Ever wonder why the gender and race boxes are on loan applications? Whose business is it whether I am male or female, or which race or ethnic group I am part of? It is your government’s business. The Home Mortgage Disclosure Act, or HMDA was enacted in 1975 in order to protect against “redlining” (geographic discrimination against people in an area where the depository financial institution issues residential mortgages.) HMDA requires race and gender reporting in order to monitor each institution’s lending practices.
The CFPB Consumer Financial Protection Bureau uses Regulation C (HMDA) to determine distribution plans for public sector investment to draw more private investments to areas that need it. The records from the HMDA requirements also help officials to identify discriminatory lending practices for enforcement.
Today, August 30, the Federal Financial Institutions Examination Council (FFIEC) announced the availability of data on mortgage lending transactions at 5,683 U.S. banks, savings associations, credit unions and mortgage companies.