Disclosure of Loan-Level HMDA Data, 649-673 [2018-28404]

Download as PDF Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices lives affect consumers’ ability to successfully obtain and use card credit? BUREAU OF CONSUMER FINANCIAL PROTECTION (e) The Safety and Soundness of Credit Card Issuers [Docket No. CFPB–2017–0025] How is the credit cycle evolving? What, if any, safety and soundness risks are present or growing in this market, and which entities are disproportionately affected by these risks? How, if at all, do these safety and soundness risks to entities relate to long-term indebtedness on the part of some consumers, or changes in consumers’ ability to manage their debts? Has the impact of the CARD Act on safety and soundness changed over the past two years? (f) The Use of Risk-Based Pricing for Consumer Credit Cards How has the use of risk-based pricing for consumer credit cards changed since the Bureau reported on the credit card market in 2017? What has driven those changes or lack of changes? Has the impact of the CARD Act on risk-based pricing changed over the past two years? How have CARD Act provisions relating to risk-based pricing impacted (positively or negatively) the evolution of practices in this market? (g) Consumer Credit Card Product Innovation amozie on DSK3GDR082PROD with NOTICES1 How has credit card product innovation changed since the Bureau reported on the credit card market in 2017? What has driven those changes or lack of changes? Has the impact of the CARD Act on product innovation changed over the past two years? How have broader innovations in finance, such as (but not limited to) new products and entrants, evolving digital tools, greater availability of and new applications for consumer data, and new technological tools (like machine learning), impacted the consumer credit card market, either directly or indirectly? In what ways do CARD Act provisions encourage or discourage innovation? In what ways do innovations increase or decrease the impact of certain CARD Act provisions, or change the nature of those impacts? Dated: December 21, 2018. Kathleen Kraninger, Director, Bureau of Consumer Financial Protection. [FR Doc. 2019–00487 Filed 1–30–19; 8:45 am] BILLING CODE 4810–AM–P VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 Disclosure of Loan-Level HMDA Data Bureau of Consumer Financial Protection. ACTION: Final policy guidance. AGENCY: The Bureau of Consumer Financial Protection (Bureau) is issuing final policy guidance describing modifications that the Bureau intends to apply to the loan-level data that financial institutions report under the Home Mortgage Disclosure Act (HMDA) and Regulation C before the data is disclosed to the public. This final policy guidance applies to HMDA data compiled by financial institutions in or after 2018 and made available to the public by the Bureau beginning in 2019. DATES: The Bureau released this final policy guidance on its website on December 21, 2018. FOR FURTHER INFORMATION CONTACT: Benjamin Cady and David Jacobs, Counsels; Laura Stack, Senior Counsel, Office of Regulations, at 202–435–7700 or https:// reginquiries.consumerfinance.gov/. If you require this document in an alternative electronic format, please contact CFPB_Accessibility@cfpb.gov. SUPPLEMENTARY INFORMATION: SUMMARY: I. Summary HMDA requires certain financial institutions to collect, report, and disclose data about their mortgage lending activity. HMDA is implemented by Regulation C, 12 CFR part 1003. In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended HMDA and transferred HMDA rulemaking authority and other functions from the Board of Governors of the Federal Reserve System (Board) to the Bureau. Among other changes, the Dodd-Frank Act expanded the scope of information relating to mortgage applications and loans that must be collected, reported, and disclosed under HMDA and authorized the Bureau to require by rule financial institutions to collect, report, and disclose additional information. In 2015, the Bureau published a final rule amending Regulation C (2015 HMDA Final Rule) to implement the DoddFrank Act amendments to HMDA and make other changes, including adding a number of new data points. Most provisions of the 2015 HMDA Final Rule took effect on January 1, 2018, and apply to data financial institutions collect beginning in 2018 and report PO 00000 Frm 00004 Fmt 4703 Sfmt 4703 649 beginning in 2019. With respect to the public disclosure of HMDA data, the Bureau interpreted HMDA, as amended by the Dodd-Frank Act, to require that the Bureau use a balancing test to determine whether and how HMDA data should be modified prior to its disclosure to protect applicant and borrower privacy while also fulfilling HMDA’s public disclosure purposes. On September 25, 2017, the Bureau published proposed policy guidance that described the Bureau’s balancing test and how the Bureau proposed to apply it to the loan-level HMDA data made available to the public.1 After considering the comments the Bureau received on the proposal, the Bureau is publishing this final policy guidance describing the loan-level HMDA data it intends to make available to the public, including modifications to be applied to the data. The Bureau intends to make these modifications to data financial institutions collected in 2018 when the Bureau discloses that data in 2019. The Bureau is making these determinations based upon the information currently available to it, including the comments received on the proposal, with respect to the risks and benefits associated with the disclosure of loan-level HMDA data. The Bureau intends to commence a rulemaking in the spring of 2019 that will enable it to identify more definitively modifications to the data that the Bureau determines to be appropriate under the balancing test and incorporate these modifications into a legislative rule. The rulemaking will reconsider the determinations reflected in this final policy guidance based upon the Bureau’s experience administering the final policy guidance in 2019 and on a new rulemaking record, including data concerning the privacy risks posed by the disclosure of the HMDA data and the benefits of such disclosure in light of HMDA’s purposes. In developing this final policy guidance, the Bureau consulted with the prudential regulators (the Board, the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), and the Office of the Comptroller of the Currency (OCC)); the Department of Housing and Urban Development (HUD); and the Federal Housing Finance Agency (FHFA). For the reasons described below and in the proposed policy guidance,2 the Bureau is modifying its proposed policy guidance to change the proposed 1 Disclosure of Loan-Level HMDA Data, 82 FR 44586 (Sept. 25, 2017) (hereinafter Proposed Policy Guidance). 2 See id. at 44596–44610. E:\FR\FM\31JAN1.SGM 31JAN1 amozie on DSK3GDR082PROD with NOTICES1 650 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices treatment of the following data fields: (1) The ratio of the applicant’s or borrower’s total monthly debt to the total monthly income relied on in making the credit decision; (2) the number of individual dwelling units related to the property securing the covered loan or, in the case of an application, proposed to secure the covered loan; and (3) the number of individual dwelling units related to the property securing the covered loan or, in the case of an application, proposed to secure the covered loan, that are income-restricted pursuant to Federal, State, or local affordable housing programs. Pursuant to this final policy guidance, the Bureau intends to disclose loanlevel HMDA data reported under Regulation C with the following modifications to the data: First, the Bureau intends to modify the public loan-level HMDA data to exclude: (1) The universal loan identifier or nonuniversal loan identifier; (2) the date the application was received or the date shown on the application form; (3) the date of action taken by the financial institution on a covered loan or application; (4) the address of the property securing the covered loan or, in the case of an application, proposed to secure the covered loan; (5) the credit score or scores relied on in making the credit decision; (6) the unique identifier assigned by the Nationwide Mortgage Licensing System and Registry for the mortgage loan originator; and (7) the result generated by the automated underwriting system used by the financial institution to evaluate the application. The Bureau also intends to exclude free-form text fields used to report the following data: (1) Applicant or borrower race; (2) applicant or borrower ethnicity; (3) the name and version of the credit scoring model used; (4) the principal reason or reasons the financial institution denied the application, if applicable; and (5) the automated underwriting system name. Second, the Bureau intends to modify the public loan-level HMDA data to reduce the precision of most of the values reported for the following data fields. With respect to the amount of the loan or the amount applied for, the Bureau intends to disclose the midpoint for the $10,000 interval into which the reported value falls. The Bureau also intends to indicate whether the reported value exceeds the applicable dollar amount limitation on the original principal obligation in effect at the time of application or origination, as provided under 12 U.S.C. 1717(b)(2) and 12 U.S.C. 1454(a)(2). With respect to the age of an applicant or borrower, the VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 Bureau intends to bin reported values into the following ranges: 25 to 34; 35 to 44; 45 to 54; 55 to 64; and 65 to 74; bottom-code reported values under 25; top-code reported values over 74; and indicate whether the reported value is 62 or higher.3 With respect to the ratio of the applicant’s or borrower’s total monthly debt to the total monthly income relied on in making the credit decision, the Bureau intends to disclose without modification reported values greater than or equal to 36 percent and less than 50 percent. The Bureau also intends to bin reported values into the following ranges: 20 percent to less than 30 percent; 30 percent to less than 36 percent; and 50 percent to less than 60 percent; bottom-code reported values under 20 percent; and top-code reported values of 60 percent or higher. With respect to the value of the property securing the covered loan or, in the case of an application, proposed to secure the covered loan, the Bureau intends to disclose the midpoint for the $10,000 interval into which the reported value falls. With respect to the number of individual dwelling units related to the property securing the covered loan or, in the case of an application, proposed to secure the covered loan, the Bureau intends to bin reported values into the following ranges: 5 to 24; 25 to 49; 50 to 99; 100 to 149; and 150 and over. And with respect to the number of individual dwelling units related to the property securing the covered loan or, in the case of an application, proposed to secure the covered loan, that are incomerestricted pursuant to Federal, State, or local affordable housing programs, the Bureau intends to disclose reported values as a percentage, rounded to the nearest whole number, of the value reported for the total number of individual dwelling units related to the property securing the covered loan. This final policy guidance is exempt from notice and comment rulemaking requirements under the Administrative Procedure Act (APA), 5 U.S.C. 553(b), and is non-binding. As previously noted, the Bureau believes that it is beneficial to commence a separate notice and comment legislative rulemaking under the APA to consider and adopt a more definitive approach to disclosing HMDA data to the public in future years. The Bureau will commence such a rulemaking in May 2019. 3 Binning, sometimes known as recoding or interval recoding, allows data to be shown clustered into ranges rather than as precise values. Top- and bottom-coding mask any value that is above or below a certain threshold. PO 00000 Frm 00005 Fmt 4703 Sfmt 4703 II. Background A. HMDA’s Purposes and the Public Disclosure of HMDA Data HMDA requires certain financial institutions to collect, report, and disclose data about their mortgage lending activity. The home mortgage market is the country’s largest market for consumer financial products and services, with $10 trillion in mortgage debt outstanding.4 Homeownership is a critical source of wealth-building for families and communities. As of 2016, 48 million consumers had a mortgage, representing 64 percent of all owneroccupied homes.5 HMDA is implemented by Regulation C, 12 CFR part 1003. HMDA identifies its purposes as providing the public and public officials with sufficient information to enable them to determine whether financial institutions are serving the housing needs of the communities in which they are located, and to assist public officials in their determination of the distribution of public sector investments in a manner designed to improve the private investment environment.6 In 1989, following amendments to HMDA, the Board recognized a third HMDA purpose of identifying possible discriminatory lending patterns and enforcing antidiscrimination statutes, which now appears with HMDA’s other purposes in Regulation C.7 Today, HMDA data are the preeminent data source that regulators, researchers, economists, industry, and advocates use to achieve HMDA’s purposes and to analyze the mortgage market. Public disclosure of HMDA data is central to the achievement of HMDA’s purposes. Since HMDA’s enactment in 1975, the data that financial institutions are required to disclose under HMDA and Regulation C have been expanded; public access to HMDA data has increased; and the formats in which HMDA data have been disclosed have evolved. As enacted and implemented 4 FRED Economic Data, ‘‘Mortgage Debt Outstanding by Type of Property: One- to FourFamily Residences (MDOTP1T4FR),’’ Fed. Res. Bank of St. Louis, Bd. of Govs. of the Fed. Res. Sys., https://fred.stlouisfed.org/series/MDOTP1T4FR (last updated Sept. 24, 2018). 5 U.S. Census Bureau, ‘‘Selected Housing Characteristics: 2012–2016 American Community Survey 5-Year Estimates,’’ https:// factfinder.census.gov/bkmk/table/1.0/en/ACS/16_ 5YR/DP04/0100000US (last visited Dec. 3, 2018). 6 12 U.S.C. 2801(b). 7 See Home Mortgage Disclosure, 54 FR 51356, 51357 (Dec. 15, 1989) (recognizing the purpose of identifying possible discriminatory lending patterns and enforcing antidiscrimination statutes in light of the 1989 amendments to HMDA, which mandated the reporting of the race, sex, and income of loan applicants). E:\FR\FM\31JAN1.SGM 31JAN1 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices amozie on DSK3GDR082PROD with NOTICES1 in Regulation C, HMDA required covered financial institutions to make available to the public at their home and branch offices a ‘‘disclosure statement’’ reflecting aggregates of certain mortgage loan data.8 In 1980, Congress amended HMDA section 304 to require that the Federal Financial Institutions Examination Council (FFIEC) implement a system to increase public access to the data required to be disclosed under the statute, including a ‘‘central depository of data’’ in each metropolitan statistical area (MSA). The 1980 HMDA amendments also required the FFIEC to compile annually, for each MSA, aggregate data by census tract for all financial institutions required to disclose data under HMDA. The 1980 amendments further required the FFIEC to produce tables indicating, for each MSA, aggregate lending patterns for various categories of census tracts grouped according to location, age of housing stock, income level, and racial characteristics.9 In 1989, Congress amended HMDA to require that financial institutions collect, report, and disclose data concerning the race, sex, and income of applicants and borrowers, as well as data on loan applications, in addition to originations and purchases.10 In implementing these amendments in Regulation C, the Board required financial institutions to report HMDA data to Federal regulators on a loan-byloan and application-by-application basis using the ‘‘loan/application register’’ format.11 In 1990, the FFIEC issued a notice announcing that it would make all reported HMDA data available to the public in a loan-level format, after deleting three fields to protect applicant and borrower privacy: application or loan number, application date, and action taken date.12 The FFIEC stated that it believed public disclosure of the reported loan-level HMDA data to be ‘‘consistent with the congressional intent to maximize the utilization of lending data.’’ 13 The FFIEC first 8 Home Mortgage Disclosure Act of 1975, Public Law 94–200, section 304, 89 Stat. 1124, 1125–28 (Dec. 31, 1975); 12 CFR 203.5(a)(1) (effective June 28, 1976). 9 Housing and Community Development Act of 1980, Public Law 96–399, section 340, 94 Stat. 1614, 1657–59 (1980). 10 Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), Public Law 101–73, section 1211, 103 Stat. 183, 524–26 (1989). 11 54 FR 51356, 51361 (Dec. 15, 1989). 12 Home Mortgage Disclosure Act; Disclosure Statements and Aggregate MSA Reports; Availability of Data, 55 FR 27886, 27888 (July 6, 1990). 13 Id. VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 disclosed the reported loan-level HMDA data to the public in October 1991. In 1992, Congress amended HMDA to add section 304(j), which required that each financial institution make available to the public its ‘‘loan application register information’’ for each year as early as March 31 of the succeeding year, as required under regulations prescribed by the Board.14 The Board implemented this amendment by requiring that financial institutions make their ‘‘modified’’ loan/application registers available to the public after deleting the same three fields deleted from the loan-level HMDA data disclosed by the FFIEC.15 B. The Dodd-Frank Act and Amendments to HMDA and Regulation C In 2010, the Dodd-Frank Act amended HMDA and transferred HMDA rulemaking authority and other functions from the Board to the Bureau.16 Among other changes, the Dodd-Frank Act expanded the scope of information relating to mortgage applications and loans that must be collected, reported, and disclosed under HMDA and authorized the Bureau to require by rule financial institutions to collect, report, and disclose additional information. The Dodd-Frank Act amendments to HMDA also added new section 304(h)(1)(E), which directs the Bureau to develop regulations, in consultation with the agencies identified in section 304(h)(2),17 that ‘‘modify or require modification of itemized information, for the purpose of protecting the privacy interests of the mortgage applicants or mortgagors, that is or will be available to the public.’’ Section 304(h)(3)(B), also added by the Dodd-Frank Act, directs the Bureau to ‘‘prescribe standards for any modification under paragraph (1)(E) to effectuate the purposes of [HMDA], in light of the privacy interests of mortgage applicants or mortgagors. Where necessary to protect the privacy interests of mortgage applicants or mortgagors, the Bureau shall provide for the disclosure of information . . . in aggregate or other reasonably modified 14 Housing and Community Development Act, Public Law 102–550, section 932, 106 Stat. 3672, 3889–91 (1992). 15 12 CFR 203.5(a)–(e) (effective Mar. 1, 1993). 16 Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111–203, 124 Stat. 1376, 1980, 2035–38, 2097–2101 (2010). 17 These agencies are the prudential regulators— the Board, the FDIC, the NCUA, and the OCC—and HUD. Together with the Bureau, these agencies are referred to herein as ‘‘the agencies.’’ PO 00000 Frm 00006 Fmt 4703 Sfmt 4703 651 form, in order to effectuate the purposes of [HMDA].’’ 18 On October 28, 2015, the Bureau published the 2015 HMDA Final Rule to implement the Dodd-Frank Act amendments and make other changes, including adding a number of new data points.19 Most provisions of the 2015 HMDA Final Rule took effect on January 1, 2018, and apply to data financial institutions collect beginning in 2018 and report beginning in 2019. The 2015 HMDA Final Rule addressed the public disclosure of HMDA data in two ways. First, the 2015 HMDA Final Rule shifted public disclosure of HMDA data entirely to the agencies. Beginning with HMDA data compiled in 2017, financial institutions were no longer required to provide their modified loan/application registers and disclosure statements directly to the public. Instead, they were required only to provide a notice advising members of the public seeking their data that the data may be obtained on the Bureau’s website. In addition to reducing burden on financial institutions, this shift of responsibility to the agencies eliminated risks to financial institutions associated with errors in preparing their modified loan/ application registers that could result in the unintended disclosure of data. This shift of responsibility also permitted the Bureau to consider modifications to protect applicant and borrower privacy that preserve data utility but that may be burdensome for financial institutions to implement. Finally, this shift of responsibility allowed for easier adjustment of modifications as privacy risks and potential uses of HMDA data evolve. Second, the Bureau interpreted HMDA, as amended by the Dodd-Frank Act, to require that the Bureau use a balancing test to determine whether and how HMDA data should be modified prior to its disclosure to the public to protect applicant and borrower privacy while also fulfilling HMDA’s public disclosure purposes. The Bureau interpreted HMDA to require that public HMDA data be modified when the release of the unmodified data creates risks to applicant and borrower privacy 18 Section 304(h)(3)(A) provides that a modification under section 304(h)(1)(E) shall apply to information concerning ‘‘(i) credit score data . . . in a manner that is consistent with the purpose described in paragraph (1)(E); and (ii) age or any other category of data described in paragraph (5) or (6) of subsection (b), as the Bureau determines to be necessary to satisfy the purpose described in paragraph (1)(E), and in a manner consistent with that purpose.’’ 12 U.S.C. 2803(h)(3)(A). 19 Home Mortgage Disclosure (Regulation C), 80 FR 66128 (Oct. 28, 2015); see also Home Mortgage Disclosure (Regulation C), 80 FR 69567 (Nov. 10, 2015) (making technical corrections). E:\FR\FM\31JAN1.SGM 31JAN1 652 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices interests that are not justified by the benefits of such release to the public in light of HMDA’s statutory purposes.20 The 2015 HMDA Final Rule’s interpretation of HMDA section 304(h)(1)(E) and 304(h)(3)(B) to require a balancing test imposed binding obligations on the Bureau to evaluate the HMDA data, individually and in combination, to assess whether and how HMDA data should be modified prior to its disclosure to the public to protect applicant and borrower privacy while also fulfilling HMDA’s public disclosure purposes. On September 25, 2017, the Bureau published proposed policy guidance that described the Bureau’s balancing test and how the Bureau proposed to apply it to the loan-level HMDA data made available to the public beginning in 2019, with respect to data compiled by lenders in or after 2018.21 On May 24, 2018, the President signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), which amended HMDA by adding partial exemptions from HMDA’s data collection and reporting requirements for certain insured depository institutions and insured credit unions.22 On September 7, 2018, the Bureau published an interpretive and procedural rule to implement and clarify the EGRRCPA’s requirements (2018 HMDA Final Rule).23 Among other things, the Bureau clarified that institutions covered by a partial exemption have the option of reporting exempt data points as long as they report all data fields that the specific data point comprises. The Bureau also clarified which of the data points in Regulation C are covered by the partial exemptions.24 The partial exemptions 20 80 FR 66128, 66134 (Oct. 28, 2015). 82 FR 44586 (Sept. 25, 2017). 22 Economic Growth, Regulatory Relief, and Consumer Protection Act, Public Law 115–174, section 104(a), 132 Stat. 1296 (2018). The EGRRCPA provided, among other things, that the requirements of HMDA section 304(b)(5) and (6) (which requires collection and reporting of certain data points and provides the Bureau discretion to require additional data points) shall not apply to closed-end mortgage loans of an insured depository institution or insured credit union if the institution originated fewer than 500 closed-end mortgage loans in each of the two preceding calendar years. The EGRRCPA also included a similar exemption with respect to open-end lines of credit. 23 Partial Exemptions from the Requirements of the Home Mortgage Disclosure Act Under the Economic Growth, Regulatory Relief, and Consumer Protection Act (Regulation C), 83 FR 45325 (Sept. 7, 2018). 24 The Bureau interpreted the partial exemption to cover 26 of the 48 HMDA data points, including 12 data points that the Bureau added to Regulation C in the 2015 HMDA Final Rule to implement data points specifically identified in HMDA section amozie on DSK3GDR082PROD with NOTICES1 21 See VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 apply beginning with the 2018 HMDA data, which institutions must report to the Bureau by March 1, 2019. III. The Balancing Test As noted above, in the 2015 HMDA Final Rule, the Bureau interpreted HMDA to require that public HMDA data be modified when the disclosure of the unmodified data creates risks to applicant and borrower privacy interests that are not justified by the benefits of such disclosure to the public in light of HMDA’s purposes. The Bureau included in the proposed policy guidance a detailed description of the balancing test and its proposed application, including the benefits of public disclosure, the risks to applicant and borrower privacy that may be created by public disclosure, and the Bureau’s approach to balancing these benefits and risks, including through modifying some of the data to be disclosed. As described in more detail in the proposal,25 under the balancing test, the disclosure of the loan-level HMDA dataset creates risks to applicant and borrower privacy interests only where: (1) At least one data field or a combination of data fields substantially facilitates the identification of an applicant or borrower, and (2) at least one data field or combination of data fields discloses information about the applicant or borrower that is not otherwise public and may be harmful or sensitive. At the individual data field level, a field may create ‘‘reidentification risk’’ by substantially facilitating the identification of an applicant or borrower in the HMDA data (for example, because it may be used to match a HMDA record to an identified record), or may create ‘‘risk of harm or sensitivity’’ by disclosing information about the applicant or borrower that is not otherwise public and may be harmful or sensitive.26 Where the public disclosure of the unmodified loan-level HMDA dataset would create risks to applicant and borrower privacy, the balancing test requires that the Bureau consider the benefits of disclosure to HMDA’s purposes and, where these benefits do not justify the privacy risks the disclosure would create, modify the dataset to appropriately balance the privacy risks and disclosure benefits. An individual data field is a candidate 304(b)(5)(A) through (C) or (b)(6)(A) through (I), and 14 data points that were not found in Regulation C prior to the Dodd-Frank Act and that the Bureau required in the 2015 HMDA Final Rule pursuant to its discretionary authority under HMDA sections 304(b)(5)(D) and (b)(6)(J). 25 See 82 FR 44586, 44590 (Sept. 25, 2017). 26 See id. at 44592–95. PO 00000 Frm 00007 Fmt 4703 Sfmt 4703 for potential modification under the balancing test if its disclosure in unmodified form would create a risk of re-identification or a risk of harm or sensitivity. The Bureau explained in the proposal that, with respect to the HMDA data that financial institutions will report to the agencies under the 2015 HMDA Final Rule, it initially determined public disclosure of the unmodified loan-level dataset, as a whole, would create risks to applicant and borrower privacy interests. The Bureau stated that this was due to the presence in the dataset of individual data fields that the Bureau believed would create re-identification risk and the presence of individual data fields that the Bureau believed are not currently public and would create a risk of harm or sensitivity. The Bureau thus applied the balancing test to determine whether and how it should modify the HMDA data financial institutions must collect and report under the 2015 HMDA Final Rule before it is disclosed to the public. Based on its analysis, the Bureau initially determined it would have to modify the loan-level HMDA data before it disclosed that data to the public. The Bureau also stated it initially determined the modifications to the loan-level HMDA dataset proposed in the proposed policy guidance would reduce risks to applicant and borrower privacy and appropriately balance them with the benefits of disclosure for HMDA’s purposes. For the reasons described below and in the proposed policy guidance,27 the Bureau is modifying its proposed policy guidance to change the proposed treatment of the following data fields: (1) The ratio of the applicant’s or borrower’s total monthly debt to the total monthly income relied on in making the credit decision (debt-toincome ratio); (2) the number of individual dwelling units related to the property securing the covered loan or, in the case of an application, proposed to secure the covered loan (total units); and (3) the number of individual dwelling units related to the property securing the covered loan or, in the case of an application, proposed to secure the covered loan, that are incomerestricted pursuant to Federal, State, or local affordable housing programs (affordable units). The Bureau determines that public disclosure of the unmodified loan-level dataset, as a whole, would create risks to applicant and borrower privacy interests and that the loan-level HMDA data must be modified before the data is disclosed to 27 See E:\FR\FM\31JAN1.SGM id. at 44596–44610. 31JAN1 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices the public. The Bureau further determines, based on the information currently available to it, that the modifications described in this final policy guidance will reduce risks to applicant and borrower privacy and appropriately balance them with the benefits of disclosure in light of HMDA’s purposes. This final policy guidance describes the data the Bureau intends to disclose on each financial institution’s modified loan/application register as well as in the combined loanlevel data the agencies make available to the public each year.28 IV. Comments Received and the Bureau’s Responses The Bureau received 26 comments on the proposed policy guidance. These included general comments on the Bureau’s proposal; views on the proposed treatment of particular data fields; and comments on other topics. The majority of the comments received did not address how the Bureau should treat specific data fields, and many comments opposing or expressing concern with the Bureau’s proposal did not provide any evidence or analysis in support of their positions. A. General Comments Concerning the Application of the Balancing Test to Loan-Level HMDA Data Comments Received amozie on DSK3GDR082PROD with NOTICES1 Several industry commenters generally stated that the Bureau’s proposal did not sufficiently address the privacy risks posed by the disclosure of HMDA data, but many of these commenters offered little evidence or analysis to support their views or specific suggestions to address their concerns. A few industry commenters stated that the HMDA data the Bureau proposed to disclose would be highly re-identifiable. They also stated that the new data fields required under the 2015 HMDA Final Rule increased this reidentification risk compared to the data publicly disclosed under the disclosure regime adopted by the Board in implementing the 1992 amendments to HMDA (the Board’s disclosure 28 As described below in part IV.B and C, the Bureau will not include on the modified loan/ application registers (1) an indication of whether the reported loan amount exceeds the applicable dollar amount limitation on the original principal obligation in effect at the time of application or origination as provided under 12 U.S.C. 1717(b)(2) and 12 U.S.C. 1454(a)(2) or (2) information about the MSA or Metropolitan Division in which the property securing or proposed to secure the loan is located. This information will be included in the annual loan-level disclosure of all reported HMDA data combined. VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 regime).29 A group of industry commenters stated that over 80 percent of loans publicly disclosed under the Board’s disclosure regime could be reidentified and that the addition of the new data fields increases the possibility of re-identification to ‘‘virtually 100%.’’ 30 These commenters also suggested that the amount of HMDA data the Bureau proposed to disclose would create incentives to re-identify the data. Several industry commenters stated that technological advances increase the ease with which public HMDA data can be re-identified. One industry commenter stated that the Bureau had underestimated adversaries’ 31 motives to re-identify the HMDA data and that the Bureau’s proposal downplayed the risk that an adversary with personal knowledge of an applicant or borrower would reidentify the applicant or borrower in the HMDA data. A few industry commenters also expressed general concern that, if the HMDA data were re-identified, the data could be used to target what one described as ‘‘predatory’’ marketing to applicants and borrowers and to commit financial fraud and identity theft. Two industry commenters suggested that these risks were posed by the data disclosed under the Board’s disclosure regime but that the Bureau’s proposed disclosure of the new data fields required by the 2015 HMDA Final Rule increased these risks. One industry commenter stated that data the Bureau 29 12 CFR 203.5(c) (effective Mar. 1, 1993) (identifying the data a financial institution must delete from its modified loan/application register prior to making it available to the public). 30 These commenters cited a 2017 research paper in support of their statement that attaching a borrower’s name and address to a HMDA record can be achieved in over 80 percent of cases. See Anthony Yezer, ‘‘Personal Privacy of HMDA in a World of Big Data,’’ at 4 (Geo. Wash. U., Inst. for Int’l Econ. Policy, Working Paper No. IIEP–WP– 2017–21, 2017). In this paper, the author states that, in a particular census tract that he identified as presenting low re-identification risk compared to others in the same county, he was able to re-identify 72 percent of borrowers with loans by the same lender by matching the 2014 public HMDA data to public records. Id. at 14–16. He also describes several projects in which academic and government researchers matched HMDA data to other data sources—some to private datasets, others to public records—and achieved up to a 75 percent match rate. Id. at 11–14. It is unclear which research supports the author’s claim that re-identification of HMDA data disclosed under the Board’s disclosure regime ‘‘can be achieved in over 80% of cases.’’ Id. at 3. 