A quality-control reviewer flags a case because a compliance analyst asks why covered mortgage application data is collected. What correction is appropriate?
Correct Answer
D) Collect and report covered mortgage lending data
Why this is correct: The Home Mortgage Disclosure Act (HMDA), implemented by Regulation C (12 CFR Part 1003), requires covered financial institutions to collect and report specific data about their mortgage lending activity. A quality-control flag for a failure to collect this data must be corrected by performing the mandated action: "Collect and report covered mortgage lending data." Why the other choices are wrong: "Use a generic national checklist instead of the requirement in this supervisory exam response" is wrong because a generic checklist may not ensure specific HMDA compliance; the law itself dictates the action. "Document that licensing and NMLS authority was reviewed, but take no required corrective action" is wrong because documenting other reviews does not correct the failure to collect HMDA data. "Use an informal exception and leave the required record unchanged" is wrong because HMDA does not allow for informal exceptions to its reporting mandate. Exam tip: When a QC review finds a missing HMDA step, the fix is to perform that step: collect and report the data.
Why This Is the Correct Answer
The correct response is "Collect and report covered mortgage lending data". HMDA is a data collection and reporting framework for covered mortgage lending activity.
Why the Other Options Are Wrong
Option A: Use a generic national checklist instead of the requirement in this supervisory exam response.
Use a generic national checklist instead of the requirement in this supervisory exam response. is not correct because it bypasses the rule supported by the explanation.
Option B: Document that licensing and NMLS authority was reviewed, but take no required corrective action.
Document that licensing and NMLS authority was reviewed, but take no required corrective action. is not correct because it bypasses the rule supported by the explanation.
Option C: Use an informal exception and leave the required record unchanged.
Use an informal exception and leave the required record unchanged. is not correct because it bypasses the rule supported by the explanation.
Memory Technique
HMDA questions usually ask about collecting, reporting, and disclosing loan data.
Exam Tip
HMDA questions usually ask about collecting, reporting, and disclosing loan data.
Common Mistakes to Avoid
- -HMDA is not limited to closed loans or credit-score analysis.
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