifications to protect borrower privacy.
- Recordkeeping: Data must be recorded within 30 days of the end of each calendar quarter and retained for at least three years.
- Notice Requirements: Institutions must inform the public that HMDA data is available for review on the CFPB’s website.
Practical Impact
- Community Assessment: Data helps regulators, public officials, and the public assess whether lenders are meeting the credit needs of their communities, especially in low- and moderate-income neighborhoods.
- Fair Lending: HMDA data is used to identify potential discriminatory lending patterns and enforce fair lending laws.
- Strategic Planning: Lenders use HMDA data to benchmark performance, identify market opportunities, and improve compliance programs.
- Transparency: Public disclosure of lending data increases accountability for financial institutions.
Examples
- A bank must report all mortgage loan applications, including those denied or withdrawn, with detailed demographic and geographic data.
- A credit union reviews its HMDA data to identify gaps in lending to minority communities and adjusts outreach efforts.
- A mortgage company uses HMDA data to compare its lending patterns with peers in the same market.
Compliance Checklist
- Determine if your institution meets HMDA coverage thresholds based on assets, location, and loan activity.
- Collect required data for all covered loans and applications, including denials and withdrawals.
- Record data within 30 days of quarter-end and retain records for at least three years.
- Submit annual (and, if required, quarterly) HMDA reports by the deadlines.
- Disclose HMDA data to the public and provide notice of data availability.
- Train staff on data collection, reporting, and fair lending obligations.
- Review and update compliance programs regularly to reflect regulatory changes.
Penalties for Non-Compliance
- Civil money penalties for inaccurate or incomplete reporting
- Regulatory enforcement actions, including orders to correct deficiencies
- Increased scrutiny during examinations and possible restrictions on business activities
- Reputational harm and loss of public trust
Recent Updates or Changes
- The asset-size exemption threshold is adjusted annually (e.g., $58 million for 2025).
- The threshold for closed-end mortgage loan reporting is currently 25 loans in each of the two preceding calendar years, following litigation and regulatory amendments.
- The threshold for open-end lines of credit is 200 in each of the two preceding calendar years.
- The CFPB has clarified partial exemptions for certain smaller institutions and expanded data collection requirements under the Dodd-Frank Act.
- Ongoing updates address digital data collection, expanded data points, and privacy protections.
Future Amendments and Regulatory Trends
- Continued refinement of coverage thresholds and data requirements in response to industry feedback and litigation
- Increased focus on digital mortgage lending and fintech participation
- Enhanced data privacy and security measures for public disclosures
- Potential expansion of HMDA coverage to additional non-bank lenders
Comparison: HMDA/Regulation C vs. International Disclosure Standards
| Feature | HMDA/Regulation C (U.S.) | International Standards (UK, EU, Canada) |
|---|---|---|
| Data Collection | Mandatory for covered institutions | Varies; some countries require similar disclosures |
| Public Disclosure | Required, with privacy modifications | Less common; some aggregate reporting |
| Lending Discrimination | Data used for fair lending enforcement | Similar use in anti-discrimination enforcement |
| Scope | Broad, covers most residential mortgages | Varies by jurisdiction |
| Enforcement | CFPB, FFIEC, federal banking agencies | National regulators |
HMDA is among the most comprehensive mortgage disclosure regimes globally, with detailed public data and strong enforcement mechanisms.
Challenges Faced by Institutions
- Managing complex and evolving data collection and reporting requirements
- Ensuring data accuracy and completeness, especially with expanded data points
- Adapting systems and processes to annual threshold changes and new regulatory guidance
- Balancing transparency and privacy, especially in public data disclosures
- Training staff and maintaining compliance across multiple business lines and loan products
Looking Ahead
HMDA and Regulation C will continue to play a critical role in promoting fair, transparent, and equitable mortgage lending. As the mortgage industry evolves, institutions must invest in robust compliance systems, stay informed on regulatory changes, and use HMDA data to improve both business practices and community outcomes.
Useful Resources
- CFPB Regulation C (Home Mortgage Disclosure)
- FFIEC HMDA Data and Reporting Resources
- OCC Home Mortgage Disclosure Act Fact Sheet
- FDIC HMDA Compliance Guide
- NCUA HMDA Regulation C Guide
FAQs
Q: What is the main purpose of the Home Mortgage Disclosure Act?
A: To promote transparency in mortgage lending, help identify discriminatory patterns, and ensure lenders are meeting community credit needs.
Q: Who must comply with Regulation C?
A: Banks, credit unions, mortgage lenders, and certain non-bank institutions that meet asset and loan volume thresholds.
Q: What data must be reported under HMDA?
A: Detailed information about mortgage applications, originations, denials, borrower demographics, loan terms, and property location.
Q: What are the penalties for non-compliance?
A: Penalties include civil fines, enforcement actions, and reputational harm.
Q: Has HMDA changed recently?
A: Yes, recent updates include changes to reporting thresholds, expanded data points, and new partial exemptions for smaller lenders.