31 The Bureau used the term ‘‘adversary’’ in the proposed policy guidance to refer to persons that may attempt to re-identify the HMDA data. See, e.g., Nat’l Inst. of Standards & Tech., ‘‘De-Identification of Personal Information (2015),’’ available at http:// nvlpubs.nist.gov/nistpubs/ir/2015/NIST.IR.8053.pdf (using ‘‘adversary’’ to refer to an entity attempting to re-identify data). PO 00000 Frm 00008 Fmt 4703 Sfmt 4703 653 proposed to disclose could be used for social engineering attacks, such as an adversary posing as a borrower’s lender. The commenter also stated that disclosure could undermine lenders’ use of fraud detection measures such as authentication questions that rely on a customer’s personal knowledge of her financial information. The commenter also stated that data the Bureau proposed to disclose could be used to identify a vacation home for purposes of theft or adverse possession. A group of industry commenters stated that data the Bureau proposed to disclose could be used by an adversary to target older borrowers in particular, and also would allow the public to form a very accurate estimate of consumers’ creditworthiness. A few industry commenters expressed general concern that the Bureau proposed to disclose data consumers would consider sensitive or would like or expect to remain private. One industry commenter suggested that lenders would be subject to ‘‘increased litigation’’ if HMDA data disclosed by the Bureau were used for criminal purposes. With respect to disclosure benefits, a few industry commenters stated that public disclosure of the HMDA data, and in particular the new data required to be reported under the 2015 HMDA Final Rule, would not further HMDA’s purposes. One industry commenter suggested that regulator access to HMDA data alone would be sufficient to accomplish HMDA’s goals. This commenter and another industry commenter also stated that the data disclosed to the public under the Board’s disclosure regime are sufficient to allow the public to achieve HMDA’s goals. Another industry commenter suggested that the Bureau should publicly disclose limited data at first, and then later determine whether the information disclosed is sufficient to allow the public to achieve HMDA’s purposes. None of these commenters specifically addressed the benefits of the data’s public disclosure to HMDA’s purposes identified in the proposal. Two industry commenters addressed the balancing of privacy risks and disclosure benefits. One industry commenter stated that if there is ‘‘any chance’’ that HMDA data could be used for criminal purposes, the benefits of disclosure could not outweigh the privacy risks created by disclosure. Another industry commenter suggested that the balancing test requires the Bureau to modify the data to the point that re-identification risk is ‘‘remote,’’ although the commenter did not elaborate on what that term means or E:\FR\FM\31JAN1.SGM 31JAN1 amozie on DSK3GDR082PROD with NOTICES1 654 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices what would need to be shown to meet it. A few industry commenters recommended that the Bureau disclose the new data required under the 2015 HMDA Final Rule only in aggregate form, and one industry commenter stated that the Bureau should not disclose the new data to the public at all. Another industry commenter suggested that the Bureau disclose all HMDA data, including data publicly disclosed under the Board’s disclosure regime, in aggregate form only. Several commenters generally supported the Bureau’s proposal. These commenters generally agreed with the Bureau’s assessment and proposed balancing of privacy risks and disclosure benefits, although almost all of these commenters disagreed with the proposal’s treatment of a few specific fields and advocated for greater disclosure, as discussed below in part IV.B. A group of consumer advocate commenters emphasized that loan-level HMDA data have long been publicly disclosed without any evidence the data has been used to harm applicants and borrowers. These commenters asserted that industry commenters’ claims about re-identification risk failed to account for the Bureau’s proposed modifications and stated that the HMDA data the Bureau proposed to disclose would be unlikely to be used to engage in identity theft. These commenters also provided detailed descriptions of the benefits of public disclosure of HMDA data to HMDA’s purposes. An industry commenter described HMDA data as a critical source of information for the public to understand the mortgage market and to analyze the impact of public policies on communities and borrowers. This industry commenter supported the expansion of the data under the 2015 HMDA Final Rule and the Bureau’s proposal to disclose much of the new data. Another industry commenter similarly stated that much of the new data required to be reported under the 2015 HMDA Final Rule is vital to accurate and complete fair lending analyses and to understanding the housing needs of communities. An individual commenter also expressed support for the public availability of HMDA data, noting in particular the usefulness of the data to identify what the commenter described as ‘‘predatory’’ lending. Bureau Response For the reasons described below, the Bureau determines that none of the general comments it received provide a sufficient basis to make changes to the proposed policy guidance. On the other VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 hand, as explained below in part IV.B, the Bureau determines that some specific comments it received about particular data fields provide an adequate basis to make changes to the proposed treatment of these fields. HMDA is a disclosure statute; public disclosure of HMDA data is central to the achievement of HMDA’s goals.32 The Bureau acknowledges, as it did in the proposal, that the modifications it intends to apply to the loan-level HMDA data disclosed to the public will not completely eliminate privacy risks. Nevertheless, the Bureau determines that, to the extent disclosure creates risks to applicant and borrower privacy, such risks are justified by the benefits of such release to the public in light of HMDA’s purposes. The public loan-level HMDA data have always displayed a high level of record uniqueness and included fields that are also found in identified public records.33 The Bureau believes that some degree of re-identification risk in connection with the public disclosure of the data is acceptable because HMDA requires the Bureau to consider not only the risk posed by disclosure, but also the benefits of disclosure to HMDA’s purposes. The Bureau does not believe that HMDA permits it to modify data based solely on the existence of a 32 See 12 U.S.C. 2801(b) (‘‘The purpose of this chapter is to provide the citizens and public officials of the United States with sufficient information’’ to enable them to determine whether depository institutions are filling their obligations to serve the housing needs of the communities and neighborhoods in which they are located and to assist public officials in their determination of the distribution of public sector investments in a manner designed to improve the private investment environment) (emphasis added); 12 CFR 1003.1 (‘‘This part implements the Home Mortgage Disclosure Act, which is intended to provide the public with loan data that can be used:’’ to help determine whether financial institutions are serving the housing needs of their communities; to assist public officials in distributing public-sector investment so as to attract private investment to areas where it is needed; and to assist in identifying possible discriminatory lending patterns and enforcing antidiscrimination statutes) (emphasis added). 33 In 2005, researchers at the Board found that ‘‘[m]ore than 90 percent of the loan records in a given year’s HMDA data are unique—that is, an individual lender reported only one loan in a given census tract for a specific loan amount.’’ Robert B. Avery et al., ‘‘New Information Reported under HMDA and Its Application in Fair Lending Enforcement,’’ at 367, Fed. Res. Bull. (Summer 2005), available at http://www.federalreserve.gov/ pubs/bulletin/2005/3-05hmda.pdf. In the 2017 paper cited by a group of industry commenters, the author described the high record uniqueness observed in the 2014 public HMDA data for a particular county and stated that, in a census tract that he identified as presenting low re-identification risk compared to others in the county, he was able to re-identify 72 percent of borrowers with loans by the same lender by matching the public HMDA data to public records. See Yezer, supra note 30, at 14– 16. PO 00000 Frm 00009 Fmt 4703 Sfmt 4703 ‘‘chance’’ that HMDA data could be used for harmful purposes, as suggested by one industry commenter, without considering such risk in light of the benefits of disclosure to HMDA’s purposes. Similarly, the Bureau believes it would be inconsistent with HMDA to modify the public data to the point that re-identification risk is ‘‘remote,’’ as suggested by another industry commenter, instead of to the point that any privacy risk created by the disclosure is justified by the benefits of the data to HMDA’s purposes. Under the final policy guidance, the Bureau intends to modify every new field required under the 2015 HMDA Final Rule that it has identified as likely to substantially facilitate the reidentification of an applicant or borrower. The Bureau is also making changes to the proposal concerning specific data fields where commenters pointed out that the proposal would have left unmodified data that would substantially facilitate re-identification. Further, the Bureau intends to significantly reduce the precision of loan amount in the public data.34 Loan amount is a field that was required to be reported prior to the 2015 HMDA Final Rule and that the Bureau believes to be a significant contributor to reidentification risk in the HMDA data. The Bureau has carefully considered the risk that a potential adversary, such as an applicant’s or borrower’s neighbor or acquaintance, may be able to reidentify the HMDA data by relying on personal knowledge about the applicant or borrower. As discussed in more detail in the proposal,35 although the Bureau believes that location and demographic information may be more likely to be known than other information in the HMDA data, it is impossible to determine the exact content of any preexisting personal knowledge such a potential adversary may possess. None of the comments provided any basis for the Bureau to make reliable predictions as to what this knowledge would be. 34 Prior to the 2015 HMDA Final Rule, loan amount was reported rounded to the nearest thousand. Under the Board’s disclosure regime, this field was disclosed to the public without modification. Consistent with its proposal and as discussed in part IV.B below, under the final policy guidance the Bureau intends to disclose loan amount binned in $10,000 intervals. 35 See 82 FR 44586, 44594 (Sept. 25, 2017). The Bureau noted that, to the extent that disclosure of census tract and demographic information such as ethnicity and race would create risk to applicant and borrower privacy, it believed the risks would be justified by the benefits of disclosure. Id. at 44598. As discussed in part IV.B, two industry commenters opposed the proposal to disclose without modification census tract. No commenter opposed the proposal to disclose without modification race and ethnicity. E:\FR\FM\31JAN1.SGM 31JAN1 amozie on DSK3GDR082PROD with NOTICES1 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices This uncertainty creates challenges for evaluating the degree to which individual data fields contribute to the risk of re-identification by such a potential adversary. The Bureau initially determined that, because the preexisting personal knowledge possessed by such a potential adversary is typically limited to information about a single individual, or a small number of individuals, any re-identification attempt by such a potential adversary would likely target or affect a limited number of individuals.36 No commenter disputed this statement, much less rebutted it with data or analysis. The Bureau concludes, based on the information currently available to it, that the HMDA data it intends to disclose under this final policy guidance will be of minimal value to an adversary seeking to perpetrate identity theft or financial fraud against applicants and borrowers or to engage in other unlawful conduct.37 Specifically, as noted in the proposal, the HMDA data do not include information typically required to open new accounts in a consumer’s name, such as Social Security number, date of birth, place of birth, passport number, or driver’s license number, nor do they include information useful to perpetrate existing account fraud, such as account numbers or passwords. Although an adversary might try to use almost any information relating to an individual to steal her identity or commit fraud against her, the Bureau concludes that disclosure of HMDA data would be unlikely to increase the information already publicly available that an adversary could exploit for these purposes. For example, the public HMDA data will include the name of the financial institution and other details about the loan terms that could be used in a social engineering attack against a borrower by a perpetrator pretending to be the financial institution or against a financial institution by a perpetrator pretending to be the borrower. However, these and other data that could be used for this purpose are often already publicly available—in identified form— in real estate transaction records. The Bureau determines that an individual seeking to rob or adversely possess a property would be unlikely to undertake the effort required to reidentify public HMDA data to determine whether such a property is a vacation home, as suggested by an industry 36 Id. at 44594. as noted in the proposal, the Bureau believes that the data would be of minimal use for such purposes even without modification. Id. at 44595. 37 Indeed, VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 commenter. With respect to the industry commenter that expressed concern that lenders would be subject to increased litigation in the event public HMDA data was used for criminal purposes, as noted above, the Bureau concludes that it is unlikely the public HMDA data would be used for criminal purposes. Even if the data were used for such purposes, the Bureau is unable to identify a basis for lender liability under such a circumstance, and the commenter did not describe how such increased litigation would arise. The Bureau acknowledges that, if the public HMDA data were re-identified, that is, if an adversary were to link an identified individual to his or her HMDA data, certain fields would reveal information about an applicant’s or borrower’s creditworthiness. However, information about applicant and borrower creditworthiness is important to HMDA’s purposes. For example, this information assists in identifying possible discriminatory lending patterns by helping ensure that users are comparing applicants and borrowers with similar profiles, thereby controlling for factors that might provide non-discriminatory explanations for disparities in credit and pricing decisions. As explained below, despite the opposition of many commenters, the Bureau is issuing final policy guidance that excludes from the public HMDA data credit score, which is the field that would reveal the most about an applicant’s or borrower’s creditworthiness. The Bureau described and analyzed potential adversaries’ incentives to reidentify public HMDA data in the proposed policy guidance.38 Even though some adversaries may have such incentives and loan-level HMDA data has been made available to the public since 1991, the Bureau is unaware of any instances of re-identification of the data for harmful purposes. Commenters provided no evidence of such reidentification. In the 2017 paper cited by a group of industry commenters, the author states that, using the 2014 public HMDA data, he re-identified 72 percent of borrowers with loans by the same lender in a particular census tract by matching the data to public records, but it appears that this exercise was undertaken solely to demonstrate that such matching can be done.39 Also in this paper, the author points to several projects in which academic and government researchers matched HMDA data to other data sources—some to private datasets, others to public 38 See id. at 44593–95. supra note 30, at 14–16. 39 Yezer, PO 00000 Frm 00010 Fmt 4703 Sfmt 4703 655 records—for purposes of research related to mortgage lending.40 It is not clear from several of the resulting papers whether the researchers used public HMDA data to perform the matching (at least one appears to have relied on nonpublic HMDA data), but, in any event, it appears that in none of these instances were the HMDA data matched to other data sources for purposes of re-identifying borrowers, let alone for purposes of harming consumers. The Bureau concludes the modifications it intends to apply to the public HMDA data under the final policy guidance will minimize the attractiveness of the HMDA data for harmful purposes, and so will reduce any incentives for adversaries to reidentify the data.41 In 2015, the Bureau determined that public disclosure of the new HMDA data required under the 2015 HMDA Final Rule would further the purposes of HMDA. As noted above, the statute and Regulation C are clear that HMDA’s purpose is the provision of data to the public and public officials in furtherance of HMDA’s goals. Congress itself determined that many of the new data should be collected and reported to further HMDA’s purposes, and the Bureau determined in the rulemaking resulting in the 2015 HMDA Final Rule that each of the new HMDA data fields it added using its discretionary authority furthers HMDA’s goals. Several commenters described how the new HMDA data furthers HMDA’s purposes, and no commenters provided analysis or data to support the general statement made by a few commenters that the public disclosure of HMDA data does not further the statute’s purposes. For purposes of this final policy guidance, the Bureau takes as given the determinations made in the 2015 HMDA Final Rule, but the Bureau has stated that it may reconsider these determinations with respect to some or all of the discretionary fields through a new legislative rulemaking. Finally, the Bureau declines to exclude from the public data or disclose only in aggregate form all HMDA data or all new data required to be reported under the 2015 HMDA Final Rule, as suggested by several commenters. As noted, HMDA is a disclosure statute. It requires that HMDA data is made 40 Id. at 11–14. example, the Bureau believes that low credit scores and high debt-to-income ratios may provide information about a borrower’s financial condition that may suggest vulnerability to scams relating to debt relief or credit repair. The final policy guidance will exclude credit score from the public HMDA data and will top-code debt-toincome ratio to protect very high ratios. 41 For E:\FR\FM\31JAN1.SGM 31JAN1 656 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices available to the public except as the Bureau determines necessary to protect applicant and borrower privacy interests. The Bureau interprets its obligation under the statute to permit modification of the data made available to the public only where the privacy risk such disclosure would pose would not be justified by the benefits of such disclosure in light of HMDA’s purposes. Under the balancing test, excluding from public disclosure or disclosing only in aggregate form all HMDA data or all new HMDA data would require the Bureau to determine that the loanlevel disclosure of each individual data field creates privacy risks that are not justified by the benefits of disclosure to HMDA’s purposes and that the only modification available to appropriately balance the risks and benefits is exclusion from the public data. However, for the reasons discussed in the proposal,42 the Bureau determines that most of the HMDA data create low, if any, privacy risk—they neither substantially facilitate re-identification nor do they create a risk of harm or sensitivity—and that any risks are justified by the benefits in light of HMDA’s purposes. Except with respect to total units and affordable units, discussed below in part IV.B, none of the comments provided any information that casts doubt on this conclusion. Therefore, the Bureau concludes that excluding all HMDA data or all new HMDA data would be inconsistent with the statute and the balancing test, which the Bureau has by law bound itself to use to make disclosure determinations. B. Comments Concerning the Proposed Treatment of Specific Data Fields Under the Balancing Test amozie on DSK3GDR082PROD with NOTICES1 Data To Be Disclosed Without Modification The Bureau proposed to publicly disclose the following data fields as reported, without modification: 43 • The following information about applicants, borrowers, and the underwriting process: Income, sex, race, ethnicity, name and version of the credit scoring model, reasons for denial, and automated underwriting system (AUS) name.44 • The following information about the property securing the loan: State, county, census tract, occupancy type, construction method, manufactured 42 See 82 FR 44586, 44597–98 (Sept. 25, 2017). at 44597–99. 44 Note that, as discussed below, the Bureau proposed to exclude free-form text fields used to report certain data for the following data fields: ethnicity, race, name and version of the credit scoring model, reasons for denial, and AUS name. Id. at 44609–10. 43 Id. VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 housing secured property type, manufactured housing land property interest, total units, and affordable units. • The following information about the application or loan: Loan term, loan type, loan purpose, whether the application was submitted directly to the financial institution, whether the loan was initially payable to the financial institution, whether a preapproval was requested, action taken, type of purchaser, lien status, prepayment penalty term, introductory rate period, interest rate, rate spread, total loan costs or total points and fees, origination charges, total discount points, lender credits, whether the loan was a high-cost mortgage under the Home Ownership and Equity Protection Act (HOEPA), balloon payment, interest-only payment, negative amortization, other non-amortizing features, combined loan-to-value ratio, open-end line of credit flag, business or commercial purpose flag, and reverse mortgage flag. • The following information about the lender: Legal Entity Identifier (LEI) and financial institution name.45 The data fields above that were required to be reported under Regulation C prior to the 2015 HMDA Final Rule were disclosed to the public without modification under the Board’s disclosure regime. The Bureau’s continued disclosure of these data fields thus is consistent with the government’s longstanding approach. With the exception of LEI, financial institution name, action taken, reasons for denial, census tract, and income, each of which is discussed further below, the Bureau initially determined that disclosing the data listed above in the loan-level HMDA data released to the public would likely present low risk to applicant and borrower privacy. The Bureau also stated that, to the extent that disclosure of these fields would create risk to applicant or borrower privacy, the Bureau believed the risks would be justified by the benefits of disclosure in light of HMDA’s purposes.46 45 See 12 CFR 1003.4(a)(2)–(7), (a)(8)(i), (a)(9)(ii), (a)(10)(i), (a)(10)(iii), (a)(11)–(14), (a)(15)(i) (name and version of credit scoring model), (a)(16)–(22), (a)(24)–(27), (a)(29)–(33), (a)(35)(i) (AUS name), (a)(36)–(38). 46 82 FR 44586, 44598 (Sept. 25, 2017) (describing the utility of these data fields in light of HMDA’s purposes: helping the public and public officials to determine whether financial institutions are serving the housing needs of their communities, to distribute public-sector investment so as to attract private investment to areas where it is needed, and to identify possible discriminatory lending patterns and enforce antidiscrimination statutes). PO 00000 Frm 00011 Fmt 4703 Sfmt 4703 An industry commenter and a group of consumer advocate commenters supported the Bureau’s proposal to disclose without modification the fields the Bureau identified as likely to create low privacy risk. The industry commenter stated these data fields would provide valuable information about the mortgage market that is not available from any other source. The consumer advocate commenters stated that data fields relating to pricing— including the fields for interest rate, rate spread, total loan costs or total points and fees, origination charges, and discount points—would help data users identify potentially discriminatory price disparities within the prime and subprime mortgage markets. These commenters also stated that the data fields related to loan terms and conditions—such as the term of any prepayment penalty, the length of any introductory rate period, and whether the contractual terms include nonamortizing features such as a balloon payment—would serve as an earlywarning system, enabling community organizations and government agencies to assess the prevalence of unfair, deceptive, and unaffordable lending. These commenters additionally supported the Bureau’s proposal to disclose new race and ethnicity subcategories for Asian and Hispanic loan applicants. In their view, disclosure of these subcategories would help data users identify ‘‘discrimination and targeting’’ with greater precision and would promote responsible lending in all communities. These commenters also stated that disclosure of new data fields on manufactured housing would provide important information about the manufactured home market, including any issues of concern related to affordability, sustainability, or fair lending. Another consumer advocate commenter supported the Bureau’s proposal to disclose whether the property is or will be used by the applicant or borrower as a principal residence, a second residence, or an investment property. Except for total units and affordable units, the Bureau intends to disclose without modification the data fields the Bureau identified in the proposal as likely presenting low risk to applicant and borrower privacy, as proposed. For the reasons discussed above and in the proposal, the Bureau determines, based on the information currently available to it, that disclosing these data fields as reported appropriately balances the privacy risks that may be created by such disclosure and the benefits of such disclosure in light of HMDA’s purposes. E:\FR\FM\31JAN1.SGM 31JAN1 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices amozie on DSK3GDR082PROD with NOTICES1 With respect to LEI, financial institution name, and census tract, the Bureau acknowledged in the proposal that disclosure would likely substantially facilitate the reidentification of applicants or borrowers. However, the Bureau initially determined that these risks to applicant and borrower privacy would be justified by the benefits of disclosure in light of HMDA’s purposes.47 With respect to income, action taken, and reasons for denial, the Bureau recognized in the proposal that, if the HMDA data were re-identified, disclosure would likely create a risk of harm or sensitivity, but the Bureau initially determined these risks would be justified by the benefits of disclosure in light of HMDA’s purposes.48 The Bureau responds to the specific comments it received on its proposed treatment of these data and describes its final determinations below. Legal Entity Identifier and Financial Institution Name Regulation C requires a financial institution, when submitting its loan/ application register to the Bureau, to report the financial institution’s LEI and name.49 This requirement is effective January 1, 2019, and will apply to the submission of 2018 HMDA data.50 The LEI is an identifier issued to the financial institution by either a utility endorsed by the LEI Regulatory Oversight Committee or a utility endorsed or otherwise governed by the Global LEI Foundation (GLEIF) (or any successor of the GLEIF) after the GLEIF assumes operational governance of the global LEI system.51 Prior to the 2015 HMDA Final Rule, a financial institution was required to report its name and HMDA Reporter’s Identification Number (HMDA RID), a ten-digit number that consisted of an entity identifier specified by the financial institution’s appropriate Federal agency combined with a code that designates the agency. Both the financial institution’s name and HMDA RID were disclosed to the public without modification under the Board’s disclosure regime. The Bureau proposed to disclose to the public without modification LEI and financial institution name as reported.52 The Bureau initially determined that disclosure of these data fields in the loan-level HMDA data released to the 47 Id. at 44597–99. public would likely substantially facilitate the re-identification of applicants or borrowers, but that this risk to applicant and borrower privacy would be justified by the benefits of disclosure in light of HMDA’s purposes.53 An industry commenter stated that, due to the risk of frivolous class action litigation against financial institutions, the public HMDA data should not reveal financial institutions’ identities. The Bureau declines to exclude LEI and financial institution name from the public HMDA data based on the risk of frivolous class action litigation against financial institutions. As described above, HMDA requires each financial institution to make its modified loan/ application register available to the public, which necessarily entails identification of the lender. Though the 2015 HMDA Final Rule shifted responsibility for disclosing the modified loan/application register from institutions to the Bureau, the Bureau concludes that it must maintain the public’s ability to obtain loan-level data for an individual lender. Further, the Bureau concludes that excluding these data fields, and thereby concealing the identities of lenders, would greatly undermine the utility of the public data for HMDA’s purposes, because HMDA’s purposes in large part concern evaluating the practices of individual lenders. Although the Bureau appreciates the industry commenter’s concern about frivolous litigation against financial institutions and agrees such litigation should not be encouraged, it declines to exclude LEI and financial institution name from the public data on this basis. The Bureau intends to disclose without modification LEI and financial institution name, as proposed. For the reasons discussed above and in the proposal, the Bureau determines, based on the information currently available to it, that disclosing without modification LEI and financial institution name appropriately balances the privacy risks that may be created by disclosure of these fields and the benefits of such disclosure in light of HMDA’s purposes. Action Taken and Reasons for Denial Regulation C requires financial institutions to report the action taken by the financial institution in response to an application.54 Financial institutions must report a code from a specified list set forth in the HMDA Filing 48 Id. 49 12 CFR 1003.4(a)(1)(i)(A); 12 CFR 1003.5(a)(3) (effective Jan. 1, 2019). 50 80 FR 66128, 66312 (Oct. 28, 2015). 51 12 CFR 1003.4(a)(1)(i)(A). 52 82 FR 44586, 44597–99 (Sept. 25, 2017). VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 53 Id. at 44598 (stating that the ability to identify the financial institution by name is critical for users to evaluate the lending practices of a financial institution). 54 12 CFR 1003.4(a)(8)(i). PO 00000 Frm 00012 Fmt 4703 Sfmt 4703 657 Instructions Guide to indicate the action taken.55 Financial institutions were required to report this data field prior to the 2015 HMDA Final Rule, and this data field was disclosed to the public without modification under the Board’s disclosure regime. Regulation C also requires financial institutions to report the principal reason or reasons the financial institution denied the application, if applicable.56 If the financial institution denied the application, it must report one or more codes from a specified list to indicate the reason or reasons for denial.57 Prior to the 2015 HMDA Final Rule, reporting of reasons for denial was optional, except as required by the OCC and FDIC for certain supervised financial institutions.58 When reported, reasons for denial was disclosed to the public without modification under the Board’s disclosure regime. The Bureau proposed to disclose to the public without modification action taken and reasons for denial as reported.59 The Bureau initially determined that disclosing action taken (if an application was denied) and reasons for denial in the loan-level HMDA data released to the public would likely disclose information about the applicant or borrower that is not otherwise public and may be harmful or sensitive. Nevertheless, the Bureau 55 Bureau of Consumer Fin. Prot., ‘‘Filing instructions guide for HMDA data collected in 2018—OMB Control No. 3170–0008,’’ at 81 (Sept. 2018) (hereinafter FIG), available at https:// s3.amazonaws.com/cfpb-hmda-public/prod/help/ 2018-hmda-fig-2018-hmda-rule.pdf. Action taken is reported using the following codes: Code 1—Loan originated; Code 2—Application approved but not accepted; Code 3—Application denied; Code 4— Application withdrawn by applicant; Code 5—File closed for incompleteness; Code 6—Purchased loan; Code 7—Preapproval request denied; Code 8— Preapproval request approved but not accepted. 56 12 CFR 1003.4(a)(16). Insured depository institutions and insured credit unions are not required to report reasons for denial for loans or applications that are partially exempt under the EGRRCPA, although reporting may be required by another law or regulation. See 83 FR 45325, 45329 (Sept. 7, 2018). 57 FIG, supra note 55, at 96–98. Reasons for denial is reported using the following codes: Code 1— Debt-to-income ratio; Code 2—Employment history; Code 3—Credit history; Code 4—Collateral; Code 5—Insufficient cash (down payment, closing costs); Code 6—Unverifiable information; Code 7—Credit application incomplete; Code 8—Mortgage insurance denied; Code 9—Other; Code 10—Not applicable; Code 1111—Exempt. 58 12 CFR 1003.4(c) (effective Jan. 1, 1990). Financial institutions regulated by the OCC are required to report reasons for denial on their HMDA loan/application registers pursuant to 12 CFR 27.3(a)(1)(i), 128.6. Similarly, pursuant to regulations transferred from the Office of Thrift Supervision, certain financial institutions supervised by the FDIC are required to report reasons for denial on their HMDA loan/application registers. 12 CFR 390.147. 59 82 FR 44586, 44597–99 (Sept. 25, 2017). E:\FR\FM\31JAN1.SGM 31JAN1 amozie on DSK3GDR082PROD with NOTICES1 658 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices initially determined that this risk to applicant and borrower privacy would be justified by the benefits of disclosure in light of HMDA’s purposes.60 A group of consumer advocate commenters supported the Bureau’s proposal to disclose action taken, stating that it is essential for determining whether lenders are responsibly meeting credit needs in a non-discriminatory manner. These commenters also stated that disclosure of reasons for denial—in conjunction with disclosure of the name and version of the credit scoring model and automated underwriting system used by the financial institution, as the Bureau proposed—would increase transparency in the marketplace and support fair lending enforcement by enabling data users to determine if there are differences in reasons for denial based on the credit scoring model or automated underwriting system used. An industry commenter recommended that the Bureau exclude action taken and reasons for denial from the public HMDA data for commercialpurpose multifamily loans only. The commenter stated that disclosure of these fields would create reidentification risk and pose a unique risk of harm for commercial-purpose multifamily applicants. In the commenter’s view, if the HMDA data were re-identified, commercial-purpose multifamily applicants could suffer negative reputational harm from certain information reported for action taken— specifically, ‘‘Denied,’’ ‘‘Withdrawn by applicant,’’ or ‘‘Closed as incomplete’’— and from any information relating to the reason for a denial. According to the commenter, the disclosure of this information could adversely affect these applicants’ business relationships and these applicants may not be able to mitigate such harm effectively. The Bureau does not believe that the concerns expressed by the industry commenter justify excluding from the public HMDA data action taken and reasons for denial for commercialpurpose multifamily applications and loans. The risk of harm identified by the commenter could arise only with respect to an application that did not result in an origination. As discussed in more detail in the proposal,61 the Bureau concludes that re-identification risk is significantly reduced for applications that did not result in originations. The Bureau is not aware of any public or private dataset containing 60 Id. at 44598 (describing the utility of action taken and reasons for denial in light of HMDA’s purposes, including helping the public and public officials to identify possible discriminatory lending patterns and enforce antidiscrimination statutes). 61 See id. at 44593 n.55. VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 information about applications that do not result in originated mortgage loans. The Bureau believes that the lack of public information about applications would significantly reduce the likelihood that an adversary could match the record of a HMDA loan application that was not originated to an identified record in another dataset. Even if an applicant were to be reidentified, however, the Bureau concludes the harms the commenter envisions are unlikely to occur. Loanlevel data for multifamily applications have been disclosed publicly since 1991, and the Bureau is not aware of any evidence that adversaries have reidentified these applications in the public HMDA data or that this type of harm has occurred. Further, even if this type of reputational harm were likely to occur, this harm would not be unique to commercial-purpose multifamily borrowers. Finally, if action taken were excluded, users would be unable to determine whether an application was originated, critically impairing the utility of the public data for HMDA’s purposes. The Bureau intends to disclose without modification action taken and reasons for denial, as proposed. For the reasons discussed above and in the proposal, the Bureau determines, based on the information currently available to it, that disclosing without modification action taken and reasons for denial appropriately balances the privacy risks that may be created by disclosure of these fields and the benefits of such disclosure in light of HMDA’s purposes. State, County, and Census Tract Regulation C requires financial institutions to report the State, county, and census tract of the property securing or proposed to secure the covered loan if the property is located in an MSA or Metropolitan Division (MD) in which the institution has a home or branch office, or if the institution is subject to § 1003.4(e).62 Institutions must report the State using the two-letter State code of the property; the county using the five-digit Federal Information Processing Standards code for the county; and the census tract using the 11-digit census tract number defined by the U.S. Census Bureau.63 As originally enacted and implemented in 62 12 CFR 1003.4(a)(9)(ii). 12 CFR 1003.4(e) requires banks and savings associations that are required to report data on small business, small farm, and community development lending under regulations that implement the Community Reinvestment Act (CRA) to collect the information required by 12 CFR 1003.4(a)(9) for property located outside MSAs and MDs in which the institution has a home or branch office, or outside any MSA. 63 FIG, supra note 55, at 83–84. PO 00000 Frm 00013 Fmt 4703 Sfmt 4703 Regulation C, HMDA required financial institutions to disclose information about the financial institution’s mortgage lending activity by census tract.64 The 1992 amendments to HMDA requiring institutions to make publicly available their modified loan/ application registers included language stating ‘‘[i]t is the sense of the Congress that a depository institution should provide loan register information under this section in a format based on the census tract in which the property is located.’’ 