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Ethnicity and Race Fields: There IS a

The reporting of borrower ethnicity and race data has changed under the revised HMDA requirements. Here are the highlights of the changes:

  • In 2002, the Federal Reserve Board amended Regulation C’s rules for collection of information about an applicant’s ethnicity and race, to conform them to the revised standards of the Office of Management and Budget (OMB) for collection of such data. Ethnicity is a new field that was added to the HMDA Loan/Application Register (LAR) beginning January 1, 2004.
  • Institutions must report a code in the ethnicity field for the applicant and co-applicant, if applicable, and at least one race field for the applicant and co-applicant fields on every LAR record.
  • Beginning with applications taken on or after January 1, 2004, if an applicant self-identifies as “Hispanic or Latino” under the category of “Ethnicity,” the applicant should be asked to identify a race, or races, from among the five choices available. Although OMB’s definitions may be offered to the applicant as an aid, the choice of how to self-identify is entirely the applicant’s. An applicant and/or co-applicant can designate up to the five racial designations and all codes corresponding to the applicant and/or co-applicant’s selections must be reported.
  • OMB has adopted definitions for the five races and Hispanic ethnicity (
  • The choices for ethnicity are:
    • Hispanic or Latino. A person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin, regardless of race. The term “Spanish origin” can be used in addition to “Hispanic or Latino.”
    • Not Hispanic or Latino
  • The choices for race are:
    • American Indian or Alaskan Native. A person having origins in any of the original peoples of North and South America (including Central America), and who maintains tribal affiliation or community attachment.
    • Asian. A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian subcontinent including, for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Phillipine Islands, Thailand, and Vietnam.
    • Black or African American. A person having origins in any of the black racial groups or Africa. Terms such as “Haitian” or “Negro” can be used in addition to “Black or African American.”
    • Native Hawaiian or Other Pacific Islander. A person having origins in any of the original peoples of Hawaii, Guam, Samoa, or other Pacific Islands.
    • White. A person having origins in any of the original peoples of Europe, the Middle East, or North Africa.
  • If a lender is face-to-face with an applicant who (1) has self-identified as “Hispanic or Latino” (or whom the lender has identified as of that ethnicity because the applicant has declined to self-identify) and (2) has not identified a race, the lender must identify whatever race or races the lender believes would apply, based on surname and visual observation. In those circumstances, the lender may not indicate code 7 (for “Not Applicable”) in the race field. Code 7, or “Not Applicable,” is used in the race field only if (1) the applicant is not a natural born person, (2) the HMDA reporter has purchased, not originated, the loan, or (3) an application was taken before January 1, 2004, and reached final action on or after January 1, 2004.

There has been some confusion and concern raised about this change: some lenders are either mistaken about the applicability of the new codes or hesitant to identify the race or races of an applicant and/or co-applicant based on surname and visual observation, and are indicating code 7, or “Not Applicable.” It is too early to know what impact these issues will have on the data.

  • Telephone applicant declines to provide race, ethnicity, or gender. If an application is taken entirely by mail, Internet, or telephone, and the applicant declines to provide information on ethnicity, race, or gender, the lender must use the code for “information not provided by applicant in mail, Internet, or telephone application.” A lender must ask the applicant and/or the co-applicant for the government monitoring information, such as ethnicity and race data, but cannot require him or her to provide it, regardless of whether the application is taken in person, by mail, by telephone, or on the Internet.
  • A lender must report whatever information the applicant supplies, whether partial or complete. For example, if, on an application submitted by mail, an applicant marks a box indicating the applicant “does not wish to furnish” government monitoring information but supplies some or all of the information, the lender must report the information supplied. Unless the applicant clearly indicates he or she declines to supply any information, the applicant must be given the opportunity to supply any part of the information he or she chooses.