For release: July 10, 2003

Contact:	Charles B. Henderson
	Office:	(314) 444-8311
	E-mail:	charles.b.henderson@stls.frb.org
	Mobile:	(314) 609-5972
	Pager:	(314) 538-9526
Online Press Room:		www.stlouisfed.org/news/press_room/contact.html

New Web Site from St. Louis Fed To Help Banks Prepare for New HMDA Revisions

ST. LOUIS The Federal Reserve Bank of St. Louis has created a new web site to help lenders at depository institutions throughout the country comply with the new reporting changes that will be required by "Regulation C," which implements the Home Mortgage Disclosure Act (HMDA): http://www.stlouisfed.org/hmdaregcamendments. The changes will affect most loan applications taken on or after Jan. 1, 2004.

The Federal Reserve Board made these changes after a comprehensive review of HMDA and Regulation C, as well as comments from industry and consumer groups.

"The mortgage market has changed dramatically since HMDA was enacted and continues to evolve," said Elizabeth A. Hayes, assistant vice president in the consumer affairs department of the St. Louis Fed's Supervision & Regulation Division. "Revisions to Regulation C are necessary to keep pace with those changes and to maintain the usefulness of the HMDA data. In today's market, obtaining data on loan pricing, for example, is essential to address concerns about fair lending and other practices. The amendments will enable both regulatory agencies and the public to better understand the current mortgage market, including the extent of sub-prime lending and variations in loan pricing."

• The information required to be collected and reported in the HMDA loan application register (LAR) has been expanded and revised. The more significant provisions are:
  Lenders must collect and report information on pre-approval requests. Regulation C still excludes pre-qualification requests, however.

• Manufactured homes have been added as a required reporting option under the "property type" field.

• The definitions of home improvement loans and refinancing have been modified for clarity and to ensure more consistent data reporting. The classification test has been eliminated for dwelling-secured home improvement loans. The definition of refinancing has been narrowed by excluding the "purpose" test. Under the revisions, when a new loan satisfies and replaces the existing loan and both are dwelling-secured, the loan is reported as a refinancing.

• Lenders will have to report an applicant's ethnicity, as well as a revised description of racial characteristics.

• Lenders will be required to report pricing data on some loans. They must report the rate spread (or difference) between a loan's annual percentage rate (APR) and the yield for a Treasury security of comparable maturity when the spread exceeds certain thresholds. To calculate the yield, lenders will refer to a newly developed statistical table.

• Lenders must report whether a loan is covered by HOEPA (Home Ownership Equity Protection Act). HOEPA refers to certain loans in which the APR or the points and fees on the loan exceeds the HOEPA triggers in Section 32 of Regulation Z.

• The LAR contains a new field for reporting the lien status for certain loans.

The consequences for noncompliance with Regulation C have not changed," said Hayes. "The standards for accuracy, however, will be more stringent because all of the required new data fields are considered essential, which is why lenders must ensure they understand the new rules and put them into effect by January 1 of 2004."

Depository institutions and lenders who need additional assistance can call Hayes at (314) 444-4251.

With branches in Little Rock, Louisville and Memphis, the Federal Reserve Bank of St. Louis serves the Eighth Federal Reserve District, which includes all of Arkansas, eastern Missouri, southern Indiana, southern Illinois, western Kentucky, western Tennessee and northern Mississippi. The St. Louis Fed is one of 12 regional Reserve Banks that, along with the Board of Governors in Washington, D.C., comprise the Federal Reserve System. As the nation's central bank, the Federal Reserve System formulates U.S. monetary policy, regulates state-chartered member banks and bank holding companies, and provides payment services to financial institutions and the U.S. government.

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