Under the new HMDA regulations that will take full effect in 2018, the Application Date is one of the HMDA reporting data points that will not change. Your financial institution will either report the date that the application was received or the date that is listed on the initial loan application. While the rule gives the institution leeway to choose which to report, the method should remain generally consistent throughout the entire reporting process.
How an institution treats a loan application can also effect which date is reported. An example of this is when within the same calendar year, the applicant asks to reinstate a counteroffer that had been previously rejected or when the applicant asks the lender to reconsider an application that had been denied, withdrawn, or incomplete. The institution has two options. It can consider it a continuation of the previous loan, in which case the original application date should be reported. Alternatively, it can also be treated as a new transaction, making the date of the request for reconsideration the date that is reported.
Figuring out the application date can be relatively easy for consumer applications; however commercial loans can be more difficult. For these types of loans that are HMDA reportable, it can be hard to determine which date to report as applications are not necessarily required. One method that could be used by an institution for HMDA reporting of commercial loans is to report the date that the loan request was received.
Remember, consistency is key when reporting the application date.
Assigning a Universal Loan Identifier (ULI) is the first step when it comes to reporting your HMDA data. This number is unique for each individual loan and will remain attached to the loan even if it is sold to another institution. The ULI is not just a random string of characters, it must follow a specific order as stated in Regulation C. The first part of the ULI is the Legal Entity Identifier (LEI). This is the 20-character code that is assigned to a financial institution by either The Global LEI Foundation or the LEI Regulatory Oversight Committee.
This is followed by a set of numbers that must be unique to your financial institution. This portion of the ULI can be up to 23 characters long and it can contain both numbers and letters. There is one caveat to this section however, the characters chosen cannot include any information that could identify the applicant or the borrower. For example, the applicant’s social security number, name, or the number that appears on their driver’s license cannot be used as part of the ULI.
The last portion of the ULI is a two-character check digit. The purpose of the two digits is to verify, by using a multi-step process, that the sequence of numbers and/or characters used in the ULI are correct. In order to determine what these last two characters should be, you can follow the process that is listed in Appendix C to manually generate the digits (www.consumerfinance.gov/eregulations/1003). This process can seem complicated; however, we are in luck. The CFPB has stated that they are currently in the process of creating a check digit generator that they will publish on their website at some point in the future.
For more information on HMDA regulations, 2018 data point changes or our HMDA compliance services, please call Rhonda Wannemuehler or Betsy Reynolds at 855-734-7655.
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