65 State, county, and census tract were disclosed to the public without modification under the Board’s disclosure regime. The Bureau proposed to disclose to the public without modification State, county, and census tract as reported.66 The Bureau initially determined that disclosure of State and county would likely present low risk to applicant and borrower privacy, and that, to the extent that disclosure of these fields would create risk to applicant and borrower privacy, the risks would be justified by the benefits of disclosure in light of HMDA’s purposes. The Bureau initially determined that disclosure of census tract would likely substantially facilitate the re-identification of applicants or borrowers, but that this risk to applicant and borrower privacy would be justified by the benefits of disclosure in light of HMDA’s purposes.67 One industry commenter opposed the Bureau’s proposal to disclose census tract without modification, and another industry commenter opposed the disclosure of this field for commercialpurpose multifamily loans. The first industry commenter stated that, to reduce re-identification risk, the Bureau should exclude census tract from the public loan-level HMDA data and instead disclose ‘‘generalized census tract classifications’’ for each application or loan. The commenter suggested that, for example, the Bureau could indicate whether the property is located in a low- or moderate-income census tract or a census tract with a high percentage of minority residents. The second industry commenter stated that, for commercial-purpose multifamily loans only, the Bureau should exclude 64 Home Mortgage Disclosure Act of 1975, Public Law 94–200, section 304(a)(2)(A), 89 Stat. 1126 (Dec. 31, 1975); 12 CFR 203.4(a)(1) (effective June 28, 1976). 65 12 U.S.C. 2803(j)(2)(C). 66 82 FR 44586, 44597–99 (Sept. 25, 2017). 67 Id. at 44598 (describing the utility of census tract in light of HMDA’s purposes, including helping the public and public officials to determine whether financial institutions are serving the housing needs of their communities and to identify possible discriminatory lending patterns and enforce antidiscrimination statutes). E:\FR\FM\31JAN1.SGM 31JAN1 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices amozie on DSK3GDR082PROD with NOTICES1 census tract and county, and should disclose State only where there are enough multifamily originations in the State to make re-identification risk ‘‘remote,’’ although the commenter did not identify the number of originations that would satisfy that standard. According to the commenter, the disclosure of these data fields would pose elevated re-identification risk for multifamily borrowers, as significantly fewer commercial-purpose multifamily loans are originated each year than single-family loans. The Bureau recognizes that disclosing generalized census tract classifications instead of the census tract would reduce re-identification risk. Nevertheless, the Bureau concludes that doing so would critically undermine the utility of the data for HMDA’s purposes. If census tract were excluded from the HMDA data, the public and public officials would be unable to analyze the data at a geographic level smaller than county. Consequently, excluding census tract would make it virtually impossible for data users to identify possible discriminatory lending patterns within counties. For example, for a data user to analyze whether a lender was engaged in redlining, the user would need census tract to compare lending behavior among lenders in a particular community or an individual lender’s behavior in different communities. Without census tract, users would also be unable to determine whether lenders were serving the housing needs of communities within counties or identify communities within counties where public-sector investment is needed to attract private investment. Additionally, excluding census tract from disclosure would also prevent financial institutions from using HMDA to assess their own fair lending risk by comparing their data with other institutions.68 The Bureau also declines to exclude State, county, and census tract for commercial-purpose multifamily loans. The Bureau determines that the privacy risk created by the disclosure of census tract, even if heightened with respect to multifamily loans, is justified by the critical benefits of this field to HMDA’s purposes, as described in the above 68 See, e.g., Melanie Brody & Anjali Garg, ‘‘2013 HMDA Data Is Now Available; Mortgage Lenders Should Consider Evaluating Redlining Risk,’’ K&L Gates, Consumer Fin. Servs. Watch (Sept. 25, 2014), available at https:// www.consumerfinancialserviceswatch.com/2014/ 09/2013-hmda-data-is-now-available-mortgagelenders-should-consider-evaluating-redlining-risk/ (‘‘With the release of the 2013 HMDA data, lenders can now evaluate their own 2013 redlining risk by comparing their applications and originations in high-minority census tracts to those of their peers.’’). VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 paragraph. The Bureau notes that, if census tract is disclosed, disclosure of county and State do not create additional privacy risk, because knowing the census tract allows a user to discern the county and state, as counties are geographic units within states and census tracts are geographic units within counties. The Bureau intends to disclose without modification State, county, and census tract, as proposed. For the reasons discussed above and in the proposal, the Bureau determines, based on the information currently available to it, that disclosing without modification State, county, and census tract appropriately balances the privacy risks that may be created by disclosure of these fields and the benefits of such disclosure in light of HMDA’s purposes. Income Regulation C requires financial institutions to report the gross annual income they relied on in making the credit decision or, if a credit decision was not made, the gross annual income they relied on in processing the application. Financial institutions do not have to report income for covered loans for which the credit decision did not consider income (or for applications for which the credit decision would not have considered income).69 Financial institutions must report income rounded to the nearest thousand.70 The Board amended Regulation C in 1989 to require reporting of income as part of its implementation of FIRREA.71 Prior to the 2015 HMDA Final Rule, financial institutions were required to report this data field rounded to the nearest thousand. Under the Board’s disclosure regime, this data field was disclosed to the public without modification. The Bureau proposed to disclose without modification income as reported.72 The Bureau initially determined that disclosing income in the loan-level HMDA data released to the public would likely disclose information about the applicant or borrower that is not otherwise public and may be harmful or sensitive. Nevertheless, the Bureau initially determined that this risk to applicant and borrower privacy would be justified by the benefits of disclosure in light of HMDA’s purposes.73 CFR 1003.4(a)(10)(iii). 4(a)(10)(iii)–10. 71 54 FR 51356, 51363 (Dec. 15, 1989). 72 82 FR 44586, 44597–99 (Sept. 25, 2017). 73 Id. at 44598 (describing the utility of income in light of HMDA’s purposes, including helping the public and public officials to determine whether financial institutions are serving the housing needs of their communities and to identify possible 659 An industry commenter opposed the Bureau’s proposal to disclose income without modification and recommended that the Bureau exclude income from the public HMDA data. The commenter stated that the new data required under the 2015 HMDA Final Rule would increase the risk that the HMDA data could be re-identified, and that information about a consumer’s income is generally not available to the public and is considered sensitive by many consumers. The commenter also stated that income data would be ‘‘inconsequential’’ because the 2015 HMDA Final Rule modified Regulation C to require financial institutions to report debt-to-income ratio. The Bureau does not believe that the concerns expressed by the commenter justify excluding income from the public HMDA data. The Bureau recognizes, as it stated in the proposal, that, if the HMDA data were reidentified, disclosure of income would likely create a risk of harm or sensitivity.74 However, the Bureau believes that this risk is justified by the benefits of disclosure to HMDA’s purposes. For example, income data plays a crucial role in: (1) Helping to identify whether the credit needs of people with low and moderate incomes in particular communities are being met; (2) the extent to which borrowers with low and moderate incomes are using certain products, such as home equity lines of credit; and (3) the extent to which lower-income borrowers are receiving credit under different terms than higher-income borrowers. The Bureau also believes that income data will continue to be valuable for achieving HMDA’s fair lending purposes, notwithstanding the disclosure of debt-to-income ratio data pursuant to HMDA. Although lenders may rely more on debt-to-income ratio than on income in underwriting a loan, income will continue to be valuable as a proxy for debt-to-income ratio if debtto-income ratio is not reported as a result of the EGRRCPA 75 or if the precision of debt-to-income ratio is reduced in the public data as a result of binning or top- or bottom-coding. To the extent the commenter’s concern is that the HMDA data the Bureau proposed to disclose presents increased reidentification risk compared to the data disclosed under the Board’s disclosure 69 12 70 Comment PO 00000 Frm 00014 Fmt 4703 Sfmt 4703 discriminatory lending patterns and enforce antidiscrimination statutes). 74 Id. 75 As described in greater detail in part II.B, above, the EGRRCPA amended HMDA by adding partial exemptions from HMDA’s data collection and reporting requirements for certain insured depository institutions and insured credit unions. E:\FR\FM\31JAN1.SGM 31JAN1 660 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices regime, the Bureau notes that it intends to modify every new field required under the 2015 HMDA Final Rule that it has identified as likely to substantially facilitate the reidentification of an applicant or borrower. Further, the Bureau intends to modify loan amount, a field that was disclosed without modification under the Board’s disclosure regime and that the Bureau determines to be a significant contributor to reidentification risk in the HMDA data. The Bureau intends to disclose without modification income. For the reasons discussed above and in the proposal, the Bureau determines, based on the information currently available to it, that disclosing without modification income appropriately balances the privacy risks that may be created by disclosure of this field and the benefits of such disclosure in light of HMDA’s purposes. amozie on DSK3GDR082PROD with NOTICES1 Data To Be Excluded or Otherwise Modified in the Loan-Level HMDA Data The Bureau proposed to exclude or otherwise modify several data fields in the public HMDA data: The universal loan identifier; application date; loan amount; action taken date; property address; age; credit score; property value; debt-to-income ratio; the unique identifier assigned by the Nationwide Mortgage Licensing System and Registry for the mortgage loan originator; and AUS result. The Bureau also proposed to exclude free-form text fields used in certain instances to report the following data: Ethnicity; race; the name and version of the credit scoring model; reasons for denial; and AUS name. Below the Bureau addresses the comments it received and describes its final action on each of these data fields and on two additional data fields it did not propose to modify but intends to modify under the final policy guidance: Total units and affordable units. Universal Loan Identifier or NonUniversal Loan Identifier Regulation C requires financial institutions to report a universal loan identifier (ULI) for each covered loan or application that can be used to identify and retrieve the application file.76 Regulation C sets forth detailed requirements concerning the ULI to be assigned and reported.77 A ULI must begin with the financial institution’s LEI, followed by up to 23 additional characters to identify the covered loan or application, and then end with a twocharacter check digit calculated 76 12 CFR 1003.4(a)(1)(i). 77 Id. VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 according to the methodology prescribed in appendix C of Regulation C.78 In addition, a ULI must be unique within the institution and must not contain any information that could be used to directly identify the applicant or borrower.79 Institutions reporting a loan for which a ULI was previously assigned and reported must report the ULI that was previously assigned and reported for the loan. The ULI must be reported as an alphanumeric field.80 The requirement in the 2015 HMDA Final Rule to report a ULI replaced the requirement under prior Regulation C that a financial institution report an identifying number for the loan or loan application. Under the Board’s disclosure regime, this loan or loan application identifying number was excluded from the public HMDA data. The Bureau added the requirement to report a ULI to implement the DoddFrank Act’s amendment to HMDA providing for the collection and reporting of, ‘‘as the Bureau may determine to be appropriate, a universal loan identifier.’’ 81 Insured depository institutions and insured credit unions are not required to report ULI for loans or applications that are partially exempt under the EGRRCPA.82 The 2018 HMDA Final Rule provides, however, that—because loans and applications must be identifiable in the HMDA data to ensure proper HMDA submission, processing, and compliance—institutions that choose not to report ULI pursuant to the EGRRCPA must report a non-universal loan identifier (NULI) for each loan and application.83 The NULI may be composed of up to 22 characters and, among other requirements, must be unique within the insured depository institution or insured credit union, though it need not be unique within the industry.84 The Bureau proposed to modify the loan-level HMDA data disclosed to the public by excluding ULI.85 The Bureau initially determined that disclosing ULI in the loan-level HMDA data released to the public would likely substantially facilitate the re-identification of an applicant or borrower and that this risk would not be justified by the benefits of the disclosure in light of HMDA’s purposes.86 78 12 CFR 1003.4(a)(1)(i)(A) through (C). CFR 1003.4(a)(1)(i)(B)(3). 80 FIG, supra note 55, at 77–79. 81 12 U.S.C. 2803(b)(6)(G). 82 83 FR 45325, 45329 (Sept. 7, 2018). 83 Id. at 45330. 84 Id.; see also FIG, supra note 55, at 78–79. 85 82 FR 44586, 44599–44600 (Sept. 25, 2017). 86 Id. at 44599 (describing the utility of ULI in light of HMDA’s purposes, including helping the 79 12 PO 00000 Frm 00015 Fmt 4703 Sfmt 4703 A few industry commenters supported the Bureau’s proposal to exclude ULI from the public HMDA data. A group of consumer advocate commenters did not oppose the Bureau’s proposal to exclude ULI but recommended that, separate from the HMDA data, the Bureau publish an additional data product that, according to these commenters, would serve some of the same purposes as ULI. Specifically, these commenters recommended that the Bureau publish data on each financial institution’s loan purchases by income level and by year originated. According to these commenters, this data would help data users assess whether financial institutions are purchasing loans made to low- and moderate-income borrowers from one another to improve their CRA ratings. The Bureau intends to exclude ULI from the public HMDA data, as proposed, and to exclude NULI if it is reported instead of ULI. For the reasons discussed above and in the proposal, the Bureau determines, based on the information currently available to it, that excluding ULI and NULI from the public HMDA data appropriately balances the privacy risks that may be created by the disclosure of these fields and the benefits of such disclosure in light of HMDA’s purposes.87 Application Date Regulation C requires financial institutions to report, except for purchased covered loans, the date the application was received or the date shown on the application form.88 This date must be reported by financial institutions as the exact year, month, and day, in the format of YYYYMMDD.89 Financial institutions were required to report this data field prior to the 2015 HMDA Final Rule. The Board amended Regulation C in 1989 to require reporting of the date the application was received as part of its implementation of FIRREA.90 Under the Board’s disclosure regime, application date was excluded from the public HMDA data. The Bureau proposed to modify the loan-level HMDA data disclosed to the public by continuing to exclude public and public officials to determine whether financial institutions are serving the housing needs of their communities). 87 Regarding the consumer advocate commenters’ request for additional data, the Bureau will consider, as it does in the ordinary course of its business, whether to make additional information related to mortgage lending available to the public. 88 12 CFR 1003.4(a)(1)(ii). 89 FIG, supra note 55, at 79. 90 54 FR 51356, 51363 (Dec. 15, 1989). E:\FR\FM\31JAN1.SGM 31JAN1 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices application date.91 The Bureau initially determined that disclosing application date in the loan-level HMDA data released to the public would likely substantially facilitate the reidentification of an applicant or borrower and that this risk would not be justified by the benefits of disclosure in light of HMDA’s purposes.92 A few industry commenters supported the Bureau’s proposal to continue to exclude application date from the public HMDA data. Two of these commenters stated that excluding application date, along with the other data points the Bureau proposed to exclude, would reduce re-identification risk. Another of these commenters stated that excluding this data field, along with the other data points the Bureau proposed to exclude, would reduce the likelihood that community bank customers would become victims of identity theft or fraud. The Bureau intends to exclude application date from the public HMDA data, as proposed. For the reasons discussed above and in the proposal, the Bureau determines, based on the information currently available to it, that excluding application date from the public HMDA data appropriately balances the privacy risks that may be created by the disclosure of this field and the benefits of such disclosure in light of HMDA’s purposes. Loan Amount and Property Value amozie on DSK3GDR082PROD with NOTICES1 Regulation C requires financial institutions to report the amount of the covered loan or the amount applied for.93 For closed-end mortgage loans, open-end lines of credit, and reverse mortgages, this amount is the amount to be repaid as disclosed on the legal obligation, the amount of credit available to the borrower, and the initial principal limit, respectively. Loan amount must be submitted by financial institutions in numeric form reflecting the exact dollar amount of the loan.94 Prior to the 2015 HMDA Final Rule, this data field was reported rounded to the nearest thousand; it was publicly disclosed without modification under the Board’s disclosure regime. Although HMDA has always required financial institutions to report information about the dollar amount of a financial 91 82 FR 44586, 44600–01 (Sept. 25, 2017). at 44600 (describing the utility of application date in light of HMDA’s purposes, including helping the public and public officials to identify possible discriminatory lending patterns and enforce antidiscrimination statutes). 93 12 CFR 1003.4(a)(7). 94 FIG, supra note 55, at 81. 92 Id. VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 institution’s mortgage lending activity,95 the Board amended Regulation C in 1989 to require reporting of loan amount on a loan-level basis as part of its implementation of FIRREA.96 Regulation C also requires financial institutions to report the value of the property securing the covered loan or, in the case of an application, proposed to secure the covered loan.97 Financial institutions must report the value they relied on in making the credit decision, such as an appraisal value or the purchase price of the property.98 Property value must be reported in numeric form reflecting the exact dollar amount of the value the financial institution relied on.99 The Bureau added the requirement to report property value the financial institution relied on in the 2015 HMDA Final Rule to implement the Dodd-Frank Act’s amendment to HMDA providing for the collection and reporting of the value of the real property pledged or proposed to be pledged as collateral.100 The Bureau proposed to modify the loan-level HMDA dataset disclosed to the public by disclosing the midpoint for the $10,000 interval into which the reported loan amount or property value falls instead of the exact value reported.101 For example, for a reported loan amount or property value of $117,834, the Bureau would disclose $115,000 as the midpoint between values equal to $110,000 and less than $120,000. The Bureau initially determined that disclosing reported loan amount and property value in the loan-level HMDA data released to the public would likely substantially facilitate the re-identification of an applicant or borrower and that this risk would not be justified by the benefits of the disclosure in light of HMDA’s purposes.102 The Bureau also proposed to include an indicator of whether the 95 Home Mortgage Disclosure Act, Public Law 94– 200, sections 301–310, 89 Stat. 1124, 1125–28 (1975). 96 See 54 FR 51356 (Dec. 15, 1989). 97 12 CFR 1003.4(a)(28). Insured depository institutions and insured credit unions are not required to report property value for loans or applications that are partially exempt under the EGRRCPA. See 83 FR 45325, 45329 (Sept. 7, 2018). 98 Comment 4(a)(28)–1. 99 FIG, supra note 55, at 104. 100 Dodd-Frank Act section 1094(3)(A)(iv), 12 U.S.C. 2803(b)(6)(A). 101 82 FR 44586, 44601–02; 44607–08 (Sept. 25, 2017). 102 See id. at 44601, 44607 (describing the utility of loan amount and property value in light of HMDA’s purposes, including helping the public and public officials to determine whether financial institutions are serving the housing needs of their communities, and to identify possible discriminatory lending patterns and enforce antidiscrimination statutes). PO 00000 Frm 00016 Fmt 4703 Sfmt 4703 661 reported loan amount exceeds the applicable dollar amount limitation on the original principal obligation in effect at the time of application or origination as provided under 12 U.S.C. 1717(b)(2) and 12 U.S.C. 1454(a)(2) (GSE conforming loan limit).103 The Bureau sought comment on whether to add a similar indicator for the applicable limit for loans eligible for insurance by the Federal Housing Administration (FHA conforming loan limit).104 A few commenters opposed the Bureau’s proposal to disclose loan amount in $10,000 bins and asked the Bureau to disclose more precise loan amount values. A group of consumer advocate commenters and an industry commenter each recommended disclosing loan amount rounded to the nearest $1,000, like under the Board’s disclosure regime. They asserted that $10,000 bins would disproportionately affect the utility of the data for smaller loans. Conversely, an industry commenter opposed the Bureau’s proposal and asked the Bureau to disclose less precise loan amount values, stating that $10,000 bins would insufficiently obscure the reported value for larger loans, such as multifamily loans, and thus would yield insufficient protection against re-identification relative to smaller loans. As with loan amount, a few commenters urged the Bureau to disclose more precise property values, such as by rounding to the nearest $1,000, while an industry commenter supported disclosing less precise values. An industry commenter stated that property value, or the property value derived from loan-tovalue ratio, could be matched to publicly-available property or appraisal records. One industry commenter supported the Bureau’s proposal to disclose loan amount and property value in $10,000 bins because it believed these bins would help prevent re-identification of applicants and borrowers while preserving much of the utility of these data fields. A government agency commenter supported the proposed GSE 103 The dollar amount limitation on the original principal obligation as provided under 12 U.S.C. 1717(b)(2) and 12 U.S.C. 1454(a)(2) refers to the annual maximum principal loan balance for a mortgage acquired by Fannie Mae and Freddie Mac (the ‘‘GSEs’’). The FHFA is responsible for determining the maximum conforming loan limits for mortgages acquired by the GSEs. See Press Release, Fed. Hous. Fin. Agency, FHFA Announces Increase in Maximum Conforming Loan Limits for Fannie Mae and Freddie Mac in 2017 (Nov. 23, 2016), available at https://www.fhfa.gov/Media/ PublicAffairs/Pages/FHFA-Announces-Increase-inMaximum-Conforming-Loan-Limits-for-Fannie-Maeand-Freddie-Mac-in-2017.aspx. 104 See 24 CFR 203.18 (providing maximum amounts for eligible mortgages). E:\FR\FM\31JAN1.SGM 31JAN1 amozie on DSK3GDR082PROD with NOTICES1 662 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices conforming loan limit indicator because the indicator would allow it to continue using public HMDA data to identify the market size for conforming loans for the purpose of setting housing goals for its regulated entities and to perform other analyses related to the conforming loan limit. Similarly, a group of consumer advocate commenters supported the proposed GSE conforming loan limit flag. These commenters also recommended adding a similar indicator for the FHA conforming loan limit, stating that analysis of loans below the FHA conforming loan limit was important for fair lending purposes. The Bureau determines that disclosing loan amount in $10,000 intervals will create a meaningful reduction in record uniqueness in the HMDA data when evaluating three data fields that the Bureau concludes contribute most to re-identification risk: Loan amount, census tract, and lender name. Although the Bureau recognizes that disclosing loan amount in $10,000 intervals will reduce the utility of this field compared to disclosing more precise amounts, it believes it will still allow users to rely on loan amount to further HMDA’s purposes to some degree. For example, $10,000 intervals will still allow users to have some understanding of the amount of credit that financial institutions have made available to consumers in certain communities and the extent to which such institutions are providing credit in varying amounts. The Bureau acknowledges that, as commenters stated, $10,000 intervals create a larger reduction in uniqueness for small loan amounts—providing more privacy protection and less data utility—and a smaller reduction in uniqueness for large loan amounts— providing less privacy protection and more data utility—relative to the baseline reduction in uniqueness for all loans in the dataset. To address the fact that the proposed uniform binning approach would not yield the same balance of benefits and risks across all loan amounts, the Bureau considered whether it could apply bin sizes that differed by reported loan amount. For example, the Bureau could create bin sizes that were a function of loan amount, such as a percentage of the reported value. However, this approach may allow adversaries to determine the precise loan amount by reversing the function applied to the reported loan amount value. The Bureau also considered graduated bin sizes for segments of loans. However, the larger bin sizes in a graduated binning scheme would disproportionately reduce the utility of the data in more expensive VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 geographic regions. Graduated bin sizes also would more significantly impair overall data utility compared to $10,000 bins, as users who wish to work with a consistently binned dataset would have to use the largest bin size for all loans. Finally, identifying a basis upon which to segment loan amount values into different sized bins presents challenges. In principle, the Bureau could analyze the reported HMDA data annually and determine segments based on the distribution of loan amounts in a given year to try to achieve more consistent reduction in uniqueness across loans of all sizes. In practice, however, resubmissions and late submissions may change the distribution of loan amounts, creating a risk that the Bureau would lack sufficient time to determine and apply the appropriate bins before disclosing the modified loan/ application registers. Regarding an industry commenter’s claim that property value could be matched to public appraisal records and could be derived from the loan-to-value ratio, the Bureau notes that appraisal records are not public, and the HMDA data will not contain loan-to-value ratio.105 However, the Bureau believes that identified property tax records or real estate transaction records may contain values close enough to the reported property value that property value would substantially facilitate the re-identification of a loan. Property value was not required to be reported prior to the 2015 HMDA Final Rule. The Bureau nevertheless expects its uniqueness to be similar to the uniqueness of the values reported for loan amount and believes that disclosing property value in $10,000 intervals would create a meaningful reduction in uniqueness. The Bureau concludes that disclosing property value in $10,000 intervals would still allow data users to determine the general values of properties for which financial institutions are providing financing. As with loan amount, the Bureau considered approaches that would bin property value in different intervals depending on the reported value, but for the reasons described above, the Bureau is not adopting such approaches. Disclosing property value in $10,000 intervals also reduces adversaries’ potential ability to use combined loanto-value ratio to derive the reported loan amount. As mentioned above, the Bureau intends to disclose without modification combined loan-to-value 105 Unlike combined loan-to-value ratio, which includes the total amount of all debt secured by the property securing the loan reported, the loan-tovalue ratio includes only the amount of the reported loan itself. PO 00000 Frm 00017 Fmt 4703 Sfmt 4703 ratio. Although both loan amount and property value would likely substantially facilitate re-identification, the Bureau concludes that loan amount will be easier to match to public records where available, because public records that contain the loan amount will likely contain the exact loan amount reported under HMDA. In contrast, the Bureau concludes that financial institutions will likely report the appraisal value as the property value, and the appraisal value is not publicly available. However, even with property value disclosed in $10,000 intervals, if the reported combined loan-to-value ratio for a particular transaction is actually the loan-to-value ratio, the loan amount, property value, and combined loan-tovalue ratio feasibly could be used to narrow the possible values for loan amount, thus decreasing the reduction in record uniqueness relative to $10,000 intervals.106 The extent to which this possible interaction could decrease the benefits of binning loan amount is uncertain. As an initial matter, under the 2018 HMDA Final Rule, certain small insured depository institutions and insured credit unions will not be required to report combined loan-tovalue ratio or property value, so the interaction at issue will not be possible for many loans. Moreover, the percentage of transactions for which the reported combined loan-to-value ratio will equal the loan-to-value ratio will vary based on market conditions, and the Bureau believes that adversaries will not be able to determine exactly when the combined loan-to-value and loan-tovalue ratios are equal for a given transaction. Finally, even if an adversary could narrow for a particular transaction the range of possible loan amount values, the narrowed range may not yield a record that is unique on the data fields that most contribute to reidentification. The Bureau proposed the GSE conforming loan limit indicator to facilitate the accuracy and transparency of the FHFA Housing Goals program.107 FHFA has historically relied on public HMDA data to set statutorily-required housing goals for the GSEs to ensure the GSEs and the public are aware of and can provide feedback on FHFA’s methodology. Binning loan amount as proposed would significantly reduce the accuracy of many calculations necessary to set these goals and measure performance, which hinge on determining whether loans meet the 106 Similarly, an adversary could narrow the possible values for property value. 107 12 CFR 1281.11 (bank housing goals); 12 CFR 1282.12 (GSE housing goals). E:\FR\FM\31JAN1.SGM 31JAN1 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices amozie on DSK3GDR082PROD with NOTICES1 GSE conforming loan limit. Although FHFA could use non-public HMDA data for modeling purposes, this would result in FHFA, its regulated entities, and the public working from different datasets to evaluate the accuracy and transparency of the FHFA Housing Goals program. In contrast to the GSE conforming loan limit indicator, a FHA conforming loan limit indicator would not serve a similarly compelling purpose. Disclosing loan amount in $10,000 intervals will sometimes reduce the ability of the public to determine whether a loan is at or above the FHA conforming loan limit. However, no commenter stated that the absence of this information would impact the FHA’s ability to perform statutorilyrequired functions. Additionally, no commenter addressed the question of whether factors not reflected in the HMDA data would affect the accuracy of a FHA conforming loan limit indicator, and the Bureau remains concerned about its ability to accurately produce such an indicator using the HMDA data. The Bureau intends to modify the loan-level HMDA data disclosed to the public by disclosing the midpoint for the $10,000 interval into which the reported loan amount or property value falls, as proposed. The Bureau also intends to indicate in the data disclosed whether the reported loan amount exceeds the GSE conforming loan limit.108 For the reasons discussed above and in the proposal, the Bureau determines, based on the information currently available to it, that these modifications appropriately balance the privacy risks that would likely be created by the disclosure of these fields and the benefits of such disclosure in light of HMDA’s purposes. Action Taken Date Regulation C requires financial institutions to report the date of action taken by the financial institution on a covered loan or application.109 For originated loans, this date is generally the date of closing or the date of account opening.110 Regulation C provides some flexibility in reporting the date for other types of actions taken, such as applications denied, withdrawn, or approved by the institution but not accepted by the applicant. For example, for applications approved but not accepted, a financial institution may 108 The GSE conforming loan limit indicator will be included in the annual loan-level disclosure of all reported HMDA data combined, rather than in the modified loan/application register for each financial institution. 109 12 CFR 1003.4(a)(8)(ii). 110 Comment 4(a)(8)(ii)–5. VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 report ‘‘any reasonable date, such as the approval date, the deadline for accepting the offer, or the date the file was closed,’’ provided it adopts a generally consistent approach.111 This date is submitted by financial institutions as the exact year, month, and day, in the format of YYYYMMDD.112 Financial institutions were required to report this data field prior to the 2015 HMDA Final Rule. As with the application date, the Board added the requirement to report the action taken date as part of the amendments to Regulation C that implemented FIRREA.113 Under the Board’s disclosure regime, action taken date was excluded from the public HMDA data. The Bureau proposed to modify the loan-level HMDA data disclosed to the public by continuing to exclude action taken date.114 The Bureau initially determined that disclosing action taken date in the loan-level HMDA data released to the public would likely substantially facilitate the reidentification of an applicant or borrower and that this risk would not be justified by the benefits of the disclosure in light of HMDA’s purposes.115 A few industry commenters supported the Bureau’s proposal to continue to exclude action taken date from the HMDA data disclosed to the public. The Bureau intends to exclude action taken date from the public HMDA data, as proposed. For the reasons discussed above and in the proposal, the Bureau determines, based on the information currently available to it, that excluding action taken date from the public HMDA data appropriately balances the privacy risks that may be created by the disclosure of this field and the benefits of such disclosure in light of HMDA’s purposes. Property Address Regulation C requires financial institutions to report the address of the property securing the loan or, in the case of an application, proposed to secure the loan.116 This address corresponds to the property identified on the legal obligation related to the 111 Comment 4(a)(8)(ii)–4. supra note 55, at 81. 113 54 FR 51356, 51363 (Dec. 15, 1989). 114 82 FR 44586, 44602–03 (Sept. 25, 2017). 115 Id. at 44602 (describing the utility of action taken date in light of HMDA’s purposes, including helping the public and public officials to identify possible discriminatory lending patterns and enforce antidiscrimination statutes). 116 12 CFR 1003.4(a)(9)(i). Insured depository institutions and insured credit unions are not required to report property address for loans or applications that are partially exempt under the EGRRCPA. See 83 FR 45325, 45329 (Sept. 7, 2018). 112 FIG, PO 00000 Frm 00018 Fmt 4703 Sfmt 4703 663 covered loan.117 The property address reported by financial institutions includes the street address, city name, State name, and zip code.118 The Bureau added the requirement to report property address in the 2015 HMDA Final Rule to implement the DoddFrank Act’s amendment to HMDA providing for the collection and reporting of, ‘‘as the Bureau may determine to be appropriate, the parcel number that corresponds to the real property pledged or proposed to be pledged as collateral.’’ 