An applicant declines to state ethnicity, race and sex on a $185,000 application taken entirely by telephone on 12 August. For this HMDA-covered application, how should the lender record the declined demographic information?
Correct Answer
D) Record that she declined; visual observation does not apply by phone
D. Report that the applicant did not provide the information for this telephone application. The institution must request the information, but the applicant need not supply it. An entirely telephone application does not authorize substituting a guess based on surname or voice. Scope and exceptions: Applications with a video component are treated as in person. Later in-person completion can invoke separate instructions; a meeting after completion, such as closing, does not itself require recollection. Report any information actually supplied even if other fields are declined. Source: Appendix B, instructions 1–3 and 11–13 — https://www.consumerfinance.gov/rules-policy/regulations/1003/b/
Why This Is the Correct Answer
D. Report that the applicant did not provide the information for this telephone application. The institution must request the information, but the applicant need not supply it. An entirely telephone application does not authorize substituting a guess based on surname or voice. Scope and exceptions: Applications with a video component are treated as in person. Later in-person completion can invoke separate instructions; a meeting after completion, such as closing, does not itself require recollection. Report any information actually supplied even if other fields are declined.
Why the Other Options Are Wrong
Option A: Record nothing at all, since the applicant has exercised her right not to say
An empty field is not the prescribed non-provision reporting treatment.
Option B: Record your own best estimate, as the data must be complete for the file
An estimate would invent demographic data.
Option C: Record it as unknown, and ask again in writing before consummation
A generic unknown entry and mandatory later written request are not the stated procedure.
Exam Tip
Use the application-channel instructions and the applicant-provided data, not assumptions.
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