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CFPB published notice that the new Fannie/Freddie Uniform Residential Loan Application is approved as a model form under ECOA (Publication).
CFPB’s Official Approval:
Regulation B § 1002.5(b) provides rules concerning requests for information about race, color, religion, national origin, or sex. Section 1002.5(c) provides rules concerning requests for information about a spouse or former spouse. Section 1002.5(d) provides rules concerning requests for information regarding marital status; income from alimony, child support, or separate maintenance; and childbearing or childrearing. Bureau staff has determined that the relevant language in the 2016 URLA is in compliance with these regulatory provisions. A creditor’s use of the 2016 URLA is not required under Regulation B. However, a creditor that uses the 2016 URLA without any modification that would violate § 1002.5(b) through (d) would act in compliance with § 1002.5(b) through (d). The issuance of this Bureau official approval has been duly authorized by the Director of the Bureau and provides the protection afforded under section 706(e) of ECOA.
Accordingly, lenders will be authorized to use the new URLA when collecting certain required information for government monitoring purposes under the new rule, while satisfying the disclosure requirements for the collection of this information under ECOA.
In addition, in this announcement, CFPB is allowing lenders during 2017, at their option, to permit applicants to self-identify using the new disaggregated ethnic and racial sub-categories as amended by the 2015 final Rule. These would normally take effect for applications taken in 2018.When doing so in 2017, the lender will not be considered to be in violation of the current requirements or limitations on collection of this data of ECOA.
There is a caveat, for a transitional rule for reporting ethnicity, race and age data, for loan applications taken in 2017, for which the applicant chose to self-identify, but are closed in 2018. This is outlined in Regulation C, Comment 4(a)(10)i-2.
Confused? I am. If you decide to allow 2017 applicants to self-identify, using the disaggregated sub-categories in 2017, I strongly suggest you carefully review the new announcement (above) and the rules for reporting.
BTW, Fannie provides an addendum to the URLA that can be used to collect the new sub-aggregated Categories for Ethnicity and race until the new URLA is active. It may be found HERE, along with other valuable information about the new URLA.
Happy HMDA!