119 The Bureau proposed to modify the loan-level HMDA data disclosed to the public by excluding property address.120 The Bureau initially determined that disclosing property address in the loan-level HMDA data released to the public would likely substantially facilitate the reidentification of an applicant or borrower and that this risk would not be justified by the benefits of the disclosure in light of HMDA’s purposes.121 A few industry commenters supported the Bureau’s proposal to exclude property address from the public HMDA data. A group of consumer advocate commenters recommended that the Bureau disclose a hashed value for each property address in lieu of the property address.122 According to these commenters, disclosure of a hashed value in place of property address would help data users track ‘‘loan flipping,’’ which these commenters described as a predatory practice in which lenders target borrowers for a series of refinancings that increase the borrower’s debt and strip equity. These commenters did not address whether the recommended hashed value should be used in place of a particular property address from year to year, i.e., every time that the particular property address is included in reported HMDA data. 117 Comment 4(a)(9)(i)–1. For applications that did not result in an origination, the address corresponds to the location of the property proposed to secure the loan as identified by the applicant. Id. 118 Comment 4(a)(9)(i)–2. 119 12 U.S.C. 2803(b)(6)(H). 120 82 FR 44586, 44603–04 (Sept. 25, 2017). 121 Id. at 44603 (describing the utility of property address in light of HMDA’s purposes, including helping the public and public officials to determine whether financial institutions are serving the housing needs of their communities and to identify possible discriminatory lending patterns and enforce antidiscrimination statutes). 122 A hashed value is a value generated by a secure hash algorithm. A hash algorithm is designed to be non-invertible, meaning that the original value, in this case the reported property address, could not be derived from the hashed value. E:\FR\FM\31JAN1.SGM 31JAN1 664 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices The Bureau declines to disclose a hashed value in place of the property address. The Bureau finds that a hashed value used only within a particular year’s HMDA data would have limited value for studying loan flipping. However, if a hashed value were carried over from year to year, the Bureau is concerned that, if one transaction related to the property were reidentified, the hashed value could be used to re-identify every loan secured by the property in any other year’s HMDA data. The Bureau also finds it would be difficult to develop a hashing algorithm that recognizes, with certainty, if a reported property address is unique, given slight differences in how property addresses may be reported. The Bureau intends to exclude property address from the public HMDA data, as proposed. For the reasons discussed above and in the proposal, the Bureau determines, based on the information currently available to it, that excluding property address from the public HMDA data appropriately balances the privacy risks that may be created by the disclosure of this field and the benefits of such disclosure in light of HMDA’s purposes. amozie on DSK3GDR082PROD with NOTICES1 Age Regulation C requires financial institutions to report the age of the applicant or borrower.123 A financial institution complies with this requirement by reporting age, as of the application date reported, as the number of whole years derived from the date of birth as shown on the application form.124 The Bureau added the requirement to report age in the 2015 HMDA Final Rule to implement the Dodd-Frank Act’s amendment to HMDA providing for the collection and reporting of age.125 The Bureau proposed to disclose age binned into the following ranges: 25 to 34; 35 to 44; 45 to 54; 55 to 64; and 65 to 74. The Bureau also proposed to bottom-code age under 25 and to topcode age over 74.126 The Bureau initially determined that disclosing reported age in the public HMDA data would likely disclose information about the applicant or borrower that is not otherwise public and may be harmful or sensitive and that this risk would not be justified by the benefits of the disclosure in light of HMDA’s purposes.127 123 12 CFR 1003.4(a)(10)(ii). 4(a)(1)(ii)–1. 125 12 U.S.C. 2803(b)(4). 126 82 FR 44586, 44604 (Sept. 25, 2017). 127 Id. (describing the utility of age in light of HMDA’s purposes, including helping the public 124 Comment VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 The Bureau also proposed to indicate whether a reported age is 62 or higher to enhance the utility of the data for identifying the particular fair lending risks that may be posed with regard to older populations.128 The Bureau recognized that an effect of this indicator would be to divide the 55 to 64 bin into two bins, 55 to 61 and 62 to 64. The Bureau sought comment on whether, instead of binning age as proposed and indicating whether a reported age is 62 or higher, the Bureau should disclose reported ages of 55 to 74 in ranges of 55 to 61 and 62 to 74. An industry commenter expressed support for the Bureau’s proposal to modify reported age. A group of consumer advocate commenters expressed general support for the Bureau’s proposal. These commenters stated that applicant and borrower age is vital for fair lending enforcement and to identify potential unfair and deceptive lending. These commenters also stated that, in the years before the 2008 financial crisis, abusive lenders targeted older adults, especially older adults of color, and that abuses also occurred in the reverse mortgage market for adults over age 62. These commenters expressed support for the Bureau’s proposal to indicate whether a reported age is 62 or higher. These commenters also expressed a preference for the proposed bins and indicator approach to the alternative the Bureau considered (binning reported ages of 55 to 74 in ranges of 55 to 61 and 62 to 74), noting that the proposed bins would provide more precise data with respect to borrowers newly eligible for reverse mortgages (i.e., 62- to 64-year old borrowers). Finally, these commenters asked the Bureau to top-code age at 84, instead of 74. They stated that Americans are living longer, and topcoding age at 84 would help the public identify reverse mortgage and other lending patterns affecting the oldest seniors, including any fair lending or affordability concerns. An industry commenter expressed opposition to the Bureau’s proposal and recommended that the Bureau exclude age entirely from the public HMDA data. The commenter expressed concern that disclosing age could facilitate reidentification of applicants and and public officials to determine whether financial institutions are serving the housing needs of their communities and to identify possible discriminatory lending patterns and enforce antidiscrimination statutes). 128 Under Federal law, age 62 or higher is considered to be older age for certain purposes. See, e.g., 24 CFR 206.33 (concerning eligibility for a home equity conversion mortgage); 12 CFR 1002.2(o) (defining ‘‘elderly’’ as 62 or older). PO 00000 Frm 00019 Fmt 4703 Sfmt 4703 borrowers and enable adversaries to prey on vulnerable age groups. The Bureau acknowledges the risks identified by the industry commenter. However, as explained in the proposal, applicant or borrower age would assist users in identifying possible discriminatory lending patterns and enforcing antidiscrimination statutes by allowing users to examine potential age discrimination in lending.129 Applicant or borrower age would also assist in determining whether financial institutions are serving the housing needs of their communities, including the needs of various age cohorts. The Bureau determines that indicating whether the reported age is 62 or higher would provide the greater utility identified by the commenters, as compared to the alternative bins about which the Bureau sought comment. Additionally, this approach would result in more consistent binning of the data and would allow analysis of the HMDA data in combination with data found in other public data sources, such as U.S. Census Bureau data, to further HMDA’s purposes. The Bureau determines that the difference in privacy protection provided by the proposed approach compared to the alternative is minimal and is justified by the benefits of the proposed approach. Finally, the Bureau believes that topcoding age over 84 could allow greater visibility into lending practices with respect to the oldest consumers and could further HMDA’s purposes: Specifically, such disclosure could permit the public and public officials to better understand whether lenders are serving the housing needs of the oldest seniors of their communities and to observe lending patterns relating to such consumers, a typically fixed-income population that is engaging in increased dwelling-secured borrowing with respect to which there is little public data currently available. However, the Bureau believes this approach also could increase privacy risk. The Bureau believes the reported HMDA data likely will not include significant numbers of records for applicants and borrowers over age 84, which could pose reidentification risk. Thus, the harm and sensitivity risks identified in the proposal may be heightened to the extent that adversaries could re-identify the oldest borrowers. Based on the information currently available to it, in light of the potential risks and benefits of this approach, the Bureau determines not to top-code age over 84. The Bureau intends to modify the loan-level HMDA data disclosed to the 129 See E:\FR\FM\31JAN1.SGM 82 FR 44586, 44604 (Sept. 25, 2017). 31JAN1 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices public by disclosing age binned into the following ranges: 25 to 34; 35 to 44; 45 to 54; 55 to 64; and 65 to 74, as proposed. The Bureau also intends to bottom-code age under 25 and to topcode age over 74. Finally, the Bureau intends to indicate whether reported age is 62 or higher. For the reasons discussed above and in more detail in the proposal, the Bureau determines, based on the information currently available to it, that these modifications appropriately balance the privacy risks that would likely be created by the disclosure of this field and the benefits of such disclosure in light of HMDA’s purposes. Credit Score amozie on DSK3GDR082PROD with NOTICES1 Regulation C requires financial institutions to report, except for purchased covered loans, the credit score or scores relied on in making the credit decision and the name and version of the scoring model used to generate each credit score.130 It also provides that, for purposes of this requirement, ‘‘credit score’’ has the meaning set forth in section 609(f)(2)(A) of the Fair Credit Reporting Act (FCRA).131 Financial institutions must report credit score as a numeric field, e.g., 650.132 Financial institutions must also report a code from a specified list to indicate the name and version of the scoring model used to generate each credit score reported.133 The Bureau added the requirement to report these data in the 2015 HMDA Final Rule to implement the Dodd-Frank Act’s amendment to HMDA providing for the collection and reporting of ‘‘the credit score of mortgage applicants and mortgagors, in such form as the Bureau may prescribe.’’ 134 The Bureau proposed to modify the loan-level HMDA data disclosed to the public by excluding credit score.135 The Bureau initially determined that disclosing credit score in the loan-level HMDA data released to the public would likely disclose information about the applicant or borrower that is not otherwise public and may be harmful or sensitive and that this risk would not be justified by the benefits of the disclosure in light of HMDA’s purposes.136 130 12 CFR 1003.4(a)(15)(i). Insured depository institutions and insured credit unions are not required to report credit score for loans or applications that are partially exempt under the EGRRCPA. See 83 FR 45325, 45329 (Sept. 7, 2018). 131 12 CFR 1003.4(a)(15)(ii). 132 FIG, supra note 55, at 94–95. 133 Id. at 95–96. 134 12 U.S.C. 2803(b)(6)(I). 135 82 FR 44586, 44604–06 (Sept. 25, 2017). 136 Id. at 44605 (describing the utility of credit score in light of HMDA’s purposes, including VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 A few industry commenters supported the Bureau’s proposal to exclude credit score from the public HMDA data. Another industry commenter opposed the Bureau’s proposal to exclude credit score. The commenter stated that it would be extremely difficult to re-identify applicants or borrowers using this data field because credit scores are not publicly available, and that sensitivity alone should not be a basis for withholding data from the public where re-identification risk is low. The commenter stated further that credit scores are critically important in identifying possible discriminatory lending patterns, enforcing antidiscrimination statutes, and determining whether financial institutions are serving the housing needs of their communities, because they are an important factor in financial institutions’ underwriting decisions. A group of consumer advocate commenters also opposed the Bureau’s proposal to exclude credit score. These commenters stated that credit scores are essential in fair lending analysis because they help determine whether similarly situated applicants are treated differently solely due to their race or gender. The commenters recommended that, to address the privacy concerns identified by the Bureau, the Bureau ‘‘normalize’’ reported credit scores before disclosure to the public. The commenters suggested that the Bureau either disclose credit scores: (1) As ‘‘z-scores,’’ which the commenters described as ‘‘a measure of a credit score’s place in the overall distribution of credit scores for loan applicants that year,’’ or (2) in ‘‘percentile ranges based on the distribution of loan applicants’ credit scores.’’ The commenters also recommended that, if the Bureau excludes credit score from the public HMDA data, the Bureau disclose credit scores in aggregate form by census tract, for all lenders and for each lender. According to the commenters, this information would help the public assess whether the industry as a whole or individual lenders are treating similarly situated neighborhoods differently due to the racial, ethnic, income, or age composition of the neighborhood. The Bureau finds that the industry commenter underestimates the reidentification risk associated with the HMDA data, even modified as proposed, and that, where re-identification risk is helping the public and public officials to determine whether financial institutions are serving the housing needs of their communities and to identify possible discriminatory lending patterns and enforce antidiscrimination statutes). PO 00000 Frm 00020 Fmt 4703 Sfmt 4703 665 present, sensitivity alone is a basis for modification under the balancing test. The Bureau declines to adopt the consumer advocate commenters’ recommendation that the Bureau normalize the credit score data and disclose the normalized data. The Bureau finds that this alternative would not reduce privacy risks to the point that they would be justified by the disclosure benefits. Disclosure of a normalized credit score would reflect the applicant’s or borrower’s reported credit score in relation to all other applicants and borrowers in a particular year’s HMDA data. Thus, the Bureau believes that, if the HMDA data were reidentified, disclosure of this information would likely create a risk of harm or sensitivity similar to the risk created by disclosure of reported credit score.137 The Bureau intends to exclude credit score from the public HMDA data, as proposed. For the reasons discussed above and in the proposal, the Bureau determines, based on the information currently available to it, that excluding credit score from the public HMDA data appropriately balances the privacy risks that may be created by the disclosure of this field and the benefits of such disclosure in light of HMDA’s purposes. Debt-to-Income Ratio Regulation C requires financial institutions to report, except for purchased covered loans, the ratio of the applicant’s or borrower’s total monthly debt to the total monthly income relied on in making the credit decision (debtto-income ratio).138 The debt-to-income ratio must be reported as a percentage.139 The Bureau added the requirement to report debt-to-income ratio in the 2015 HMDA Final Rule using its discretionary authority provided by the Dodd-Frank Act’s amendment to HMDA to require the reporting of ‘‘such other information as the Bureau may require.’’ 140 The Bureau proposed to disclose reported debt-to-income ratio of greater than or equal to 40 percent and less than 50 percent.141 The Bureau also proposed to bin reported debt-to-income ratio 137 Regarding the consumer advocate commenters’ recommendation that the Bureau disclose credit scores in aggregate form, the Bureau will consider, as it does in the ordinary course of its business, whether to make additional information related to mortgage lending available to the public. 138 12 CFR 1003.4(a)(23). Insured depository institutions and insured credit unions are not required to report debt-to-income ratio for loans or applications that are partially exempt under the EGRRCPA. See 83 FR 45325, 45329 (Sept. 7, 2018). 139 FIG, supra note 55, at 101. 140 12 U.S.C. 2803(b)(6)(J). 141 82 FR 44586, 44606–07 (Sept. 25, 2017). E:\FR\FM\31JAN1.SGM 31JAN1 amozie on DSK3GDR082PROD with NOTICES1 666 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices values into the following ranges: 20 percent to less than 30 percent; 30 percent to less than 40 percent; and 50 percent to less than 60 percent. In addition, the Bureau proposed to bottom-code reported debt-to-income ratio values under 20 percent and to top-code reported debt-to-income ratios of 60 percent or higher. The Bureau initially determined that disclosing reported debt-to-income ratio would likely disclose information about the applicant or borrower that is not otherwise public and may be harmful or sensitive and that, for certain debt-toincome ratio values, this risk would not be justified by the benefits of the disclosure in light of HMDA’s purposes.142 The Bureau also initially determined that, for many financial institutions, debt-to-income ratio of 36 percent serves as an internal underwriting benchmark, so that the ability to identify whether an applicant’s debt-toincome ratio is above or below this value would help users analyzing lending patterns to control for factors that might provide a legitimate explanation for disparities in credit or pricing decisions. The Bureau sought comment on whether the benefits of disclosing more granular information concerning debt-to-income ratio values at or around 36 percent would justify the risks to applicant and borrower privacy such disclosure would likely create, and how such information should be disclosed. An industry commenter expressed support for the Bureau’s proposed treatment of debt-to-income ratio. A group of consumer advocate commenters expressed general support for the Bureau’s proposal and also urged the Bureau to adopt more granular disclosure of debt-to-income ratio values near 36 percent, agreeing with the Bureau that 36 percent is a common underwriting benchmark. An industry commenter expressed opposition to the Bureau’s proposal to bin debt-to-income ratio values into ranges, arguing that the Bureau should disclose debt-to-income ratio without modification. According to the commenter, binning reduces the utility of the data, thereby hampering understanding of lending practices. The commenter added that misuse of the data would be ‘‘almost impossible’’ because, if property address were not disclosed, as the Bureau proposed, re142 See id. at 44606 (describing the utility of debtto-income ratio in light of HMDA’s purposes, including helping the public and public officials to determine whether financial institutions are serving the housing needs of their communities and to identify possible discriminatory lending patterns and enforce antidiscrimination statutes). VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 identification of applicants and borrowers would be extremely difficult. The Bureau finds that the industry commenter underestimates the reidentification risk associated with the HMDA data, even modified as proposed. The Bureau determines that the existence of various regulatory, guarantor, and investment program benchmarks justifies disclosing exact debt-to-income ratio values between 40 and 50 percent, for the reasons set forth in more detail in the proposal.143 Further, based on the comment from a group of consumer advocates and further analysis, the Bureau finds that a 36 percent debt-to-income ratio serves as an internal underwriting benchmark for many lenders. The ability to identify whether an applicant’s debt-to-income ratio is at or above this level therefore also would help data users control for factors that might provide a legitimate explanation for disparities in credit and pricing decisions. The Bureau determines that the best way to allow users to determine whether a value is at or above this benchmark is to extend the range of debt-to-income values disclosed without modification from ‘‘greater than or equal to 40 percent and less than 50 percent’’ to ‘‘greater than or equal to 36 percent and less than 50 percent.’’ The Bureau believes that the modifications the Bureau intends to apply will reduce the privacy risks created by the public disclosure of debtto-income ratio while preserving much of the benefits of the data field. The Bureau intends to disclose debtto-income ratio as proposed, except that it intends to disclose without modification debt-to-income ratio values greater than or equal to 36 percent and less than 50 percent instead of greater than or equal to 40 percent and less than 50 percent. The Bureau intends to bin reported debt-to-income ratio values into the following ranges: 20 percent to less than 30 percent; 30 percent to less than 36 percent; and 50 percent to less than 60 percent. The Bureau also intends to bottom-code reported debt-to-income ratio values under 20 percent and to top-code reported debt-to-income ratios of 60 percent or higher. For the reasons discussed above and in the proposal, the Bureau determines, based on the information currently available to it, that the disclosure of reported debt-toincome ratio values greater than or equal to 36 percent and less than 50 percent, and the modifications it intends to apply to other reported debtto-income ratio values, appropriately balance the privacy risks that would 143 See PO 00000 id. at 44606–07. Frm 00021 Fmt 4703 Sfmt 4703 likely be created by the disclosure of this field and the benefits of such disclosure in light of HMDA’s purposes. Total Units and Affordable Units Regulation C requires financial institutions to report the total number of individual dwelling units related to the property securing the covered loan or, in the case of an application, proposed to secure the covered loan (total units).144 Regulation C also requires financial institutions to report, for properties that include multifamily dwellings, the number of affordable units related to the property. The rule defines affordable units as individual dwelling units related to the property that are income-restricted pursuant to Federal, State, or local affordable housing programs.145 The rule defines ‘‘multifamily dwelling’’ as a dwelling, regardless of construction method, that contains five or more individual dwelling units.146 The total units and affordable units data fields were not reported fields prior to the 2015 HMDA Final Rule; the Bureau added them to the 2015 HMDA Final Rule using its discretionary authority provided by the Dodd-Frank Act’s amendment to HMDA to require the reporting of ‘‘such other information as the Bureau may require.’’ 147 Prior to the 2015 HMDA Final Rule, however, data users could determine whether a property was a multifamily property, because the ‘‘property type’’ data field— which was eliminated under the 2015 HMDA Final Rule—included a code for ‘‘multifamily.’’ Property type was disclosed to the public without modification under the Board’s disclosure regime. The Bureau proposed to disclose these data fields to the public as reported.148 The Bureau initially determined that disclosing these data fields would likely present low risk to applicant and borrower privacy, and, to the extent that disclosing these fields would create risk to applicant and borrower privacy, that the risks would 144 12 CFR 1003.4(a)(31). CFR 1003.4(a)(32). Insured depository institutions and insured credit unions are not required to report affordable units for loans or applications that are partially exempt under the EGRRCPA. See 83 FR 45325, 45329 (Sept. 7, 2018). 146 12 CFR 1003.2(n). Under Regulation C, a covered loan is secured by a multifamily dwelling if it is secured by the entire multifamily dwelling; thus, a loan to purchase an entire apartment building or condominium building would be a loan secured by a multifamily dwelling, while a loan to purchase an individual condominium in that building would not be. Comment 2(n)–3. 147 12 U.S.C. 2803(b)(6)(J). 148 82 FR 44586, 44597–99 (Sept. 25, 2017). 145 12 E:\FR\FM\31JAN1.SGM 31JAN1 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices be justified by the benefits of disclosure in light of HMDA’s purposes.149 Several consumer advocate commenters supported the Bureau’s proposal to disclose without modification these data fields. One consumer advocate commenter stated that multifamily loan data, in general, would help the public assess how lending practices affect low- and moderate-income tenants. This commenter also stated that data on total units would help data users determine how many households are affected by a loan and that the data on affordable units would provide valuable information about the financing of affordable housing. An industry commenter opposed the proposal to disclose total units and affordable units for multifamily loans. This commenter stated that disclosure of this data for multifamily loans would create a heightened risk of reidentification, because the number of units and number of affordable units can vary widely across multifamily properties and therefore may allow identification of specific properties. The commenter requested that, for multifamily loans only, the Bureau exclude these data fields from the publicly available HMDA data if the relevant geographic area does not include enough multifamily loans to protect against re-identification, although the commenter did not specify the minimum number of loans necessary to do so. The commenter further recommended that, if there is a sufficient number of multifamily loans to protect against re-identification, the Bureau should disclose total units binned into ranges—the commenter suggested bins of 5 to 49 and 50 and above—and disclose the value reported for the number of affordable units as a percentage of the number of total units. Based on these comments and the additional analysis described below in this paragraph, the Bureau believes that disclosing without modification reported values for total units of 5 and above in the loan-level HMDA data would likely substantially facilitate the re-identification of applicants or borrowers and that this risk would not be justified by the benefits of disclosure. amozie on DSK3GDR082PROD with NOTICES1 149 Id. at 44598 (describing in light of HMDA’s purposes the utility of total units and affordable units—along with the other data fields that the Bureau proposed to disclose without modification on the basis that they present low privacy risk— including helping the public and public officials to determine whether financial institutions are serving the housing needs of their communities, to distribute public-sector investment so as to attract private investment to areas where it is needed, and to identify possible discriminatory lending patterns and enforce antidiscrimination statutes). VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 The Bureau determines that multifamily loans are somewhat more unique than other loans in the data and that, in many cases, an adversary could match the reported total units for multifamily loans with publicly available information about the number of units in a multifamily property, because this information is widely available to the public from sources including public records and real estate websites. For these reasons, the Bureau intends to modify the loan-level HMDA data disclosed to the public so that total units are binned into the following ranges: 5 to 24; 25 to 49; 50 to 99; 100 to 149; and 150 and over. The Bureau further determines that these modifications will reduce reidentification risk while preserving much of the benefit from disclosing this field, as data users will still be able to approximate with some precision how many units a particular transaction affects. Additionally, under the Bureau’s approach, the bins for total units will align with the bins used by HUD’s Rental Housing Finance Survey—the preeminent Federal data source on rental housing finance characteristics— allowing users to analyze HMDA data in combination with data from that survey to further HMDA’s purposes. The Bureau determines, based on the information currently available to it, that these modifications appropriately balance the privacy risks that would likely be created by the disclosure of this field and the benefits of such disclosure in light of HMDA’s purposes. The Bureau declines to adopt the bins suggested by the commenter—5 to 49 and 50 and over—because the Bureau concludes that these bins would provide insufficient precision regarding the number of housing units a transaction affects. The Bureau believes that the bins it is adopting better balance the privacy risks and disclosure benefits associated with the disclosure of this field. The Bureau determines that disclosure in the loan-level HMDA data of affordable units creates minimal risk, if any, of substantially facilitating the reidentification of applicants and borrowers in the HMDA data. However, it determines that, under certain circumstances, disclosure without modification of affordable units would undermine the privacy protection that binning total units achieves and that this risk is not justified by the benefits of disclosure. To reduce this risk, the Bureau intends to disclose affordable units as a percentage of the value reported for total units, rounded to the nearest whole number. The Bureau determines that this modification PO 00000 Frm 00022 Fmt 4703 Sfmt 4703 667 appropriately balances the privacy risks that would likely be created by the disclosure of this field and the benefits of such disclosure in light of HMDA’s purposes. Nationwide Mortgage Licensing System and Registry Identifier Regulation C requires financial institutions to report the unique identifier the Nationwide Mortgage Licensing System and Registry (NMLSR ID) assigned to the mortgage loan originator, as defined in Regulation G, 12 CFR 1007.102, or Regulation H, 12 CFR 1008.23, as applicable.150 The NMLSR ID must be reported in numeric form, such as 123450.151 In the 2015 HMDA Final Rule, the Bureau added the requirement to report the NMLSR ID to implement the Dodd-Frank Act’s requirement that financial institutions report, ‘‘as the Bureau may determine to be appropriate, a unique identifier that identifies the loan originator as set forth in section 1503 of the [Secure and Fair Enforcement for] Mortgage Licensing Act of 2008.’’ 152 The Bureau proposed to modify the loan-level HMDA data disclosed to the public by excluding the NMLSR ID.153 The Bureau initially determined that disclosing the NMLSR ID in the loanlevel HMDA data released to the public would likely substantially facilitate the re-identification of an applicant or borrower and that this risk would not be justified by the benefits of the disclosure in light of HMDA’s purposes.154 Several industry commenters and a group of consumer advocate commenters expressed support for the Bureau’s proposal to exclude the NMLSR ID. The consumer advocate commenters also recommended that, in place of the NMLSR ID for the individual mortgage loan originator, the Bureau disclose the applicable NMLSR ID for the loan originator’s company or branch. According to these commenters, disclosing the company or branch identifier would eliminate reidentification risk while helping data users assess the practices of mortgage brokers in the mortgage lending market, which these commenters described as a critical but hidden facet of the market. 150 12 CFR 1003.4(a)(34). Insured depository institutions and insured credit unions are not required to report NMLSR ID for loans or applications that are partially exempt under the EGRRCPA. 83 FR 45325, 45329 (Sept. 7, 2018). 151 FIG, supra note 55, at 107–08. 152 12 U.S.C. 2803(b)(6)(F). 153 82 FR 44586, 44608–09 (Sept. 25, 2017). 154 See id. (describing the utility of NMLSR ID in light of HMDA’s purposes, including helping the public and public officials to identify possible discriminatory lending patterns and enforcing antidiscrimination statutes). E:\FR\FM\31JAN1.SGM 31JAN1 668 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices amozie on DSK3GDR082PROD with NOTICES1 The Bureau does not intend to disclose the NMLSR ID for the loan originator’s company or branch as some commenters suggested. As discussed in the proposal, the Bureau believes the NMLSR ID for a loan originator would substantially facilitate re-identification of the HMDA data because it is required to appear on various documents associated with the loan, including the security instrument, and many jurisdictions publicly disclose these real estate transaction records in an identified form.155 For companies or branches with small numbers of mortgage loan originators, disclosing the company or branch identifier may allow adversaries to narrow the potential mortgage loan originator NMLSR IDs for the loan, which would create similar reidentification concerns. Further, the HMDA data reported to the Bureau will not contain the NMLSR ID for the loan originator’s company or branch. Because mortgage loan originators may work out of multiple branches, assigning the correct branch identifier may not be possible. The Bureau intends to modify the loan-level HMDA data disclosed to the public by excluding the NMLSR ID, as proposed. For the reasons discussed above and in more detail in the proposal, the Bureau determines, based on the information currently available to it, that this modification appropriately balances the privacy risks that would likely be created by the disclosure of this field and the benefits of such disclosure in light of HMDA’s purposes. Automated Underwriting System Result Regulation C requires that, except for purchased covered loans, financial institutions report ‘‘the name of the automated underwriting system used by the financial institution to evaluate the application and the result generated by that automated underwriting system.’’ 156 Regulation C defines ‘‘automated underwriting system’’ for the purposes of this requirement as ‘‘an electronic tool developed by a securitizer, Federal government insurer, or Federal government guarantor . . . that provides a result regarding the credit risk of the applicant and whether the covered loan is eligible to be originated, purchased, insured, or guaranteed by that securitizer, Federal government insurer, or Federal government guarantor.’’ 157 Financial 155 Id. 156 12 CFR 1003.4(a)(35)(i). Insured depository institutions and insured credit unions are not required to report these data fields for loans or applications that are partially exempt under the EGRRCPA. See 83 FR 45325, 45329 (Sept. 7, 2018). 157 12 CFR 1003.4(a)(35)(ii). VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 institutions report a code from a specified list to indicate the result or results generated by the AUS or AUSs used.158 Financial institutions may report up to five AUS names and five AUS results.159 The Bureau added these requirements in the 2015 HMDA Final Rule using its discretionary authority provided by the Dodd-Frank Act’s amendment to HMDA to require the reporting of ‘‘such other information as the Bureau may require.’’ 160 The Bureau proposed to modify the loan-level HMDA data disclosed to the public by excluding AUS result.161 The Bureau initially determined that disclosing AUS result in the public HMDA data would likely disclose information about the applicant or borrower that is not otherwise public and may be harmful or sensitive and that this risk would not be justified by the benefits of the disclosure in light of HMDA’s purposes.162 A few industry commenters supported the Bureau’s proposal to exclude AUS result from the public HMDA data. Two AUS owner commenters also supported the Bureau’s proposal to exclude AUS result, agreeing with the Bureau’s assessment that AUS results are sensitive. These commenters also incorporated by reference comments they submitted in connection with the 2015 HMDA Final Rule in which they expressed concern that AUS result could be used to reverse-engineer proprietary information about how AUSs are designed. A group of consumer advocate commenters opposed the Bureau’s proposal to exclude AUS result. The commenters disagreed with the Bureau’s assessment that the benefits of disclosing AUS result do not justify the privacy risks that may be created by such disclosure. The commenters stated that AUS result can aid significantly in fair lending analysis by helping data users determine whether similarly situated borrowers were treated 158 FIG, supra note 55, at 109–10. AUS result is reported using the following codes: Code 1— Approve/Eligible; Code 2—Approve/Ineligible; Code 3—Refer/Eligible; Code 4—Refer/Ineligible; Code 5—Refer with Caution; Code 6—Out of Scope; Code 7—Error; Code 8—Accept; Code 9—Caution; Code 10—Ineligible; Code 11—Incomplete; Code 12—Invalid; Code 13—Refer; Code 14—Eligible; Code 15—Unable to Determine or Unknown; Code 16—Other; Code 17—Not applicable; Code 1111— Exempt. Id. 159 Comment 4(a)(35)–3.iv. 160 12 U.S.C. 2803(b)(6)(J). 161 82 FR 44586, 44609 (Sept. 25, 2017). 