A borrower applying by telephone on 6 May declines to state her ethnicity, race and sex. The originator can see none of the 3 and the file is otherwise complete. For this HMDA-covered telephone application, how should the lender record the demographic information the applicant declines to provide?
Correct Answer
C) Report that the applicant did not provide the information in a telephone application
C. Report the telephone nonresponse, rather than inventing demographic information. The lender must request these demographic items, but the applicant need not supply them. Appendix B gives a specific reporting outcome for a telephone applicant who declines. It is not an instruction to leave required reporting fields empty. Scope and exceptions: For an in-person application, different observation or surname instructions apply. Do not generalize this telephone outcome to every application channel. Source: Appendix B, paragraphs 1, 10–11 — https://www.consumerfinance.gov/rules-policy/regulations/1003/b/
Why This Is the Correct Answer
C. Report the telephone nonresponse, rather than inventing demographic information. The lender must request these demographic items, but the applicant need not supply them. Appendix B gives a specific reporting outcome for a telephone applicant who declines. It is not an instruction to leave required reporting fields empty. Scope and exceptions: For an in-person application, different observation or surname instructions apply. Do not generalize this telephone outcome to every application channel.
Why the Other Options Are Wrong
Option A: Record the originator's own best estimate from her name and voice
A telephone voice or name is not permission to estimate these answers.
Option B: Return the application as incomplete until she supplies the 3 items
Refusing optional self-identification does not make this otherwise complete application incomplete.
Option D: Leave the 3 fields blank, because she is entitled not to answer
Blank fields do not communicate the required nonresponse outcome.
Exam Tip
Separate the applicant’s right not to answer from the institution’s reporting duty.
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