HMDA: What Lenders Must Report and Why It Matters

Quick Takeaways:

What Is HMDA and Who Must Comply?
Key Data Points Lenders Must Report
How the HMDA Reporting Process Works
5 Common HMDA Compliance Mistakes (and How to Avoid Them)
Frequently Asked Questions

I’ve spent years helping community banks and credit unions get their HMDA submissions right. And honestly, the most common reaction I hear is: “I had no idea we were supposed to report that.” HMDA was enacted to require lenders to collect and disclose data about their mortgage lending activity—but the devil is in the details. Let me walk you through exactly what you need to know, including the little traps that trip up even experienced compliance officers.

What Is HMDA and Who Must Comply?

The Home Mortgage Disclosure Act (HMDA) was passed in 1975 to require lenders to report data on home loans. The idea was to give regulators and the public a window into whether banks were redlining or discriminating. Today, the Consumer Financial Protection Bureau (CFPB) oversees enforcement. If your institution originated at least 25 closed-end mortgages or 100 open-end lines of credit in each of the two preceding calendar years, you’re covered. That threshold catches a lot of small lenders off guard—I’ve seen credit unions with only a handful of mortgage officers suddenly realize they’re on the hook.

    Quick reality check: Even if you think you’re below the threshold, double-check. The CFPB actually revised the thresholds a few years ago, and many lenders who thought they were exempt got a nasty surprise during an exam.
  

Key Data Points Lenders Must Report

HMDA requires lenders to collect over 100 data fields per application or originated loan. But let’s focus on the ones that cause the most confusion. I’ve broken them into categories below.

Category	Data Point Examples	Why It’s Tricky
Borrower Demographics	Race, ethnicity, sex, age	Borrowers can refuse to provide this, and you need to note “not provided” correctly.
Loan Characteristics	Amount, rate spread, loan type (conventional, FHA, VA)	Rate spread is calculated against a benchmark—get the benchmark wrong and your data is garbage.
Property Details	Census tract, property value, occupancy type	Census tract must be assigned using the current year’s geocoding tools. A client once used outdated tract boundaries and had to resubmit.
Action Taken	Originated, denied, withdrawn, etc.	Denial reasons must match the action—mismatches are a top CFPB finding.

How the HMDA Reporting Process Works

Here’s the typical cycle, from my experience working with lenders. It’s not just about filing numbers—it’s about building a system that works year-round.

1. Data Collection (All Year)

Every time you take an application, start tracking the required fields. The mistake I see most often? Waiting until December to gather everything. Trust me, you’ll miss details. Set up your loan origination system (LOS) to flag missing HMDA fields at the point of entry.

2. Geocoding and Validation (Before March 1)

Assign census tracts to each property address. The FFIEC Geocoding System is free but finicky. I always run a test batch in February to catch errors early. Also, run the CFPB’s EDITS checks—your file must pass them before submission.

3. Submission (By March 1)

Submit via the HMDA Platform. But did you know you can submit a partial file and then amend? I’ve done that when a last-minute data correction came in. The platform accepts amendments as long as you do it before the final deadline.

    Pro tip: The submission window actually opens January 1. Don’t wait until February—get a draft in early. That way, if the platform crashes (and it sometimes does), you’re not panicking.
  

5 Common HMDA Compliance Mistakes (and How to Avoid Them)

Wrong rate spread calculations. The spread is the difference between the APR and the Average Prime Offer Rate (APOR). Many lenders use the wrong APOR rate because they grab it on the wrong date. Always use the rate in effect when the rate was set, not when the application was submitted.
Missing or incorrect ethnicity/race data. If a borrower doesn't provide info, you must mark it as “not provided” and not leave it blank. One bank I consulted had a policy of “if blank, assume White.” That got them a penalty.
Poor geocoding. Using a free address validator? It might not map to the correct tract. I recommend using the Census Bureau’s Geocoder or a commercial tool that updates annually.
Action taken mismatches. For example, a loan that was denied due to credit history but also marked as “application withdrawn.” The CFPB cross-checks these. If the borrower didn’t withdraw, don’t code it that way.
Submitting incomplete files. The HMDA Platform will reject a file that fails the validation rules, but it won’t tell you why in plain English. I’ve seen people resubmit five times without fixing the underlying issue. Use the CFPB’s standalone validation tool before uploading.

Frequently Asked Questions

Our credit union originated only 24 closed-end mortgages last year. Are we exempt?

Check both closed-end and open-end counts separately. If you originated 24 closed-end mortgages but also made 150 open-end home equity lines, you still need to report—because the open-end threshold is 100. The exemption is per category, not combined. I’ve seen plenty of small lenders get caught this way.

What happens if we miss the March 1 deadline?

The CFPB can impose civil money penalties. In practice, if you’re a first-time offender and you submit within a few weeks late, you might get a warning. But repeat offenders face fines that can reach hundreds of thousands. I recommend setting an internal deadline of February 15—that gives you a cushion if something goes wrong.

Do we need to report withdrawn applications?

Yes, if the application was started (you collected at least the borrower’s name and property address) and later the borrower withdrew. But note: if the application was never completed—say someone called for a rate quote and hung up—that’s not reportable. I always tell lenders: err on the side of reporting, but document your policy consistently.

How do we handle loans sold to another institution? Who reports the data?

The originating lender reports the HMDA data at origination. The loan purchaser does not report it as a new HMDA record. However, if the purchaser buys the loan before the report is filed, they may need to ensure the data is reported correctly. I’ve seen chaos where the originator thought the buyer would handle it. Don’t assume.

This article is based on real compliance experiences. Facts checked against CFPB HMDA regulation effective.