162 Id. (describing the utility of AUS result in light of HMDA’s purposes, including helping the public and public officials to identify possible discriminatory lending patterns and enforce antidiscrimination statutes). PO 00000 Frm 00023 Fmt 4703 Sfmt 4703 differently due to race, gender, or age. The commenters also stated that the codes for AUS result—such as ‘‘Approve/Ineligible,’’ ‘‘Ineligible,’’ or ‘‘Incomplete’’—would not reflect any more negatively on applicants than the fact of a loan application denial.163 An industry commenter also opposed the Bureau’s proposal. The commenter stated that it would be extremely difficult to re-identify applicants or borrowers using AUS result because it is not available in other public databases, and that sensitivity alone should not be a basis for withholding data from the public where re-identification risk is low. The commenter stated further that AUS result is critically important in identifying possible discriminatory lending patterns, enforcing antidiscrimination statutes, understanding lenders’ underwriting decisions, and determining whether financial institutions are serving the housing needs of their communities. The Bureau determines that disclosing AUS result in the public HMDA data would likely disclose information about the applicant or borrower that is not otherwise public and may be harmful or sensitive. The Bureau finds that the industry commenter that opposed the Bureau’s proposal underestimated the reidentification risk associated with the HMDA data, even modified as proposed, and that, where re-identification risk is present, sensitivity alone is a basis for modification under the balancing test. The Bureau further finds that the consumer advocate commenters understated the sensitivity of AUS result data. As the Bureau explained in the proposal, if a HMDA record were associated with an identified applicant or borrower, disclosure of a ‘‘negative’’ AUS result would reveal information that would likely be perceived as reflecting negatively on the applicant’s or borrower’s willingness or ability to pay.164 Most consumers would consider such information sensitive and disclosure of this information could lead to dignity harm or embarrassment. The Bureau also determines that scam artists and other bad actors could use this field to target marketing to applicants or borrowers to try to take advantage of vulnerable consumers. The Bureau determines these privacy risks are not justified by the benefits of disclosure. 163 As noted above, the Bureau proposed to disclose data on the action taken by the financial institution—which includes information that a consumer’s application was denied—without modification. Id. at 44597–99. 164 Id. at 44609. E:\FR\FM\31JAN1.SGM 31JAN1 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices The Bureau intends to exclude AUS result from the public HMDA data, as proposed. For the reasons discussed above and in the proposal, the Bureau determines, based on the information currently available to it, that excluding AUS result from the public HMDA data appropriately balances the privacy risks that may be created by the disclosure of this field and the benefits of such disclosure in light of HMDA’s purposes. amozie on DSK3GDR082PROD with NOTICES1 Free-Form Text Fields Regulation C requires financial institutions to use free-form text fields to report certain data. Free-form text fields are unique in the HMDA data reported to the Bureau because they allow the reporting of any information, rather than certain specified types of numbers or codes. Free-form text fields must be used to report the name and version of the credit scoring model used, reasons for denial, AUS system name, and AUS result where the financial institution reports a code indicating that a non-listed value applies, and the fields may also be used to report certain ethnicity and race information, if provided by the applicant or borrower.165 Free-form text fields used to report race and ethnicity must be completed by applicants; all other free-form text fields must be completed by the financial institution.166 The maximum number of characters for the AUS system name, AUS result, and reasons for denial freeform text fields, including spaces, is 255; the maximum number of characters including spaces for all other free-form text fields is 100.167 The Bureau proposed to modify the loan-level HMDA data disclosed to the public by excluding these free-form text fields.168 The Bureau initially determined that free-form text fields would allow the reporting of any information, including information that creates risks to applicant and borrower privacy, and that, given the amount of HMDA data reported each year, it would not be feasible for the Bureau to review the contents of each free-form text field submitted before disclosing the loanlevel HMDA data to the public. The Bureau initially determined that excluding free-form text fields is a modification to the public loan-level 165 See FIG, supra note 55, at 85–86 (ethnicity), 88–89 (race), 96 (name and version of credit scoring model used), 98 (reasons for denial), 108–09 (AUS system name), and 110 (AUS result). Insured depository institutions and insured credit unions are not required to report these data fields for loans or applications that are partially exempt under the EGRRCPA. See 83 FR 45325, 45329 (Sept. 7, 2018). 166 Id. 167 Id. 168 82 FR 44586, 44609–10 (Sept. 25, 2017). VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 HMDA data that appropriately balances the risks to applicant and borrower privacy and the benefits of disclosure in light of HMDA’s purposes.169 Two industry commenters supported the Bureau’s proposal to exclude freeform text fields. A group of consumer advocate commenters requested that the Bureau clarify that financial institutions cannot use the free-form text field to report a reason for denial if the reason for denial can be reported using an available code. The Bureau intends to exclude freeform text fields from the public HMDA data, as proposed. For the reasons discussed above and in the proposal, the Bureau determines, based on the information currently available to it, that excluding free-form text fields from the public HMDA data appropriately balances the privacy risks that may be created by the disclosure of this field and the benefits of such disclosure in light of HMDA’s purposes.170 Inclusion of Multifamily Loan Data One industry commenter recommended that the Bureau not disclose any loan-level data concerning loans secured by multifamily dwellings. The commenter stated that all data reported for these applications and loans should be excluded from the loanlevel data made available to the public because HMDA’s principal focus is single-family consumer-purpose mortgage transactions; the data required to be reported are inapplicable to multifamily loans; and multifamily lending differs from consumer-purpose single-family lending (e.g., because different criteria is considered in underwriting). The Bureau declines to categorically exclude multifamily loan data from the public HMDA data. As noted above, HMDA requires that HMDA data be made available to the public except as the Bureau determines necessary to protect applicant and borrower privacy interests.171 Because the Bureau determines that most of the HMDA data create low, if any, privacy risk, and that any risks are justified by the benefits in 169 Id. 170 The consumer advocate commenters’ request seeks clarification about a matter unrelated to the subject of this final policy guidance, which is the disclosure of loan-level HMDA data. For information about how reasons for denial should be reported, see 12 CFR 1003.4(a)(16), Comment 4(a)(16)–1 through –4, and the FIG, supra note 55, at 96–98. 171 See supra note 18 and accompanying text; part IV.A (responding to comments suggesting that the Bureau exclude from the public data or disclose only in aggregate form all HMDA data or all new data required to be reported under the 2015 HMDA Final Rule). PO 00000 Frm 00024 Fmt 4703 Sfmt 4703 669 light of HMDA’s purposes, excluding all multifamily loan data would be inconsistent with the statute and the balancing test. In addition, multifamily loans have always been included in the public HMDA data and Regulation C exempts lenders, on a data field-by-data field basis, from reporting data that is inapplicable to multifamily loans. Further, the Bureau concludes that the differences between single-family and multifamily loans do not reduce the value of public multifamily loan data for advancing HMDA’s purposes, especially considering that multifamily housing is a vital component of the nation’s housing stock. C. Other Comments Received Additional Data Prior to the 2015 HMDA Final Rule, Regulation C required financial institutions to report the location of the property to which the loan or application relates, by MSA or by Metropolitan Division, by State, by county, and by census tract, if the institution has a home or branch office in that MSA or Metropolitan Division. To reduce burden on financial institutions, the 2015 HMDA Final Rule eliminated from this provision the requirement to report the MSA or Metropolitan Division in which the property is located.172 The Bureau proposed to identify in the public data, for each loan and application that would have been subject to this provision prior to the 2015 HMDA Final Rule, the MSA or Metropolitan Division in which the property securing or proposed to secure the loan is located. The Bureau received no comments on this proposal. For each loan and application with respect to which the financial institution reports property location information, the Bureau intends to identify in the public data the applicable MSA or Metropolitan Division.173 The FFIEC has historically included with its annual loan-level disclosure of all reported HMDA data the following census and income data: (1) Population (total population in tract); (2) Minority Population Percent (percentage of minority population to total population for tract, carried to two decimal places); (3) FFIEC Median Family Income (FFIEC Median family income in dollars for the MSA/MD in which the tract is 172 12 CFR 1003.4(a)(9)(ii) (effective Jan. 1, 2018); 80 FR 66128, 66187 (Oct. 28, 2015). 173 If applicable, the MSA or Metropolitan Division will be included in the annual loan-level disclosure of all reported HMDA data combined, rather than in the modified loan/application register for each financial institution. E:\FR\FM\31JAN1.SGM 31JAN1 amozie on DSK3GDR082PROD with NOTICES1 670 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices located (adjusted annually by FFIEC)); (4) Tract to MSA/MD Median Family Income Percentage (percentage of tract median family income compared to MSA/MD median family income, carried to two decimal places); (5) Number of Owner Occupied Units (number of dwellings, including individual condominiums, that are lived in by the owner); and (6) Number of 1to 4-Family units (dwellings that are built to house fewer than five families). These data are intended to provide additional context to the reported HMDA data. The Bureau proposed to continue to include these data in the combined loan-level HMDA data disclosed to the public. A group of consumer advocate commenters supported the proposal to continue to include the census and income data the FFIEC historically has included with its annual loan-level disclosure of all reported HMDA data. These commenters stated that the Minority Population Percent data can be incomplete as a demographic indicator and that disclosing the percentages of African-American and Hispanic populations separately would allow for a more accurate picture of the experience of geographic areas and neighborhoods in lending markets. These commenters also stated that, although neighborhoods with predominantly Asian residents are currently not as widespread as predominantly Hispanic and AfricanAmerican neighborhoods, adding the percentage of Asians living in each census tract would be valuable in some major markets. The Bureau intends that the census and income data historically included with the annual loan-level disclosure of all reported HMDA continues to be included with this disclosure. The Bureau will consider whether to recommend that the FFIEC add to these data the more granular minority population percentage data the consumer advocate commenters requested. Issuance of this final policy guidance does not require that a determination be made concerning the addition of the more granular data to the FFIEC’s annual loan-level disclosure. The FFIEC historically also has included with its annual loan-level disclosure of all reported HMDA an application date indicator reflecting whether the application date was before January 1, 2004, on or after January 1, 2004, or not available. The Bureau stated in the proposal that it believed the application date indicator for preand post-January 2004 is no longer useful to the analysis of the HMDA data and therefore proposed to no longer VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 include the indicator in the combined loan-level HMDA data disclosed to the public. The Bureau received no comments concerning the application date indicator. The Bureau intends that the application date indicator historically included with the annual loan-level disclosure of all reported HMDA data is no longer included with this disclosure. Restricted Access Program The Bureau stated in the proposal that, as it had previously indicated in the supplementary information to the 2015 HMDA Final Rule, it believed HMDA’s public disclosure purposes may be furthered by allowing industry and community researchers and academics to access the unmodified HMDA data through a restricted access program, for research purposes. The Bureau did not propose to establish a restricted access program but rather stated in the proposal that it continued to evaluate whether access to unmodified HMDA data should be permitted through such a program, the options for such a program, and the risks and costs that may be associated with such a program. Two industry commenters expressed concerns that such a program would create risk that the data would be misused or subject to a data breach. A group of consumer advocate commenters supported such a program and offered specific suggestions concerning how it should be structured. The Bureau will take these comments into consideration as it continues to evaluate access to unmodified HMDA data through a restricted access program. Issuance of this final policy guidance does not require that a determination be made concerning a restricted access program. Legislative Rulemaking A group of industry commenters asserted that HMDA requires the Bureau to use a legislative rulemaking under the APA, rather than policy guidance, to identify the modifications to be applied to the loan-level HMDA data before it is disclosed to the public and suggested that the Bureau delay public disclosure of the data until such rulemaking is complete. Another industry commenter expressed concern that the Bureau did not use a rulemaking to determine the HMDA data to be disclosed to the public and stated that the Bureau should not disclose any new HMDA data until such a rulemaking is undertaken. The Bureau determines that its adoption of the balancing test in the 2015 HMDA Final Rule satisfies its obligations under HMDA; HMDA does PO 00000 Frm 00025 Fmt 4703 Sfmt 4703 not require a legislative rulemaking to identify modifications to the public HMDA data. As discussed in more detail in the proposal,174 in the 2015 HMDA Final Rule, the Bureau interpreted HMDA, as amended by the Dodd-Frank Act, to require that the Bureau use a balancing test to determine whether and how HMDA data should be modified prior to public disclosure to protect applicant and borrower privacy while also fulfilling HMDA’s public disclosure purposes. The Bureau interpreted HMDA to require that public HMDA data be modified when the disclosure of the unmodified data creates risks to applicant and borrower privacy interests that are not justified by the benefits of such disclosure in light of the statutory purposes.175 This interpretation implemented HMDA sections 304(h)(1)(E) and 304(h)(3)(B) because it prescribed standards for requiring modification of itemized information, for the purpose of protecting the privacy interests of mortgage applicants and borrowers, that is or will be available to the public.176 The final policy guidance applies the balancing test to determine whether and how to modify the HMDA data reported under the 2015 HMDA Final Rule before it is disclosed on the loan level to the public. Nonetheless, as noted above, even though it is not required to do so as a matter of law, the Bureau has decided that it would be beneficial to undergo a separate notice and comment legislative rulemaking under the APA to determine what HMDA data will be disclosed in future years. The Bureau will commence such a rulemaking in May 2019. Data Collection and Reporting Under the 2015 HMDA Final Rule and Related Data Security Concerns Several industry commenters raised concerns with the data collection and reporting requirements imposed on financial institutions by the 2015 HMDA Final Rule, and one consumer advocate commenter requested that the Bureau require the collection and reporting of additional data. These comments are outside the scope of the proposed policy guidance, which concerned only the public disclosure of data collected and reported, not the collection and reporting itself.177 As 174 See 175 80 82 FR 44586, 44589 (Sept. 25, 2017). FR 66128, 66134 (Oct. 28, 2015). 176 Id. 177 The Bureau noted in the proposed policy guidance that the proposal did not reopen any portion of the 2015 HMDA Final Rule, as the Bureau did not intend, in the policy guidance, to revisit any decisions made in that rulemaking. See 82 FR 44586, 44587 (Sept. 25, 2017). E:\FR\FM\31JAN1.SGM 31JAN1 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices mentioned above, the Bureau intends to reconsider aspects of the 2015 HMDA Final Rule. Concerns about the data required to be collected and reported under Regulation C are more appropriately raised in comments submitted in connection with that rulemaking. Several industry commenters also raised data security concerns related to the collection and reporting of HMDA data, including concerns with the system lenders use to submit their HMDA data to the Bureau and the Bureau’s ability to protect the data during transmission and storage. A few of these commenters urged the Bureau to publish the details of its information security practices and procedures to address these concerns. One industry commenter suggested that financial institutions would be liable for a data breach at the Bureau that exposed nonpublic HMDA data, and also that financial institutions would be required to mitigate damages incurred by their customers as a result of such a breach. Again, these comments are outside the scope of the proposed policy guidance, which concerns the Bureau’s intentional disclosure of HMDA data to the public as required by the statute. No comments received on the proposed policy guidance addressed data security concerns raised by the Bureau’s proposed disclosure of HMDA data as required by HMDA. amozie on DSK3GDR082PROD with NOTICES1 Public Education A group of industry commenters expressed concern that applicants do not understand why financial institutions must ask for certain sensitive information and report the information to the Bureau, and why such information may be publicly disclosed. These commenters suggested that explanatory information provided at the time of application would be especially helpful, and asked that the Bureau consult with industry and engage in educational efforts concerning the purposes and requirements of HMDA. A group of consumer advocate commenters requested that the Bureau produce materials to help data users understand the HMDA data to be made public and in what form. These commenters suggested that the Bureau update a chart it has previously made public, describing the HMDA data to be collected and reported, to reflect if and how the data will be made available to the public. The Bureau will consider, as it does in the ordinary course of its business, whether to address the concerns expressed in these comments. VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 V. Regulatory Requirements The Bureau concludes that the final policy guidance on Disclosure of LoanLevel HMDA Data is a non-binding general statement of policy and/or a rule of agency organization, procedure, or practice exempt from notice and comment rulemaking requirements under the APA pursuant to 5 U.S.C. 553(b). Because no notice of proposed rulemaking was required, the Regulatory Flexibility Act does not require an initial or final regulatory flexibility analysis.178 The existing information collections contained in Regulation C have been approved by the Office of Management and Budget (OMB) and assigned OMB control number 3170– 0008. The Bureau determines that this final policy guidance does not impose any new or revise any existing recordkeeping, reporting, or disclosure requirements on covered entities or members of the public that would be collections of information requiring OMB approval under the Paperwork Reduction Act, 44 U.S.C. 3501, et seq. The Bureau has a continuing interest in the public’s opinions regarding this determination. At any time, comments regarding this determination may be sent to the Bureau of Consumer Financial Protection (Attention: PRA Office), 1700 G Street NW, Washington DC 20552, or by email to CFPB_Public_ PRA@cfpb.gov. The Bureau stated these conclusions in the proposed policy guidance and did not receive any comments on them. VI. Congressional Review Act Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), the Bureau plans to submit a report containing this policy guidance and other required information to each House of the Congress and the Comptroller General. The Bureau plans to make such a submission at least 60 days prior to the date the Bureau will first publish loanlevel HMDA data consistent with this policy guidance. The Bureau expects to publish such information on March 29, 2019. The Office of Information and Regulatory Affairs has designated this policy guidance as a ‘‘major rule’’ under 5 U.S.C. 804(2). VII. Final Policy Guidance on Disclosure of Loan-Level HMDA Data The text of the final policy guidance is as follows: 178 5 PO 00000 U.S.C. 603(a), 604(a). Frm 00026 Fmt 4703 Sfmt 4703 671 Policy Guidance on Disclosure of LoanLevel HMDA Data A. Background The Home Mortgage Disclosure Act (HMDA), 12 U.S.C. 2801 et seq., requires certain financial institutions to collect, report, and disclose data about their mortgage lending activity. HMDA is implemented by Regulation C, 12 CFR part 1003. HMDA identifies its purposes as providing the public and public officials with sufficient information to enable them to determine whether financial institutions are serving the housing needs of the communities in which they are located, and to assist public officials in their determination of the distribution of public sector investments in a manner designed to improve the private investment environment.179 In 1989, the Board of Governors of the Federal Reserve System (Board) recognized a third HMDA purpose of identifying possible discriminatory lending patterns and enforcing antidiscrimination statutes, which now appears with HMDA’s other purposes in Regulation C.180 In 2010, Congress enacted the DoddFrank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).181 Among other changes, the Dodd-Frank Act expanded the scope of information relating to mortgage applications and loans that must be collected, reported, and disclosed under HMDA and authorized the Bureau to require by rule financial institutions to collect, report, and disclose additional information. The Dodd-Frank Act amendments to HMDA also added new section 304(h)(1)(E), which directs the Bureau to develop regulations, in consultation with the agencies identified in section 304(h)(2),182 that ‘‘modify or require modification of itemized information, for the purpose of protecting the privacy interests of the mortgage applicants or mortgagors, that is or will be available to the public.’’ Section 304(h)(3)(B), also added by the Dodd-Frank Act, directs 179 12 U.S.C. 2801(b). Home Mortgage Disclosure, 54 FR 51356, 51357 (Dec. 15, 1989) (recognizing the purpose of identifying possible discriminatory lending patterns and enforcing antidiscrimination statutes in light of the 1989 amendments to HMDA, which mandated the reporting of the race, sex, and income of loan applicants). 181 Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111–203, 124 Stat. 1376, 1980, 2035–38, 2097–101 (2010). 182 These agencies are the prudential regulators— the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency—the Department of Housing and Urban Development. Together with the Bureau, these agencies are referred to herein as ‘‘the agencies.’’ 180 See E:\FR\FM\31JAN1.SGM 31JAN1 amozie on DSK3GDR082PROD with NOTICES1 672 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices the Bureau of Consumer Financial Protection (Bureau) to ‘‘prescribe standards for any modification under paragraph (1)(E) to effectuate the purposes of [HMDA], in light of the privacy interests of mortgage applicants or mortgagors. Where necessary to protect the privacy interests of mortgage applicants or mortgagors, the Bureau shall provide for the disclosure of information . . . in aggregate or other reasonably modified form, in order to effectuate the purposes of [HMDA].’’ 183 On October 28, 2015, the Bureau published a final rule amending Regulation C (2015 HMDA Final Rule) to implement the Dodd-Frank Act amendments and make other changes, including adding a number of new data points.184 Most provisions of the 2015 HMDA Final Rule took effect on January 1, 2018,185 and apply to data financial institutions collect beginning in 2018 and report beginning in 2019. information, for the purpose of protecting the privacy interests of mortgage applicants and borrowers, that is or will be available to the public.186 The Bureau has applied the balancing test to determine whether and how to modify the HMDA data reported under the 2015 HMDA Final Rule before it is disclosed on the loan level to the public. This policy guidance describes the loanlevel HMDA data that the Bureau intends to make available to the public beginning in 2019, with respect to data compiled by financial institutions in or after 2018, including modifications that the Bureau intends to apply to the data. This policy guidance is exempt from notice and comment rulemaking requirements under the Administrative Procedure Act pursuant to 5 U.S.C. 553(b) and is non-binding. B. The Balancing Test In the 2015 HMDA Final Rule, in consultation with the agencies and after notice and comment, the Bureau interpreted HMDA, as amended by the Dodd-Frank Act, to require that the Bureau use a balancing test to determine whether and how HMDA data should be modified prior to its disclosure to the public to protect applicant and borrower privacy while also fulfilling HMDA’s public disclosure purposes. The Bureau interpreted HMDA to require that public HMDA data be modified when the release of the unmodified data creates risks to applicant and borrower privacy interests that are not justified by the benefits of such release to the public in light of HMDA’s purposes. In such circumstances, the need to protect the privacy interests of mortgage applicants or mortgagors requires that the itemized information be modified. This binding interpretation implemented HMDA sections 304(h)(1)(E) and 304(h)(3)(B) because it prescribed standards for requiring modification of itemized The Bureau intends to publicly disclose loan-level HMDA data reported pursuant to the 2015 HMDA Final Rule as follows: 1. Except as provided in paragraphs 2 through 8 below, the Bureau intends to disclose all data as reported, without modification. 2. The Bureau intends to exclude the following from the public loan-level HMDA data: a. Universal loan identifier, collected pursuant to 12 CFR 1003.4(a)(1)(i), or non-universal loan identifier, collected pursuant to 83 FR 45325, 45330 (Sept. 7, 2018); b. The date the application was received or the date shown on the application form, collected pursuant to 12 CFR 1003.4(a)(1)(ii); c. The date of action taken by the financial institution on a covered loan or application, collected pursuant to 12 CFR 1003.4(a)(8)(ii); d. The address of the property securing the loan or, in the case of an application, proposed to secure the loan, collected pursuant to 12 CFR 1003.4(a)(9)(i); e. The credit score or scores relied on in making the credit decision, collected pursuant to 12 CFR 1003.4(a)(15)(i); f. The unique identifier assigned by the Nationwide Mortgage Licensing System and Registry for the mortgage loan originator, as defined in Regulation G, 12 CFR 1007.102, or Regulation H, 12 CFR 1008.23, as applicable, collected pursuant to 12 CFR 1003.4(a)(34); g. The result generated by the automated underwriting system used by the financial institution to evaluate the 183 Section 304(h)(3)(A) provides that a modification under section 304(h)(1)(E) shall apply to information concerning ‘‘(i) credit score data . . . in a manner that is consistent with the purpose described in paragraph (1)(E); and (ii) age or any other category of data described in paragraph (5) or (6) of subsection (b), as the Bureau determines to be necessary to satisfy the purpose described in paragraph (1)(E), and in a manner consistent with that purpose.’’ 12 U.S.C. 2803(h)(3)(A). 184 See generally Home Mortgage Disclosure (Regulation C), 80 FR 66128 (Oct. 28, 2015); see also Home Mortgage Disclosure (Regulation C), 80 FR 69567 (Nov. 10, 2015) (making technical corrections). 185 Certain amendments to the definition of financial institution went into effect on January 1, 2017. See 12 CFR 1003.2 (effective Jan. 1, 2017); 80 FR 66128, 66308 (Oct. 28, 2015). VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 C. Loan-Level HMDA Data To Be Disclosed to the Public 186 80 PO 00000 FR 66128, 66134 (Oct. 28, 2015). Frm 00027 Fmt 4703 Sfmt 4703 application, collected pursuant to 12 CFR 1003.4(a)(35)(i); and h. Free-form text fields used to report the following data: Applicant or borrower race, collected pursuant to 12 CFR 1003.4(a)(10)(i); applicant or borrower ethnicity, collected pursuant to 12 CFR 1003.4(a)(10)(i); name and version of the credit scoring model used to generate each credit score or credit scores relied on in making the credit decision, collected pursuant to 12 CFR 1003.4(a)(15)(i); the principal reason or reasons the financial institution denied the application, if applicable, collected pursuant to 12 CFR 1003.4(a)(16); and automated underwriting system name, collected pursuant to 12 CFR 1003.4(a)(35)(i). 3. With respect to the amount of the covered loan or the amount applied for, collected pursuant to 12 CFR 1003.4(a)(7), the Bureau intends to: a. Disclose the midpoint for the $10,000 interval into which the reported value falls, e.g., for a reported value of $117,834, disclose $115,000 as the midpoint between values equal to $110,000 and less than $120,000; and b. Indicate where possible whether the reported value exceeds the applicable dollar amount limitation on the original principal obligation in effect at the time of application or origination as provided under 12 U.S.C. 1717(b)(2) and 12 U.S.C. 1454(a)(2). 4. With respect to the age of an applicant or borrower, collected pursuant to 12 CFR 1003.4(a)(10)(ii), the Bureau intends to: a. Bin reported values into the following ranges, as applicable: 25 to 34; 35 to 44; 45 to 54; 55 to 64; and 65 to 74; b. Bottom-code reported values under 25; c. Top-code reported values over 74; and d. Indicate whether the reported value is 62 or higher. 5. With respect to the ratio of the applicant’s or borrower’s total monthly debt to the total monthly income relied on in making the credit decision, collected pursuant to 12 CFR 1003.4(a)(23), the Bureau intends to: a. Bin reported values into the following ranges, as applicable: 20 percent to less than 30 percent; 30 percent to less than 36 percent; and 50 percent to less than 60 percent; b. Bottom-code reported values under 20 percent; c. Top-code reported values of 60 percent or higher; and d. Disclose, without modification, reported values greater than or equal to 36 percent and less than 50 percent. E:\FR\FM\31JAN1.SGM 31JAN1 Federal Register / Vol. 84, No. 21 / Thursday, January 31, 2019 / Notices 6. With respect to the value of the property securing the covered loan or, in the case of an application, proposed to secure the covered loan, collected pursuant to 12 CFR 1003.4(a)(28), the Bureau intends to disclose the midpoint for the $10,000 interval into which the reported value falls, e.g., for a reported value of $117,834, disclose $115,000 as the midpoint between values equal to $110,000 and less than $120,000. 7. With respect to the number of individual dwelling units related to the property securing the covered loan or, in the case of an application, proposed to secure the covered loan, collected pursuant to 12 CFR 1003.4(a)(31), the Bureau intends to: a. Bin reported values into the following ranges, as applicable: 5 to 24; 25 to 49; 50 to 99; and 100 to 149; b. Top-code reported values over 149; and c. Disclose, without modification, reported values below 5. 8. With respect to the number of individual dwelling units related to the property that are income-restricted pursuant to Federal, State, or local affordable housing programs, collected pursuant to 12 CFR 1003.4(a)(32), the Bureau intends to disclose reported values as a percentage, rounded to the nearest whole number, of the value collected pursuant to 12 CFR 1003.4(a)(31). Dated: December 20, 2018. Kathleen Kraninger, Director, Bureau of Consumer Financial Protection. [FR Doc. 2018–28404 Filed 1–30–19; 8:45 am] BILLING CODE 4810–AM–P CORPORATION FOR NATIONAL AND COMMUNITY SERVICE Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Employers of National Service Enrollment Form and Employers of National Service Annual Survey; Proposed Information Collection; Comment Request Comments Corporation for National and Community Service. ACTION: Notice. amozie on DSK3GDR082PROD with NOTICES1 AGENCY: The Corporation for National and Community Service (CNCS) has submitted a public information collection request (ICR) entitled Employers of National Service Enrollment Form and Annual Survey for review and approval in accordance with the Paperwork Reduction Act. SUMMARY: VerDate Sep<11>2014 20:21 Jan 30, 2019 Jkt 247001 Comments may be submitted, identified by the title of the information collection activity, by March 4, 2019. ADDRESSES: Comments may be submitted, identified by the title of the information collection activity, to the Office of Information and Regulatory Affairs, Attn: Ms. Sharon Mar, OMB Desk Officer for the Corporation for National and Community Service, by any of the following two methods within 30 days from the date of publication in the Federal Register: (1) By fax to: 202–395–6974, Attention: Ms. Sharon Mar, OMB Desk Officer for the Corporation for National and Community Service; or (2) By email to: smar@omb.eop.gov. FOR FURTHER INFORMATION CONTACT: Copies of this ICR, with applicable supporting documentation, may be obtained by calling the Corporation for National and Community Service, Sharron A. Walker-Tendai, at 202–606– 6930 or by email to Stendai@cns.gov. Individuals who use a telecommunications device for the deaf (TTY–TDD) may call 1–800–833–3722 between 8:00 a.m. and 8:00 p.m. Eastern Time, Monday through Friday. SUPPLEMENTARY INFORMATION: The OMB is particularly interested in comments which: • Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of CNCS, including whether the information will have practical utility; • Evaluate the accuracy of the agency’s estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions; • Propose ways to enhance the quality, utility, and clarity of the information to be collected; and • Propose ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology. DATES: A 60-day Notice requesting public comment was published in the Federal Register on October 17, 2018 at Vol. 83, No. 201, Pg. 52419–52420. This comment period ended December 17, 2018. No public comments were received. Title of Collection: Employers of National Service Enrollment Form and Employers of National Service Annual Survey. PO 00000 Frm 00028 Fmt 4703 Sfmt 9990 673 OMB Control Number: 3045–0175. Type of Review: Renewal and addition of second instrument. Respondents/Affected Public: Any organization that seeks to be or is an Employer of National Service program, including businesses, nonprofits, institutions of higher education, school districts, state/local governments, and federal agencies. Total Estimated Number of Annual Responses: 1180. Total Estimated Number of Annual Burden Hours: 490. Abstract: This is a request to renew the Employers of National Service Enrollment Form and add an additional related instrument, the Employers of National Service Annual Survey. Organizations from all sectors either seeking to become or already established Employers of National Service will be filling out these forms, including businesses, nonprofits, institutions of higher education, school districts, state/local governments, and federal agencies. The key purpose of the enrollment form is to document what the organization is committing to doing as an Employer of National Service and provide contact information to CNCS. The information gathered on the enrollment form will also allow CNCS to display the organization’s information accurately online as a resource for job seekers. It will also enable CNCS to speak to the diversity within the program’s membership, both for internal planning and external audience use. The purpose of the survey form is to track what actions an employer has taken in the past year, gather stories of success or impact, collect quantitative hiring data relating to AmeriCorps and Peace Corps alumni, and provide organizations with an opportunity to update their contact and location data. CNCS seeks to renew the current information collection. The revisions are intended to reflect feedback from those outside CNCS. The information collection will otherwise be used in the same manner as the existing application. CNCS also seeks to continue using the current application until the revised application is approved by OMB. The current application is due to expire on March 31, 2019. Dated: December 21, 2018. Sharron A. Walker-Tendai, Program Support Specialist. [FR Doc. 2019–00440 Filed 1–30–19; 8:45 am] BILLING CODE 6050–28–P E:\FR\FM\31JAN1.SGM 31JAN1

Agencies

[Federal Register Volume 84, Number 21 (Thursday, January 31, 2019)]
[Notices]
[Pages 649-673]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-28404]


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BUREAU OF CONSUMER FINANCIAL PROTECTION

[Docket No. CFPB-2017-0025]


Disclosure of Loan-Level HMDA Data

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Final policy guidance.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is 
issuing final policy guidance describing modifications that the Bureau 
intends to apply to the loan-level data that financial institutions 
report under the Home Mortgage Disclosure Act (HMDA) and Regulation C 
before the data is disclosed to the public. This final policy guidance 
applies to HMDA data compiled by financial institutions in or after 
2018 and made available to the public by the Bureau beginning in 2019.

DATES: The Bureau released this final policy guidance on its website on 
December 21, 2018.

FOR FURTHER INFORMATION CONTACT: Benjamin Cady and David Jacobs, 
Counsels; Laura Stack, Senior Counsel, Office of Regulations, at 202-
435-7700 or https://reginquiries.consumerfinance.gov/. If you require 
this document in an alternative electronic format, please contact 
CFPB_Accessibility@cfpb.gov.

SUPPLEMENTARY INFORMATION:

I. Summary

    HMDA requires certain financial institutions to collect, report, 
and disclose data about their mortgage lending activity. HMDA is 
implemented by Regulation C, 12 CFR part 1003. In 2010, the Dodd-Frank 
Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended 
HMDA and transferred HMDA rulemaking authority and other functions from 
the Board of Governors of the Federal Reserve System (Board) to the 
Bureau. Among other changes, the Dodd-Frank Act expanded the scope of 
information relating to mortgage applications and loans that must be 
collected, reported, and disclosed under HMDA and authorized the Bureau 
to require by rule financial institutions to collect, report, and 
disclose additional information. In 2015, the Bureau published a final 
rule amending Regulation C (2015 HMDA Final Rule) to implement the 
Dodd-Frank Act amendments to HMDA and make other changes, including 
adding a number of new data points. Most provisions of the 2015 HMDA 
Final Rule took effect on January 1, 2018, and apply to data financial 
institutions collect beginning in 2018 and report beginning in 2019. 
With respect to the public disclosure of HMDA data, the Bureau 
interpreted HMDA, as amended by the Dodd-Frank Act, to require that the 
Bureau use a balancing test to determine whether and how HMDA data 
should be modified prior to its disclosure to protect applicant and 
borrower privacy while also fulfilling HMDA's public disclosure 
purposes. On September 25, 2017, the Bureau published proposed policy 
guidance that described the Bureau's balancing test and how the Bureau 
proposed to apply it to the loan-level HMDA data made available to the 
public.\1\
---------------------------------------------------------------------------

    \1\ Disclosure of Loan-Level HMDA Data, 82 FR 44586 (Sept. 25, 
2017) (hereinafter Proposed Policy Guidance).
---------------------------------------------------------------------------

    After considering the comments the Bureau received on the proposal, 
the Bureau is publishing this final policy guidance describing the 
loan-level HMDA data it intends to make available to the public, 
including modifications to be applied to the data. The Bureau intends 
to make these modifications to data financial institutions collected in 
2018 when the Bureau discloses that data in 2019. The Bureau is making 
these determinations based upon the information currently available to 
it, including the comments received on the proposal, with respect to 
the risks and benefits associated with the disclosure of loan-level 
HMDA data. The Bureau intends to commence a rulemaking in the spring of 
2019 that will enable it to identify more definitively modifications to 
the data that the Bureau determines to be appropriate under the 
balancing test and incorporate these modifications into a legislative 
rule. The rulemaking will reconsider the determinations reflected in 
this final policy guidance based upon the Bureau's experience 
administering the final policy guidance in 2019 and on a new rulemaking 
record, including data concerning the privacy risks posed by the 
disclosure of the HMDA data and the benefits of such disclosure in 
light of HMDA's purposes.
    In developing this final policy guidance, the Bureau consulted with 
the prudential regulators (the Board, the Federal Deposit Insurance 
Corporation (FDIC), the National Credit Union Administration (NCUA), 
and the Office of the Comptroller of the Currency (OCC)); the 
Department of Housing and Urban Development (HUD); and the Federal 
Housing Finance Agency (FHFA).
    For the reasons described below and in the proposed policy 
guidance,\2\ the Bureau is modifying its proposed policy guidance to 
change the proposed

[[Page 650]]

treatment of the following data fields: (1) The ratio of the 
applicant's or borrower's total monthly debt to the total monthly 
income relied on in making the credit decision; (2) the number of 
individual dwelling units related to the property securing the covered 
loan or, in the case of an application, proposed to secure the covered 
loan; and (3) the number of individual dwelling units related to the 
property securing the covered loan or, in the case of an application, 
proposed to secure the covered loan, that are income-restricted 
pursuant to Federal, State, or local affordable housing programs.
---------------------------------------------------------------------------

    \2\ See id. at 44596-44610.
---------------------------------------------------------------------------

    Pursuant to this final policy guidance, the Bureau intends to 
disclose loan-level HMDA data reported under Regulation C with the 
following modifications to the data: First, the Bureau intends to 
modify the public loan-level HMDA data to exclude: (1) The universal 
loan identifier or non-universal loan identifier; (2) the date the 
application was received or the date shown on the application form; (3) 
the date of action taken by the financial institution on a covered loan 
or application; (4) the address of the property securing the covered 
loan or, in the case of an application, proposed to secure the covered 
loan; (5) the credit score or scores relied on in making the credit 
decision; (6) the unique identifier assigned by the Nationwide Mortgage 
Licensing System and Registry for the mortgage loan originator; and (7) 
the result generated by the automated underwriting system used by the 
financial institution to evaluate the application. The Bureau also 
intends to exclude free-form text fields used to report the following 
data: (1) Applicant or borrower race; (2) applicant or borrower 
ethnicity; (3) the name and version of the credit scoring model used; 
(4) the principal reason or reasons the financial institution denied 
the application, if applicable; and (5) the automated underwriting 
system name.
    Second, the Bureau intends to modify the public loan-level HMDA 
data to reduce the precision of most of the values reported for the 
following data fields. With respect to the amount of the loan or the 
amount applied for, the Bureau intends to disclose the midpoint for the 
$10,000 interval into which the reported value falls. The Bureau also 
intends to indicate whether the reported value exceeds the applicable 
dollar amount limitation on the original principal obligation in effect 
at the time of application or origination, as provided under 12 U.S.C. 
1717(b)(2) and 12 U.S.C. 1454(a)(2). With respect to the age of an 
applicant or borrower, the Bureau intends to bin reported values into 
the following ranges: 25 to 34; 35 to 44; 45 to 54; 55 to 64; and 65 to 
74; bottom-code reported values under 25; top-code reported values over 
74; and indicate whether the reported value is 62 or higher.\3\ With 
respect to the ratio of the applicant's or borrower's total monthly 
debt to the total monthly income relied on in making the credit 
decision, the Bureau intends to disclose without modification reported 
values greater than or equal to 36 percent and less than 50 percent. 
The Bureau also intends to bin reported values into the following 
ranges: 20 percent to less than 30 percent; 30 percent to less than 36 
percent; and 50 percent to less than 60 percent; bottom-code reported 
values under 20 percent; and top-code reported values of 60 percent or 
higher. With respect to the value of the property securing the covered 
loan or, in the case of an application, proposed to secure the covered 
loan, the Bureau intends to disclose the midpoint for the $10,000 
interval into which the reported value falls. With respect to the 
number of individual dwelling units related to the property securing 
the covered loan or, in the case of an application, proposed to secure 
the covered loan, the Bureau intends to bin reported values into the 
following ranges: 5 to 24; 25 to 49; 50 to 99; 100 to 149; and 150 and 
over. And with respect to the number of individual dwelling units 
related to the property securing the covered loan or, in the case of an 
application, proposed to secure the covered loan, that are income-
restricted pursuant to Federal, State, or local affordable housing 
programs, the Bureau intends to disclose reported values as a 
percentage, rounded to the nearest whole number, of the value reported 
for the total number of individual dwelling units related to the 
property securing the covered loan.
---------------------------------------------------------------------------

    \3\ Binning, sometimes known as recoding or interval recoding, 
allows data to be shown clustered into ranges rather than as precise 
values. Top- and bottom-coding mask any value that is above or below 
a certain threshold.
---------------------------------------------------------------------------

    This final policy guidance is exempt from notice and comment 
rulemaking requirements under the Administrative Procedure Act (APA), 5 
U.S.C. 553(b), and is non-binding. As previously noted, the Bureau 
believes that it is beneficial to commence a separate notice and 
comment legislative rulemaking under the APA to consider and adopt a 
more definitive approach to disclosing HMDA data to the public in 
future years. The Bureau will commence such a rulemaking in May 2019.

II. Background

A. HMDA's Purposes and the Public Disclosure of HMDA Data

    HMDA requires certain financial institutions to collect, report, 
and disclose data about their mortgage lending activity. The home 
mortgage market is the country's largest market for consumer financial 
products and services, with $10 trillion in mortgage debt 
outstanding.\4\ Homeownership is a critical source of wealth-building 
for families and communities. As of 2016, 48 million consumers had a 
mortgage, representing 64 percent of all owner-occupied homes.\5\
---------------------------------------------------------------------------

    \4\ FRED Economic Data, ``Mortgage Debt Outstanding by Type of 
Property: One- to Four-Family Residences (MDOTP1T4FR),'' Fed. Res. 
Bank of St. Louis, Bd. of Govs. of the Fed. Res. Sys., https://fred.stlouisfed.org/series/MDOTP1T4FR (last updated Sept. 24, 2018).
    \5\ U.S. Census Bureau, ``Selected Housing Characteristics: 
2012-2016 American Community Survey 5-Year Estimates,'' https://factfinder.census.gov/bkmk/table/1.0/en/ACS/16_5YR/DP04/0100000US 
(last visited Dec. 3, 2018).
---------------------------------------------------------------------------

    HMDA is implemented by Regulation C, 12 CFR part 1003. HMDA 
identifies its purposes as providing the public and public officials 
with sufficient information to enable them to determine whether 
financial institutions are serving the housing needs of the communities 
in which they are located, and to assist public officials in their 
determination of the distribution of public sector investments in a 
manner designed to improve the private investment environment.\6\ In 
1989, following amendments to HMDA, the Board recognized a third HMDA 
purpose of identifying possible discriminatory lending patterns and 
enforcing antidiscrimination statutes, which now appears with HMDA's 
other purposes in Regulation C.\7\ Today, HMDA data are the preeminent 
data source that regulators, researchers, economists, industry, and 
advocates use to achieve HMDA's purposes and to analyze the mortgage 
market.
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    \6\ 12 U.S.C. 2801(b).
    \7\ See Home Mortgage Disclosure, 54 FR 51356, 51357 (Dec. 15, 
1989) (recognizing the purpose of identifying possible 
discriminatory lending patterns and enforcing antidiscrimination 
statutes in light of the 1989 amendments to HMDA, which mandated the 
reporting of the race, sex, and income of loan applicants).
---------------------------------------------------------------------------

    Public disclosure of HMDA data is central to the achievement of 
HMDA's purposes. Since HMDA's enactment in 1975, the data that 
financial institutions are required to disclose under HMDA and 
Regulation C have been expanded; public access to HMDA data has 
increased; and the formats in which HMDA data have been disclosed have 
evolved. As enacted and implemented

[[Page 651]]

in Regulation C, HMDA required covered financial institutions to make 
available to the public at their home and branch offices a ``disclosure 
statement'' reflecting aggregates of certain mortgage loan data.\8\ In 
1980, Congress amended HMDA section 304 to require that the Federal 
Financial Institutions Examination Council (FFIEC) implement a system 
to increase public access to the data required to be disclosed under 
the statute, including a ``central depository of data'' in each 
metropolitan statistical area (MSA). The 1980 HMDA amendments also 
required the FFIEC to compile annually, for each MSA, aggregate data by 
census tract for all financial institutions required to disclose data 
under HMDA. The 1980 amendments further required the FFIEC to produce 
tables indicating, for each MSA, aggregate lending patterns for various 
categories of census tracts grouped according to location, age of 
housing stock, income level, and racial characteristics.\9\
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    \8\ Home Mortgage Disclosure Act of 1975, Public Law 94-200, 
section 304, 89 Stat. 1124, 1125-28 (Dec. 31, 1975); 12 CFR 
203.5(a)(1) (effective June 28, 1976).
    \9\ Housing and Community Development Act of 1980, Public Law 
96-399, section 340, 94 Stat. 1614, 1657-59 (1980).
---------------------------------------------------------------------------

    In 1989, Congress amended HMDA to require that financial 
institutions collect, report, and disclose data concerning the race, 
sex, and income of applicants and borrowers, as well as data on loan 
applications, in addition to originations and purchases.\10\ In 
implementing these amendments in Regulation C, the Board required 
financial institutions to report HMDA data to Federal regulators on a 
loan-by-loan and application-by-application basis using the ``loan/
application register'' format.\11\ In 1990, the FFIEC issued a notice 
announcing that it would make all reported HMDA data available to the 
public in a loan-level format, after deleting three fields to protect 
applicant and borrower privacy: application or loan number, application 
date, and action taken date.\12\ The FFIEC stated that it believed 
public disclosure of the reported loan-level HMDA data to be 
``consistent with the congressional intent to maximize the utilization 
of lending data.'' \13\ The FFIEC first disclosed the reported loan-
level HMDA data to the public in October 1991.
---------------------------------------------------------------------------

    \10\ Financial Institutions Reform, Recovery and Enforcement Act 
(FIRREA), Public Law 101-73, section 1211, 103 Stat. 183, 524-26 
(1989).
    \11\ 54 FR 51356, 51361 (Dec. 15, 1989).
    \12\ Home Mortgage Disclosure Act; Disclosure Statements and 
Aggregate MSA Reports; Availability of Data, 55 FR 27886, 27888 
(July 6, 1990).
    \13\ Id.
---------------------------------------------------------------------------

    In 1992, Congress amended HMDA to add section 304(j), which 
required that each financial institution make available to the public 
its ``loan application register information'' for each year as early as 
March 31 of the succeeding year, as required under regulations 
prescribed by the Board.\14\ The Board implemented this amendment by 
requiring that financial institutions make their ``modified'' loan/
application registers available to the public after deleting the same 
three fields deleted from the loan-level HMDA data disclosed by the 
FFIEC.\15\
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    \14\ Housing and Community Development Act, Public Law 102-550, 
section 932, 106 Stat. 3672, 3889-91 (1992).
    \15\ 12 CFR 203.5(a)-(e) (effective Mar. 1, 1993).
---------------------------------------------------------------------------

B. The Dodd-Frank Act and Amendments to HMDA and Regulation C

    In 2010, the Dodd-Frank Act amended HMDA and transferred HMDA 
rulemaking authority and other functions from the Board to the 
Bureau.\16\ Among other changes, the Dodd-Frank Act expanded the scope 
of information relating to mortgage applications and loans that must be 
collected, reported, and disclosed under HMDA and authorized the Bureau 
to require by rule financial institutions to collect, report, and 
disclose additional information. The Dodd-Frank Act amendments to HMDA 
also added new section 304(h)(1)(E), which directs the Bureau to 
develop regulations, in consultation with the agencies identified in 
section 304(h)(2),\17\ that ``modify or require modification of 
itemized information, for the purpose of protecting the privacy 
interests of the mortgage applicants or mortgagors, that is or will be 
available to the public.'' Section 304(h)(3)(B), also added by the 
Dodd-Frank Act, directs the Bureau to ``prescribe standards for any 
modification under paragraph (1)(E) to effectuate the purposes of 
[HMDA], in light of the privacy interests of mortgage applicants or 
mortgagors. Where necessary to protect the privacy interests of 
mortgage applicants or mortgagors, the Bureau shall provide for the 
disclosure of information . . . in aggregate or other reasonably 
modified form, in order to effectuate the purposes of [HMDA].'' \18\
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    \16\ Dodd-Frank Wall Street Reform and Consumer Protection Act, 
Public Law 111-203, 124 Stat. 1376, 1980, 2035-38, 2097-2101 (2010).
    \17\ These agencies are the prudential regulators--the Board, 
the FDIC, the NCUA, and the OCC--and HUD. Together with the Bureau, 
these agencies are referred to herein as ``the agencies.''
    \18\ Section 304(h)(3)(A) provides that a modification under 
section 304(h)(1)(E) shall apply to information concerning ``(i) 
credit score data . . . in a manner that is consistent with the 
purpose described in paragraph (1)(E); and (ii) age or any other 
category of data described in paragraph (5) or (6) of subsection 
(b), as the Bureau determines to be necessary to satisfy the purpose 
described in paragraph (1)(E), and in a manner consistent with that 
purpose.'' 12 U.S.C. 2803(h)(3)(A).
---------------------------------------------------------------------------

    On October 28, 2015, the Bureau published the 2015 HMDA Final Rule 
to implement the Dodd-Frank Act amendments and make other changes, 
including adding a number of new data points.\19\ Most provisions of 
the 2015 HMDA Final Rule took effect on January 1, 2018, and apply to 
data financial institutions collect beginning in 2018 and report 
beginning in 2019. The 2015 HMDA Final Rule addressed the public 
disclosure of HMDA data in two ways.
---------------------------------------------------------------------------

    \19\ Home Mortgage Disclosure (Regulation C), 80 FR 66128 (Oct. 
28, 2015); see also Home Mortgage Disclosure (Regulation C), 80 FR 
69567 (Nov. 10, 2015) (making technical corrections).
---------------------------------------------------------------------------

    First, the 2015 HMDA Final Rule shifted public disclosure of HMDA 
data entirely to the agencies. Beginning with HMDA data compiled in 
2017, financial institutions were no longer required to provide their 
modified loan/application registers and disclosure statements directly 
to the public. Instead, they were required only to provide a notice 
advising members of the public seeking their data that the data may be 
obtained on the Bureau's website. In addition to reducing burden on 
financial institutions, this shift of responsibility to the agencies 
eliminated risks to financial institutions associated with errors in 
preparing their modified loan/application registers that could result 
in the unintended disclosure of data. This shift of responsibility also 
permitted the Bureau to consider modifications to protect applicant and 
borrower privacy that preserve data utility but that may be burdensome 
for financial institutions to implement. Finally, this shift of 
responsibility allowed for easier adjustment of modifications as 
privacy risks and potential uses of HMDA data evolve.
    Second, the Bureau interpreted HMDA, as amended by the Dodd-Frank 
Act, to require that the Bureau use a balancing test to determine 
whether and how HMDA data should be modified prior to its disclosure to 
the public to protect applicant and borrower privacy while also 
fulfilling HMDA's public disclosure purposes. The Bureau interpreted 
HMDA to require that public HMDA data be modified when the release of 
the unmodified data creates risks to applicant and borrower privacy

[[Page 652]]

interests that are not justified by the benefits of such release to the 
public in light of HMDA's statutory purposes.\20\ The 2015 HMDA Final 
Rule's interpretation of HMDA section 304(h)(1)(E) and 304(h)(3)(B) to 
require a balancing test imposed binding obligations on the Bureau to 
evaluate the HMDA data, individually and in combination, to assess 
whether and how HMDA data should be modified prior to its disclosure to 
the public to protect applicant and borrower privacy while also 
fulfilling HMDA's public disclosure purposes.
---------------------------------------------------------------------------

    \20\ 80 FR 66128, 66134 (Oct. 28, 2015).
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    On September 25, 2017, the Bureau published proposed policy 
guidance that described the Bureau's balancing test and how the Bureau 
proposed to apply it to the loan-level HMDA data made available to the 
public beginning in 2019, with respect to data compiled by lenders in 
or after 2018.\21\
---------------------------------------------------------------------------

    \21\ See 82 FR 44586 (Sept. 25, 2017).
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    On May 24, 2018, the President signed into law the Economic Growth, 
Regulatory Relief, and Consumer Protection Act (EGRRCPA), which amended 
HMDA by adding partial exemptions from HMDA's data collection and 
reporting requirements for certain insured depository institutions and 
insured credit unions.\22\ On September 7, 2018, the Bureau published 
an interpretive and procedural rule to implement and clarify the 
EGRRCPA's requirements (2018 HMDA Final Rule).\23\ Among other things, 
the Bureau clarified that institutions covered by a partial exemption 
have the option of reporting exempt data points as long as they report 
all data fields that the specific data point comprises. The Bureau also 
clarified which of the data points in Regulation C are covered by the 
partial exemptions.\24\ The partial exemptions apply beginning with the 
2018 HMDA data, which institutions must report to the Bureau by March 
1, 2019.
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    \22\ Economic Growth, Regulatory Relief, and Consumer Protection 
Act, Public Law 115-174, section 104(a), 132 Stat. 1296 (2018). The 
EGRRCPA provided, among other things, that the requirements of HMDA 
section 304(b)(5) and (6) (which requires collection and reporting 
of certain data points and provides the Bureau discretion to require 
additional data points) shall not apply to closed-end mortgage loans 
of an insured depository institution or insured credit union if the 
institution originated fewer than 500 closed-end mortgage loans in 
each of the two preceding calendar years. The EGRRCPA also included 
a similar exemption with respect to open-end lines of credit.
    \23\ Partial Exemptions from the Requirements of the Home 
Mortgage Disclosure Act Under the Economic Growth, Regulatory 
Relief, and Consumer Protection Act (Regulation C), 83 FR 45325 
(Sept. 7, 2018).
    \24\ The Bureau interpreted the partial exemption to cover 26 of 
the 48 HMDA data points, including 12 data points that the Bureau 
added to Regulation C in the 2015 HMDA Final Rule to implement data 
points specifically identified in HMDA section 304(b)(5)(A) through 
(C) or (b)(6)(A) through (I), and 14 data points that were not found 
in Regulation C prior to the Dodd-Frank Act and that the Bureau 
required in the 2015 HMDA Final Rule pursuant to its discretionary 
authority under HMDA sections 304(b)(5)(D) and (b)(6)(J).
---------------------------------------------------------------------------

III. The Balancing Test

    As noted above, in the 2015 HMDA Final Rule, the Bureau interpreted 
HMDA to require that public HMDA data be modified when the disclosure 
of the unmodified data creates risks to applicant and borrower privacy 
interests that are not justified by the benefits of such disclosure to 
the public in light of HMDA's purposes. The Bureau included in the 
proposed policy guidance a detailed description of the balancing test 
and its proposed application, including the benefits of public 
disclosure, the risks to applicant and borrower privacy that may be 
created by public disclosure, and the Bureau's approach to balancing 
these benefits and risks, including through modifying some of the data 
to be disclosed.
    As described in more detail in the proposal,\25\ under the 
balancing test, the disclosure of the loan-level HMDA dataset creates 
risks to applicant and borrower privacy interests only where: (1) At 
least one data field or a combination of data fields substantially 
facilitates the identification of an applicant or borrower, and (2) at 
least one data field or combination of data fields discloses 
information about the applicant or borrower that is not otherwise 
public and may be harmful or sensitive. At the individual data field 
level, a field may create ``re-identification risk'' by substantially 
facilitating the identification of an applicant or borrower in the HMDA 
data (for example, because it may be used to match a HMDA record to an 
identified record), or may create ``risk of harm or sensitivity'' by 
disclosing information about the applicant or borrower that is not 
otherwise public and may be harmful or sensitive.\26\
---------------------------------------------------------------------------

    \25\ See 82 FR 44586, 44590 (Sept. 25, 2017).
    \26\ See id. at 44592-95.
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    Where the public disclosure of the unmodified loan-level HMDA 
dataset would create risks to applicant and borrower privacy, the 
balancing test requires that the Bureau consider the benefits of 
disclosure to HMDA's purposes and, where these benefits do not justify 
the privacy risks the disclosure would create, modify the dataset to 
appropriately balance the privacy risks and disclosure benefits. An 
individual data field is a candidate for potential modification under 
the balancing test if its disclosure in unmodified form would create a 
risk of re-identification or a risk of harm or sensitivity.
    The Bureau explained in the proposal that, with respect to the HMDA 
data that financial institutions will report to the agencies under the 
2015 HMDA Final Rule, it initially determined public disclosure of the 
unmodified loan-level dataset, as a whole, would create risks to 
applicant and borrower privacy interests. The Bureau stated that this 
was due to the presence in the dataset of individual data fields that 
the Bureau believed would create re-identification risk and the 
presence of individual data fields that the Bureau believed are not 
currently public and would create a risk of harm or sensitivity. The 
Bureau thus applied the balancing test to determine whether and how it 
should modify the HMDA data financial institutions must collect and 
report under the 2015 HMDA Final Rule before it is disclosed to the 
public. Based on its analysis, the Bureau initially determined it would 
have to modify the loan-level HMDA data before it disclosed that data 
to the public. The Bureau also stated it initially determined the 
modifications to the loan-level HMDA dataset proposed in the proposed 
policy guidance would reduce risks to applicant and borrower privacy 
and appropriately balance them with the benefits of disclosure for 
HMDA's purposes.
    For the reasons described below and in the proposed policy 
guidance,\27\ the Bureau is modifying its proposed policy guidance to 
change the proposed treatment of the following data fields: (1) The 
ratio of the applicant's or borrower's total monthly debt to the total 
monthly income relied on in making the credit decision (debt-to-income 
ratio); (2) the number of individual dwelling units related to the 
property securing the covered loan or, in the case of an application, 
proposed to secure the covered loan (total units); and (3) the number 
of individual dwelling units related to the property securing the 
covered loan or, in the case of an application, proposed to secure the 
covered loan, that are income-restricted pursuant to Federal, State, or 
local affordable housing programs (affordable units). The Bureau 
determines that public disclosure of the unmodified loan-level dataset, 
as a whole, would create risks to applicant and borrower privacy 
interests and that the loan-level HMDA data must be modified before the 
data is disclosed to

[[Page 653]]

the public. The Bureau further determines, based on the information 
currently available to it, that the modifications described in this 
final policy guidance will reduce risks to applicant and borrower 
privacy and appropriately balance them with the benefits of disclosure 
in light of HMDA's purposes. This final policy guidance describes the 
data the Bureau intends to disclose on each financial institution's 
modified loan/application register as well as in the combined loan-
level data the agencies make available to the public each year.\28\
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    \27\ See id. at 44596-44610.
    \28\ As described below in part IV.B and C, the Bureau will not 
include on the modified loan/application registers (1) an indication 
of whether the reported loan amount exceeds the applicable dollar 
amount limitation on the original principal obligation in effect at 
the time of application or origination as provided under 12 U.S.C. 
1717(b)(2) and 12 U.S.C. 1454(a)(2) or (2) information about the MSA 
or Metropolitan Division in which the property securing or proposed 
to secure the loan is located. This information will be included in 
the annual loan-level disclosure of all reported HMDA data combined.
---------------------------------------------------------------------------

IV. Comments Received and the Bureau's Responses

    The Bureau received 26 comments on the proposed policy guidance. 
These included general comments on the Bureau's proposal; views on the 
proposed treatment of particular data fields; and comments on other 
topics. The majority of the comments received did not address how the 
Bureau should treat specific data fields, and many comments opposing or 
expressing concern with the Bureau's proposal did not provide any 
evidence or analysis in support of their positions.

A. General Comments Concerning the Application of the Balancing Test to 
Loan-Level HMDA Data

Comments Received
    Several industry commenters generally stated that the Bureau's 
proposal did not sufficiently address the privacy risks posed by the 
disclosure of HMDA data, but many of these commenters offered little 
evidence or analysis to support their views or specific suggestions to 
address their concerns. A few industry commenters stated that the HMDA 
data the Bureau proposed to disclose would be highly re-identifiable. 
They also stated that the new data fields required under the 2015 HMDA 
Final Rule increased this re-identification risk compared to the data 
publicly disclosed under the disclosure regime adopted by the Board in 
implementing the 1992 amendments to HMDA (the Board's disclosure 
regime).\29\ A group of industry commenters stated that over 80 percent 
of loans publicly disclosed under the Board's disclosure regime could 
be re-identified and that the addition of the new data fields increases 
the possibility of re-identification to ``virtually 100%.'' \30\ These 
commenters also suggested that the amount of HMDA data the Bureau 
proposed to disclose would create incentives to re-identify the data. 
Several industry commenters stated that technological advances increase 
the ease with which public HMDA data can be re-identified. One industry 
commenter stated that the Bureau had underestimated adversaries' \31\ 
motives to re-identify the HMDA data and that the Bureau's proposal 
downplayed the risk that an adversary with personal knowledge of an 
applicant or borrower would re-identify the applicant or borrower in 
the HMDA data.
---------------------------------------------------------------------------

    \29\ 12 CFR 203.5(c) (effective Mar. 1, 1993) (identifying the 
data a financial institution must delete from its modified loan/
application register prior to making it available to the public).
    \30\ These commenters cited a 2017 research paper in support of 
their statement that attaching a borrower's name and address to a 
HMDA record can be achieved in over 80 percent of cases. See Anthony 
Yezer, ``Personal Privacy of HMDA in a World of Big Data,'' at 4 
(Geo. Wash. U., Inst. for Int'l Econ. Policy, Working Paper No. 
IIEP-WP-2017-21, 2017). In this paper, the author states that, in a 
particular census tract that he identified as presenting low re-
identification risk compared to others in the same county, he was 
able to re-identify 72 percent of borrowers with loans by the same 
lender by matching the 2014 public HMDA data to public records. Id. 
at 14-16. He also describes several projects in which academic and 
government researchers matched HMDA data to other data sources--some 
to private datasets, others to public records--and achieved up to a 
75 percent match rate. Id. at 11-14. It is unclear which research 
supports the author's claim that re-identification of HMDA data 
disclosed under the Board's disclosure regime ``can be achieved in 
over 80% of cases.'' Id. at 3.
    \31\ The Bureau used the term ``adversary'' in the proposed 
policy guidance to refer to persons that may attempt to re-identify 
the HMDA data. See, e.g., Nat'l Inst. of Standards & Tech., ``De-
Identification of Personal Information (2015),'' available at http://nvlpubs.nist.gov/nistpubs/ir/2015/NIST.IR.8053.pdf (using 
``adversary'' to refer to an entity attempting to re-identify data).
---------------------------------------------------------------------------

    A few industry commenters also expressed general concern that, if 
the HMDA data were re-identified, the data could be used to target what 
one described as ``predatory'' marketing to applicants and borrowers 
and to commit financial fraud and identity theft. Two industry 
commenters suggested that these risks were posed by the data disclosed 
under the Board's disclosure regime but that the Bureau's proposed 
disclosure of the new data fields required by the 2015 HMDA Final Rule 
increased these risks. One industry commenter stated that data the 
Bureau proposed to disclose could be used for social engineering 
attacks, such as an adversary posing as a borrower's lender. The 
commenter also stated that disclosure could undermine lenders' use of 
fraud detection measures such as authentication questions that rely on 
a customer's personal knowledge of her financial information. The 
commenter also stated that data the Bureau proposed to disclose could 
be used to identify a vacation home for purposes of theft or adverse 
possession. A group of industry commenters stated that data the Bureau 
proposed to disclose could be used by an adversary to target older 
borrowers in particular, and also would allow the public to form a very 
accurate estimate of consumers' creditworthiness. A few industry 
commenters expressed general concern that the Bureau proposed to 
disclose data consumers would consider sensitive or would like or 
expect to remain private. One industry commenter suggested that lenders 
would be subject to ``increased litigation'' if HMDA data disclosed by 
the Bureau were used for criminal purposes.
    With respect to disclosure benefits, a few industry commenters 
stated that public disclosure of the HMDA data, and in particular the 
new data required to be reported under the 2015 HMDA Final Rule, would 
not further HMDA's purposes. One industry commenter suggested that 
regulator access to HMDA data alone would be sufficient to accomplish 
HMDA's goals. This commenter and another industry commenter also stated 
that the data disclosed to the public under the Board's disclosure 
regime are sufficient to allow the public to achieve HMDA's goals. 
Another industry commenter suggested that the Bureau should publicly 
disclose limited data at first, and then later determine whether the 
information disclosed is sufficient to allow the public to achieve 
HMDA's purposes. None of these commenters specifically addressed the 
benefits of the data's public disclosure to HMDA's purposes identified 
in the proposal.
    Two industry commenters addressed the balancing of privacy risks 
and disclosure benefits. One industry commenter stated that if there is 
``any chance'' that HMDA data could be used for criminal purposes, the 
benefits of disclosure could not outweigh the privacy risks created by 
disclosure. Another industry commenter suggested that the balancing 
test requires the Bureau to modify the data to the point that re-
identification risk is ``remote,'' although the commenter did not 
elaborate on what that term means or

[[Page 654]]

what would need to be shown to meet it.
    A few industry commenters recommended that the Bureau disclose the 
new data required under the 2015 HMDA Final Rule only in aggregate 
form, and one industry commenter stated that the Bureau should not 
disclose the new data to the public at all. Another industry commenter 
suggested that the Bureau disclose all HMDA data, including data 
publicly disclosed under the Board's disclosure regime, in aggregate 
form only.
    Several commenters generally supported the Bureau's proposal. These 
commenters generally agreed with the Bureau's assessment and proposed 
balancing of privacy risks and disclosure benefits, although almost all 
of these commenters disagreed with the proposal's treatment of a few 
specific fields and advocated for greater disclosure, as discussed 
below in part IV.B. A group of consumer advocate commenters emphasized 
that loan-level HMDA data have long been publicly disclosed without any 
evidence the data has been used to harm applicants and borrowers. These 
commenters asserted that industry commenters' claims about re-
identification risk failed to account for the Bureau's proposed 
modifications and stated that the HMDA data the Bureau proposed to 
disclose would be unlikely to be used to engage in identity theft. 
These commenters also provided detailed descriptions of the benefits of 
public disclosure of HMDA data to HMDA's purposes. An industry 
commenter described HMDA data as a critical source of information for 
the public to understand the mortgage market and to analyze the impact 
of public policies on communities and borrowers. This industry 
commenter supported the expansion of the data under the 2015 HMDA Final 
Rule and the Bureau's proposal to disclose much of the new data. 
Another industry commenter similarly stated that much of the new data 
required to be reported under the 2015 HMDA Final Rule is vital to 
accurate and complete fair lending analyses and to understanding the 
housing needs of communities. An individual commenter also expressed 
support for the public availability of HMDA data, noting in particular 
the usefulness of the data to identify what the commenter described as 
``predatory'' lending.
Bureau Response
    For the reasons described below, the Bureau determines that none of 
the general comments it received provide a sufficient basis to make 
changes to the proposed policy guidance. On the other hand, as 
explained below in part IV.B, the Bureau determines that some specific 
comments it received about particular data fields provide an adequate 
basis to make changes to the proposed treatment of these fields.
    HMDA is a disclosure statute; public disclosure of HMDA data is 
central to the achievement of HMDA's goals.\32\ The Bureau 
acknowledges, as it did in the proposal, that the modifications it 
intends to apply to the loan-level HMDA data disclosed to the public 
will not completely eliminate privacy risks. Nevertheless, the Bureau 
determines that, to the extent disclosure creates risks to applicant 
and borrower privacy, such risks are justified by the benefits of such 
release to the public in light of HMDA's purposes.
---------------------------------------------------------------------------

    \32\ See 12 U.S.C. 2801(b) (``The purpose of this chapter is to 
provide the citizens and public officials of the United States with 
sufficient information'' to enable them to determine whether 
depository institutions are filling their obligations to serve the 
housing needs of the communities and neighborhoods in which they are 
located and to assist public officials in their determination of the 
distribution of public sector investments in a manner designed to 
improve the private investment environment) (emphasis added); 12 CFR 
1003.1 (``This part implements the Home Mortgage Disclosure Act, 
which is intended to provide the public with loan data that can be 
used:'' to help determine whether financial institutions are serving 
the housing needs of their communities; to assist public officials 
in distributing public-sector investment so as to attract private 
investment to areas where it is needed; and to assist in identifying 
possible discriminatory lending patterns and enforcing 
antidiscrimination statutes) (emphasis added).
---------------------------------------------------------------------------

    The public loan-level HMDA data have always displayed a high level 
of record uniqueness and included fields that are also found in 
identified public records.\33\ The Bureau believes that some degree of 
re-identification risk in connection with the public disclosure of the 
data is acceptable because HMDA requires the Bureau to consider not 
only the risk posed by disclosure, but also the benefits of disclosure 
to HMDA's purposes. The Bureau does not believe that HMDA permits it to 
modify data based solely on the existence of a ``chance'' that HMDA 
data could be used for harmful purposes, as suggested by one industry 
commenter, without considering such risk in light of the benefits of 
disclosure to HMDA's purposes. Similarly, the Bureau believes it would 
be inconsistent with HMDA to modify the public data to the point that 
re-identification risk is ``remote,'' as suggested by another industry 
commenter, instead of to the point that any privacy risk created by the 
disclosure is justified by the benefits of the data to HMDA's purposes.
---------------------------------------------------------------------------

    \33\ In 2005, researchers at the Board found that ``[m]ore than 
90 percent of the loan records in a given year's HMDA data are 
unique--that is, an individual lender reported only one loan in a 
given census tract for a specific loan amount.'' Robert B. Avery et 
al., ``New Information Reported under HMDA and Its Application in 
Fair Lending Enforcement,'' at 367, Fed. Res. Bull. (Summer 2005), 
available at http://www.federalreserve.gov/pubs/bulletin/2005/3-05hmda.pdf. In the 2017 paper cited by a group of industry 
commenters, the author described the high record uniqueness observed 
in the 2014 public HMDA data for a particular county and stated 
that, in a census tract that he identified as presenting low re-
identification risk compared to others in the county, he was able to 
re-identify 72 percent of borrowers with loans by the same lender by 
matching the public HMDA data to public records. See Yezer, supra 
note 30, at 14-16.
---------------------------------------------------------------------------

    Under the final policy guidance, the Bureau intends to modify every 
new field required under the 2015 HMDA Final Rule that it has 
identified as likely to substantially facilitate the re-identification 
of an applicant or borrower. The Bureau is also making changes to the 
proposal concerning specific data fields where commenters pointed out 
that the proposal would have left unmodified data that would 
substantially facilitate re-identification. Further, the Bureau intends 
to significantly reduce the precision of loan amount in the public 
data.\34\ Loan amount is a field that was required to be reported prior 
to the 2015 HMDA Final Rule and that the Bureau believes to be a 
significant contributor to re-identification risk in the HMDA data.
---------------------------------------------------------------------------

    \34\ Prior to the 2015 HMDA Final Rule, loan amount was reported 
rounded to the nearest thousand. Under the Board's disclosure 
regime, this field was disclosed to the public without modification. 
Consistent with its proposal and as discussed in part IV.B below, 
under the final policy guidance the Bureau intends to disclose loan 
amount binned in $10,000 intervals.
---------------------------------------------------------------------------

    The Bureau has carefully considered the risk that a potential 
adversary, such as an applicant's or borrower's neighbor or 
acquaintance, may be able to re-identify the HMDA data by relying on 
personal knowledge about the applicant or borrower. As discussed in 
more detail in the proposal,\35\ although the Bureau believes that 
location and demographic information may be more likely to be known 
than other information in the HMDA data, it is impossible to determine 
the exact content of any pre-existing personal knowledge such a 
potential adversary may possess. None of the comments provided any 
basis for the Bureau to make reliable predictions as to what this 
knowledge would be.

[[Page 655]]

This uncertainty creates challenges for evaluating the degree to which 
individual data fields contribute to the risk of re-identification by 
such a potential adversary. The Bureau initially determined that, 
because the pre-existing personal knowledge possessed by such a 
potential adversary is typically limited to information about a single 
individual, or a small number of individuals, any re-identification 
attempt by such a potential adversary would likely target or affect a 
limited number of individuals.\36\ No commenter disputed this 
statement, much less rebutted it with data or analysis.
---------------------------------------------------------------------------

    \35\ See 82 FR 44586, 44594 (Sept. 25, 2017). The Bureau noted 
that, to the extent that disclosure of census tract and demographic 
information such as ethnicity and race would create risk to 
applicant and borrower privacy, it believed the risks would be 
justified by the benefits of disclosure. Id. at 44598. As discussed 
in part IV.B, two industry commenters opposed the proposal to 
disclose without modification census tract. No commenter opposed the 
proposal to disclose without modification race and ethnicity.
    \36\ Id. at 44594.
---------------------------------------------------------------------------

    The Bureau concludes, based on the information currently available 
to it, that the HMDA data it intends to disclose under this final 
policy guidance will be of minimal value to an adversary seeking to 
perpetrate identity theft or financial fraud against applicants and 
borrowers or to engage in other unlawful conduct.\37\ Specifically, as 
noted in the proposal, the HMDA data do not include information 
typically required to open new accounts in a consumer's name, such as 
Social Security number, date of birth, place of birth, passport number, 
or driver's license number, nor do they include information useful to 
perpetrate existing account fraud, such as account numbers or 
passwords. Although an adversary might try to use almost any 
information relating to an individual to steal her identity or commit 
fraud against her, the Bureau concludes that disclosure of HMDA data 
would be unlikely to increase the information already publicly 
available that an adversary could exploit for these purposes. For 
example, the public HMDA data will include the name of the financial 
institution and other details about the loan terms that could be used 
in a social engineering attack against a borrower by a perpetrator 
pretending to be the financial institution or against a financial 
institution by a perpetrator pretending to be the borrower. However, 
these and other data that could be used for this purpose are often 
already publicly available--in identified form--in real estate 
transaction records.
---------------------------------------------------------------------------

    \37\ Indeed, as noted in the proposal, the Bureau believes that 
the data would be of minimal use for such purposes even without 
modification. Id. at 44595.
---------------------------------------------------------------------------

    The Bureau determines that an individual seeking to rob or 
adversely possess a property would be unlikely to undertake the effort 
required to re-identify public HMDA data to determine whether such a 
property is a vacation home, as suggested by an industry commenter. 
With respect to the industry commenter that expressed concern that 
lenders would be subject to increased litigation in the event public 
HMDA data was used for criminal purposes, as noted above, the Bureau 
concludes that it is unlikely the public HMDA data would be used for 
criminal purposes. Even if the data were used for such purposes, the 
Bureau is unable to identify a basis for lender liability under such a 
circumstance, and the commenter did not describe how such increased 
litigation would arise.
    The Bureau acknowledges that, if the public HMDA data were re-
identified, that is, if an adversary were to link an identified 
individual to his or her HMDA data, certain fields would reveal 
information about an applicant's or borrower's creditworthiness. 
However, information about applicant and borrower creditworthiness is 
important to HMDA's purposes. For example, this information assists in 
identifying possible discriminatory lending patterns by helping ensure 
that users are comparing applicants and borrowers with similar 
profiles, thereby controlling for factors that might provide non-
discriminatory explanations for disparities in credit and pricing 
decisions. As explained below, despite the opposition of many 
commenters, the Bureau is issuing final policy guidance that excludes 
from the public HMDA data credit score, which is the field that would 
reveal the most about an applicant's or borrower's creditworthiness.
    The Bureau described and analyzed potential adversaries' incentives 
to re-identify public HMDA data in the proposed policy guidance.\38\ 
Even though some adversaries may have such incentives and loan-level 
HMDA data has been made available to the public since 1991, the Bureau 
is unaware of any instances of re-identification of the data for 
harmful purposes. Commenters provided no evidence of such re-
identification. In the 2017 paper cited by a group of industry 
commenters, the author states that, using the 2014 public HMDA data, he 
re-identified 72 percent of borrowers with loans by the same lender in 
a particular census tract by matching the data to public records, but 
it appears that this exercise was undertaken solely to demonstrate that 
such matching can be done.\39\ Also in this paper, the author points to 
several projects in which academic and government researchers matched 
HMDA data to other data sources--some to private datasets, others to 
public records--for purposes of research related to mortgage 
lending.\40\ It is not clear from several of the resulting papers 
whether the researchers used public HMDA data to perform the matching 
(at least one appears to have relied on nonpublic HMDA data), but, in 
any event, it appears that in none of these instances were the HMDA 
data matched to other data sources for purposes of re-identifying 
borrowers, let alone for purposes of harming consumers. The Bureau 
concludes the modifications it intends to apply to the public HMDA data 
under the final policy guidance will minimize the attractiveness of the 
HMDA data for harmful purposes, and so will reduce any incentives for 
adversaries to re-identify the data.\41\
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    \38\ See id. at 44593-95.
    \39\ Yezer, supra note 30, at 14-16.
    \40\ Id. at 11-14.
    \41\ For example, the Bureau believes that low credit scores and 
high debt-to-income ratios may provide information about a 
borrower's financial condition that may suggest vulnerability to 
scams relating to debt relief or credit repair. The final policy 
guidance will exclude credit score from the public HMDA data and 
will top-code debt-to-income ratio to protect very high ratios.
---------------------------------------------------------------------------

    In 2015, the Bureau determined that public disclosure of the new 
HMDA data required under the 2015 HMDA Final Rule would further the 
purposes of HMDA. As noted above, the statute and Regulation C are 
clear that HMDA's purpose is the provision of data to the public and 
public officials in furtherance of HMDA's goals. Congress itself 
determined that many of the new data should be collected and reported 
to further HMDA's purposes, and the Bureau determined in the rulemaking 
resulting in the 2015 HMDA Final Rule that each of the new HMDA data 
fields it added using its discretionary authority furthers HMDA's 
goals. Several commenters described how the new HMDA data furthers 
HMDA's purposes, and no commenters provided analysis or data to support 
the general statement made by a few commenters that the public 
disclosure of HMDA data does not further the statute's purposes. For 
purposes of this final policy guidance, the Bureau takes as given the 
determinations made in the 2015 HMDA Final Rule, but the Bureau has 
stated that it may reconsider these determinations with respect to some 
or all of the discretionary fields through a new legislative 
rulemaking.
    Finally, the Bureau declines to exclude from the public data or 
disclose only in aggregate form all HMDA data or all new data required 
to be reported under the 2015 HMDA Final Rule, as suggested by several 
commenters. As noted, HMDA is a disclosure statute. It requires that 
HMDA data is made

[[Page 656]]

available to the public except as the Bureau determines necessary to 
protect applicant and borrower privacy interests. The Bureau interprets 
its obligation under the statute to permit modification of the data 
made available to the public only where the privacy risk such 
disclosure would pose would not be justified by the benefits of such 
disclosure in light of HMDA's purposes. Under the balancing test, 
excluding from public disclosure or disclosing only in aggregate form 
all HMDA data or all new HMDA data would require the Bureau to 
determine that the loan-level disclosure of each individual data field 
creates privacy risks that are not justified by the benefits of 
disclosure to HMDA's purposes and that the only modification available 
to appropriately balance the risks and benefits is exclusion from the 
public data. However, for the reasons discussed in the proposal,\42\ 
the Bureau determines that most of the HMDA data create low, if any, 
privacy risk--they neither substantially facilitate re-identification 
nor do they create a risk of harm or sensitivity--and that any risks 
are justified by the benefits in light of HMDA's purposes. Except with 
respect to total units and affordable units, discussed below in part 
IV.B, none of the comments provided any information that casts doubt on 
this conclusion. Therefore, the Bureau concludes that excluding all 
HMDA data or all new HMDA data would be inconsistent with the statute 
and the balancing test, which the Bureau has by law bound itself to use 
to make disclosure determinations.
---------------------------------------------------------------------------

    \42\ See 82 FR 44586, 44597-98 (Sept. 25, 2017).
---------------------------------------------------------------------------

B. Comments Concerning the Proposed Treatment of Specific Data Fields 
Under the Balancing Test

Data To Be Disclosed Without Modification
    The Bureau proposed to publicly disclose the following data fields 
as reported, without modification: \43\
---------------------------------------------------------------------------

    \43\ Id. at 44597-99.
---------------------------------------------------------------------------

     The following information about applicants, borrowers, and 
the underwriting process: Income, sex, race, ethnicity, name and 
version of the credit scoring model, reasons for denial, and automated 
underwriting system (AUS) name.\44\
---------------------------------------------------------------------------

    \44\ Note that, as discussed below, the Bureau proposed to 
exclude free-form text fields used to report certain data for the 
following data fields: ethnicity, race, name and version of the 
credit scoring model, reasons for denial, and AUS name. Id. at 
44609-10.
---------------------------------------------------------------------------

     The following information about the property securing the 
loan: State, county, census tract, occupancy type, construction method, 
manufactured housing secured property type, manufactured housing land 
property interest, total units, and affordable units.
     The following information about the application or loan: 
Loan term, loan type, loan purpose, whether the application was 
submitted directly to the financial institution, whether the loan was 
initially payable to the financial institution, whether a preapproval 
was requested, action taken, type of purchaser, lien status, prepayment 
penalty term, introductory rate period, interest rate, rate spread, 
total loan costs or total points and fees, origination charges, total 
discount points, lender credits, whether the loan was a high-cost 
mortgage under the Home Ownership and Equity Protection Act (HOEPA), 
balloon payment, interest-only payment, negative amortization, other 
non-amortizing features, combined loan-to-value ratio, open-end line of 
credit flag, business or commercial purpose flag, and reverse mortgage 
flag.
     The following information about the lender: Legal Entity 
Identifier (LEI) and financial institution name.\45\
---------------------------------------------------------------------------

    \45\ See 12 CFR 1003.4(a)(2)-(7), (a)(8)(i), (a)(9)(ii), 
(a)(10)(i), (a)(10)(iii), (a)(11)-(14), (a)(15)(i) (name and version 
of credit scoring model), (a)(16)-(22), (a)(24)-(27), (a)(29)-(33), 
(a)(35)(i) (AUS name), (a)(36)-(38).

The data fields above that were required to be reported under 
Regulation C prior to the 2015 HMDA Final Rule were disclosed to the 
public without modification under the Board's disclosure regime. The 
Bureau's continued disclosure of these data fields thus is consistent 
with the government's longstanding approach.
    With the exception of LEI, financial institution name, action 
taken, reasons for denial, census tract, and income, each of which is 
discussed further below, the Bureau initially determined that 
disclosing the data listed above in the loan-level HMDA data released 
to the public would likely present low risk to applicant and borrower 
privacy. The Bureau also stated that, to the extent that disclosure of 
these fields would create risk to applicant or borrower privacy, the 
Bureau believed the risks would be justified by the benefits of 
disclosure in light of HMDA's purposes.\46\
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    \46\ 82 FR 44586, 44598 (Sept. 25, 2017) (describing the utility 
of these data fields in light of HMDA's purposes: helping the public 
and public officials to determine whether financial institutions are 
serving the housing needs of their communities, to distribute 
public-sector investment so as to attract private investment to 
areas where it is needed, and to identify possible discriminatory 
lending patterns and enforce antidiscrimination statutes).
---------------------------------------------------------------------------

    An industry commenter and a group of consumer advocate commenters 
supported the Bureau's proposal to disclose without modification the 
fields the Bureau identified as likely to create low privacy risk. The 
industry commenter stated these data fields would provide valuable 
information about the mortgage market that is not available from any 
other source. The consumer advocate commenters stated that data fields 
relating to pricing--including the fields for interest rate, rate 
spread, total loan costs or total points and fees, origination charges, 
and discount points--would help data users identify potentially 
discriminatory price disparities within the prime and subprime mortgage 
markets. These commenters also stated that the data fields related to 
loan terms and conditions--such as the term of any prepayment penalty, 
the length of any introductory rate period, and whether the contractual 
terms include non-amortizing features such as a balloon payment--would 
serve as an early-warning system, enabling community organizations and 
government agencies to assess the prevalence of unfair, deceptive, and 
unaffordable lending. These commenters additionally supported the 
Bureau's proposal to disclose new race and ethnicity subcategories for 
Asian and Hispanic loan applicants. In their view, disclosure of these 
subcategories would help data users identify ``discrimination and 
targeting'' with greater precision and would promote responsible 
lending in all communities. These commenters also stated that 
disclosure of new data fields on manufactured housing would provide 
important information about the manufactured home market, including any 
issues of concern related to affordability, sustainability, or fair 
lending. Another consumer advocate commenter supported the Bureau's 
proposal to disclose whether the property is or will be used by the 
applicant or borrower as a principal residence, a second residence, or 
an investment property.
    Except for total units and affordable units, the Bureau intends to 
disclose without modification the data fields the Bureau identified in 
the proposal as likely presenting low risk to applicant and borrower 
privacy, as proposed. For the reasons discussed above and in the 
proposal, the Bureau determines, based on the information currently 
available to it, that disclosing these data fields as reported 
appropriately balances the privacy risks that may be created by such 
disclosure and the benefits of such disclosure in light of HMDA's 
purposes.

[[Page 657]]

    With respect to LEI, financial institution name, and census tract, 
the Bureau acknowledged in the proposal that disclosure would likely 
substantially facilitate the re-identification of applicants or 
borrowers. However, the Bureau initially determined that these risks to 
applicant and borrower privacy would be justified by the benefits of 
disclosure in light of HMDA's purposes.\47\ With respect to income, 
action taken, and reasons for denial, the Bureau recognized in the 
proposal that, if the HMDA data were re-identified, disclosure would 
likely create a risk of harm or sensitivity, but the Bureau initially 
determined these risks would be justified by the benefits of disclosure 
in light of HMDA's purposes.\48\ The Bureau responds to the specific 
comments it received on its proposed treatment of these data and 
describes its final determinations below.
---------------------------------------------------------------------------

    \47\ Id. at 44597-99.
    \48\ Id.
---------------------------------------------------------------------------

Legal Entity Identifier and Financial Institution Name
    Regulation C requires a financial institution, when submitting its 
loan/application register to the Bureau, to report the financial 
institution's LEI and name.\49\ This requirement is effective January 
1, 2019, and will apply to the submission of 2018 HMDA data.\50\ The 
LEI is an identifier issued to the financial institution by either a 
utility endorsed by the LEI Regulatory Oversight Committee or a utility 
endorsed or otherwise governed by the Global LEI Foundation (GLEIF) (or 
any successor of the GLEIF) after the GLEIF assumes operational 
governance of the global LEI system.\51\ Prior to the 2015 HMDA Final 
Rule, a financial institution was required to report its name and HMDA 
Reporter's Identification Number (HMDA RID), a ten-digit number that 
consisted of an entity identifier specified by the financial 
institution's appropriate Federal agency combined with a code that 
designates the agency. Both the financial institution's name and HMDA 
RID were disclosed to the public without modification under the Board's 
disclosure regime.
---------------------------------------------------------------------------

    \49\ 12 CFR 1003.4(a)(1)(i)(A); 12 CFR 1003.5(a)(3) (effective 
Jan. 1, 2019).
    \50\ 80 FR 66128, 66312 (Oct. 28, 2015).
    \51\ 12 CFR 1003.4(a)(1)(i)(A).
---------------------------------------------------------------------------

    The Bureau proposed to disclose to the public without modification 
LEI and financial institution name as reported.\52\ The Bureau 
initially determined that disclosure of these data fields in the loan-
level HMDA data released to the public would likely substantially 
facilitate the re-identification of applicants or borrowers, but that 
this risk to applicant and borrower privacy would be justified by the 
benefits of disclosure in light of HMDA's purposes.\53\ An industry 
commenter stated that, due to the risk of frivolous class action 
litigation against financial institutions, the public HMDA data should 
not reveal financial institutions' identities.
---------------------------------------------------------------------------

    \52\ 82 FR 44586, 44597-99 (Sept. 25, 2017).
    \53\ Id. at 44598 (stating that the ability to identify the 
financial institution by name is critical for users to evaluate the 
lending practices of a financial institution).
---------------------------------------------------------------------------

    The Bureau declines to exclude LEI and financial institution name 
from the public HMDA data based on the risk of frivolous class action 
litigation against financial institutions. As described above, HMDA 
requires each financial institution to make its modified loan/
application register available to the public, which necessarily entails 
identification of the lender. Though the 2015 HMDA Final Rule shifted 
responsibility for disclosing the modified loan/application register 
from institutions to the Bureau, the Bureau concludes that it must 
maintain the public's ability to obtain loan-level data for an 
individual lender. Further, the Bureau concludes that excluding these 
data fields, and thereby concealing the identities of lenders, would 
greatly undermine the utility of the public data for HMDA's purposes, 
because HMDA's purposes in large part concern evaluating the practices 
of individual lenders. Although the Bureau appreciates the industry 
commenter's concern about frivolous litigation against financial 
institutions and agrees such litigation should not be encouraged, it 
declines to exclude LEI and financial institution name from the public 
data on this basis.
    The Bureau intends to disclose without modification LEI and 
financial institution name, as proposed. For the reasons discussed 
above and in the proposal, the Bureau determines, based on the 
information currently available to it, that disclosing without 
modification LEI and financial institution name appropriately balances 
the privacy risks that may be created by disclosure of these fields and 
the benefits of such disclosure in light of HMDA's purposes.
Action Taken and Reasons for Denial
    Regulation C requires financial institutions to report the action 
taken by the financial institution in response to an application.\54\ 
Financial institutions must report a code from a specified list set 
forth in the HMDA Filing Instructions Guide to indicate the action 
taken.\55\ Financial institutions were required to report this data 
field prior to the 2015 HMDA Final Rule, and this data field was 
disclosed to the public without modification under the Board's 
disclosure regime.
---------------------------------------------------------------------------

    \54\ 12 CFR 1003.4(a)(8)(i).
    \55\ Bureau of Consumer Fin. Prot., ``Filing instructions guide 
for HMDA data collected in 2018--OMB Control No. 3170-0008,'' at 81 
(Sept. 2018) (hereinafter FIG), available at https://s3.amazonaws.com/cfpb-hmda-public/prod/help/2018-hmda-fig-2018-hmda-rule.pdf. Action taken is reported using the following codes: Code 
1--Loan originated; Code 2--Application approved but not accepted; 
Code 3--Application denied; Code 4--Application withdrawn by 
applicant; Code 5--File closed for incompleteness; Code 6--Purchased 
loan; Code 7--Preapproval request denied; Code 8--Preapproval 
request approved but not accepted.
---------------------------------------------------------------------------

    Regulation C also requires financial institutions to report the 
principal reason or reasons the financial institution denied the 
application, if applicable.\56\ If the financial institution denied the 
application, it must report one or more codes from a specified list to 
indicate the reason or reasons for denial.\57\ Prior to the 2015 HMDA 
Final Rule, reporting of reasons for denial was optional, except as 
required by the OCC and FDIC for certain supervised financial 
institutions.\58\ When reported, reasons for denial was disclosed to 
the public without modification under the Board's disclosure regime.
---------------------------------------------------------------------------

    \56\ 12 CFR 1003.4(a)(16). Insured depository institutions and 
insured credit unions are not required to report reasons for denial 
for loans or applications that are partially exempt under the 
EGRRCPA, although reporting may be required by another law or 
regulation. See 83 FR 45325, 45329 (Sept. 7, 2018).
    \57\ FIG, supra note 55, at 96-98. Reasons for denial is 
reported using the following codes: Code 1--Debt-to-income ratio; 
Code 2--Employment history; Code 3--Credit history; Code 4--
Collateral; Code 5--Insufficient cash (down payment, closing costs); 
Code 6--Unverifiable information; Code 7--Credit application 
incomplete; Code 8--Mortgage insurance denied; Code 9--Other; Code 
10--Not applicable; Code 1111--Exempt.
    \58\ 12 CFR 1003.4(c) (effective Jan. 1, 1990). Financial 
institutions regulated by the OCC are required to report reasons for 
denial on their HMDA loan/application registers pursuant to 12 CFR 
27.3(a)(1)(i), 128.6. Similarly, pursuant to regulations transferred 
from the Office of Thrift Supervision, certain financial 
institutions supervised by the FDIC are required to report reasons 
for denial on their HMDA loan/application registers. 12 CFR 390.147.
---------------------------------------------------------------------------

    The Bureau proposed to disclose to the public without modification 
action taken and reasons for denial as reported.\59\ The Bureau 
initially determined that disclosing action taken (if an application 
was denied) and reasons for denial in the loan-level HMDA data released 
to the public would likely disclose information about the applicant or 
borrower that is not otherwise public and may be harmful or sensitive. 
Nevertheless, the Bureau

[[Page 658]]

initially determined that this risk to applicant and borrower privacy 
would be justified by the benefits of disclosure in light of HMDA's 
purposes.\60\
---------------------------------------------------------------------------

    \59\ 82 FR 44586, 44597-99 (Sept. 25, 2017).
    \60\ Id. at 44598 (describing the utility of action taken and 
reasons for denial in light of HMDA's purposes, including helping 
the public and public officials to identify possible discriminatory 
lending patterns and enforce antidiscrimination statutes).
---------------------------------------------------------------------------

    A group of consumer advocate commenters supported the Bureau's 
proposal to disclose action taken, stating that it is essential for 
determining whether lenders are responsibly meeting credit needs in a 
non-discriminatory manner. These commenters also stated that disclosure 
of reasons for denial--in conjunction with disclosure of the name and 
version of the credit scoring model and automated underwriting system 
used by the financial institution, as the Bureau proposed--would 
increase transparency in the marketplace and support fair lending 
enforcement by enabling data users to determine if there are 
differences in reasons for denial based on the credit scoring model or 
automated underwriting system used.
    An industry commenter recommended that the Bureau exclude action 
taken and reasons for denial from the public HMDA data for commercial-
purpose multifamily loans only. The commenter stated that disclosure of 
these fields would create re-identification risk and pose a unique risk 
of harm for commercial-purpose multifamily applicants. In the 
commenter's view, if the HMDA data were re-identified, commercial-
purpose multifamily applicants could suffer negative reputational harm 
from certain information reported for action taken--specifically, 
``Denied,'' ``Withdrawn by applicant,'' or ``Closed as incomplete''--
and from any information relating to the reason for a denial. According 
to the commenter, the disclosure of this information could adversely 
affect these applicants' business relationships and these applicants 
may not be able to mitigate such harm effectively.
    The Bureau does not believe that the concerns expressed by the 
industry commenter justify excluding from the public HMDA data action 
taken and reasons for denial for commercial-purpose multifamily 
applications and loans. The risk of harm identified by the commenter 
could arise only with respect to an application that did not result in 
an origination. As discussed in more detail in the proposal,\61\ the 
Bureau concludes that re-identification risk is significantly reduced 
for applications that did not result in originations. The Bureau is not 
aware of any public or private dataset containing information about 
applications that do not result in originated mortgage loans. The 
Bureau believes that the lack of public information about applications 
would significantly reduce the likelihood that an adversary could match 
the record of a HMDA loan application that was not originated to an 
identified record in another dataset. Even if an applicant were to be 
re-identified, however, the Bureau concludes the harms the commenter 
envisions are unlikely to occur. Loan-level data for multifamily 
applications have been disclosed publicly since 1991, and the Bureau is 
not aware of any evidence that adversaries have re-identified these 
applications in the public HMDA data or that this type of harm has 
occurred. Further, even if this type of reputational harm were likely 
to occur, this harm would not be unique to commercial-purpose 
multifamily borrowers. Finally, if action taken were excluded, users 
would be unable to determine whether an application was originated, 
critically impairing the utility of the public data for HMDA's 
purposes.
---------------------------------------------------------------------------

    \61\ See id. at 44593 n.55.
---------------------------------------------------------------------------

    The Bureau intends to disclose without modification action taken 
and reasons for denial, as proposed. For the reasons discussed above 
and in the proposal, the Bureau determines, based on the information 
currently available to it, that disclosing without modification action 
taken and reasons for denial appropriately balances the privacy risks 
that may be created by disclosure of these fields and the benefits of 
such disclosure in light of HMDA's purposes.
State, County, and Census Tract
    Regulation C requires financial institutions to report the State, 
county, and census tract of the property securing or proposed to secure 
the covered loan if the property is located in an MSA or Metropolitan 
Division (MD) in which the institution has a home or branch office, or 
if the institution is subject to Sec.  1003.4(e).\62\ Institutions must 
report the State using the two-letter State code of the property; the 
county using the five-digit Federal Information Processing Standards 
code for the county; and the census tract using the 11-digit census 
tract number defined by the U.S. Census Bureau.\63\ As originally 
enacted and implemented in Regulation C, HMDA required financial 
institutions to disclose information about the financial institution's 
mortgage lending activity by census tract.\64\ The 1992 amendments to 
HMDA requiring institutions to make publicly available their modified 
loan/application registers included language stating ``[i]t is the 
sense of the Congress that a depository institution should provide loan 
register information under this section in a format based on the census 
tract in which the property is located.'' \65\ State, county, and 
census tract were disclosed to the public without modification under 
the Board's disclosure regime.
---------------------------------------------------------------------------

    \62\ 12 CFR 1003.4(a)(9)(ii). 12 CFR 1003.4(e) requires banks 
and savings associations that are required to report data on small 
business, small farm, and community development lending under 
regulations that implement the Community Reinvestment Act (CRA) to 
collect the information required by 12 CFR 1003.4(a)(9) for property 
located outside MSAs and MDs in which the institution has a home or 
branch office, or outside any MSA.
    \63\ FIG, supra note 55, at 83-84.
    \64\ Home Mortgage Disclosure Act of 1975, Public Law 94-200, 
section 304(a)(2)(A), 89 Stat. 1126 (Dec. 31, 1975); 12 CFR 
203.4(a)(1) (effective June 28, 1976).
    \65\ 12 U.S.C. 2803(j)(2)(C).
---------------------------------------------------------------------------

    The Bureau proposed to disclose to the public without modification 
State, county, and census tract as reported.\66\ The Bureau initially 
determined that disclosure of State and county would likely present low 
risk to applicant and borrower privacy, and that, to the extent that 
disclosure of these fields would create risk to applicant and borrower 
privacy, the risks would be justified by the benefits of disclosure in 
light of HMDA's purposes. The Bureau initially determined that 
disclosure of census tract would likely substantially facilitate the 
re-identification of applicants or borrowers, but that this risk to 
applicant and borrower privacy would be justified by the benefits of 
disclosure in light of HMDA's purposes.\67\
---------------------------------------------------------------------------

    \66\ 82 FR 44586, 44597-99 (Sept. 25, 2017).
    \67\ Id. at 44598 (describing the utility of census tract in 
light of HMDA's purposes, including helping the public and public 
officials to determine whether financial institutions are serving 
the housing needs of their communities and to identify possible 
discriminatory lending patterns and enforce antidiscrimination 
statutes).
---------------------------------------------------------------------------

    One industry commenter opposed the Bureau's proposal to disclose 
census tract without modification, and another industry commenter 
opposed the disclosure of this field for commercial-purpose multifamily 
loans. The first industry commenter stated that, to reduce re-
identification risk, the Bureau should exclude census tract from the 
public loan-level HMDA data and instead disclose ``generalized census 
tract classifications'' for each application or loan. The commenter 
suggested that, for example, the Bureau could indicate whether the 
property is located in a low- or moderate-income census tract or a 
census tract with a high percentage of minority residents. The second 
industry commenter stated that, for commercial-purpose multifamily 
loans only, the Bureau should exclude

[[Page 659]]

census tract and county, and should disclose State only where there are 
enough multifamily originations in the State to make re-identification 
risk ``remote,'' although the commenter did not identify the number of 
originations that would satisfy that standard. According to the 
commenter, the disclosure of these data fields would pose elevated re-
identification risk for multifamily borrowers, as significantly fewer 
commercial-purpose multifamily loans are originated each year than 
single-family loans.
    The Bureau recognizes that disclosing generalized census tract 
classifications instead of the census tract would reduce re-
identification risk. Nevertheless, the Bureau concludes that doing so 
would critically undermine the utility of the data for HMDA's purposes. 
If census tract were excluded from the HMDA data, the public and public 
officials would be unable to analyze the data at a geographic level 
smaller than county. Consequently, excluding census tract would make it 
virtually impossible for data users to identify possible discriminatory 
lending patterns within counties. For example, for a data user to 
analyze whether a lender was engaged in redlining, the user would need 
census tract to compare lending behavior among lenders in a particular 
community or an individual lender's behavior in different communities. 
Without census tract, users would also be unable to determine whether 
lenders were serving the housing needs of communities within counties 
or identify communities within counties where public-sector investment 
is needed to attract private investment. Additionally, excluding census 
tract from disclosure would also prevent financial institutions from 
using HMDA to assess their own fair lending risk by comparing their 
data with other institutions.\68\
---------------------------------------------------------------------------

    \68\ See, e.g., Melanie Brody & Anjali Garg, ``2013 HMDA Data Is 
Now Available; Mortgage Lenders Should Consider Evaluating Redlining 
Risk,'' K&L Gates, Consumer Fin. Servs. Watch (Sept. 25, 2014), 
available at https://www.consumerfinancialserviceswatch.com/2014/09/2013-hmda-data-is-now-available-mortgage-lenders-should-consider-evaluating-redlining-risk/ (``With the release of the 2013 HMDA 
data, lenders can now evaluate their own 2013 redlining risk by 
comparing their applications and originations in high-minority 
census tracts to those of their peers.'').
---------------------------------------------------------------------------

    The Bureau also declines to exclude State, county, and census tract 
for commercial-purpose multifamily loans. The Bureau determines that 
the privacy risk created by the disclosure of census tract, even if 
heightened with respect to multifamily loans, is justified by the 
critical benefits of this field to HMDA's purposes, as described in the 
above paragraph. The Bureau notes that, if census tract is disclosed, 
disclosure of county and State do not create additional privacy risk, 
because knowing the census tract allows a user to discern the county 
and state, as counties are geographic units within states and census 
tracts are geographic units within counties.
    The Bureau intends to disclose without modification State, county, 
and census tract, as proposed. For the reasons discussed above and in 
the proposal, the Bureau determines, based on the information currently 
available to it, that disclosing without modification State, county, 
and census tract appropriately balances the privacy risks that may be 
created by disclosure of these fields and the benefits of such 
disclosure in light of HMDA's purposes.
Income
    Regulation C requires financial institutions to report the gross 
annual income they relied on in making the credit decision or, if a 
credit decision was not made, the gross annual income they relied on in 
processing the application. Financial institutions do not have to 
report income for covered loans for which the credit decision did not 
consider income (or for applications for which the credit decision 
would not have considered income).\69\ Financial institutions must 
report income rounded to the nearest thousand.\70\ The Board amended 
Regulation C in 1989 to require reporting of income as part of its 
implementation of FIRREA.\71\ Prior to the 2015 HMDA Final Rule, 
financial institutions were required to report this data field rounded 
to the nearest thousand. Under the Board's disclosure regime, this data 
field was disclosed to the public without modification.
---------------------------------------------------------------------------

    \69\ 12 CFR 1003.4(a)(10)(iii).
    \70\ Comment 4(a)(10)(iii)-10.
    \71\ 54 FR 51356, 51363 (Dec. 15, 1989).
---------------------------------------------------------------------------

    The Bureau proposed to disclose without modification income as 
reported.\72\ The Bureau initially determined that disclosing income in 
the loan-level HMDA data released to the public would likely disclose 
information about the applicant or borrower that is not otherwise 
public and may be harmful or sensitive. Nevertheless, the Bureau 
initially determined that this risk to applicant and borrower privacy 
would be justified by the benefits of disclosure in light of HMDA's 
purposes.\73\
---------------------------------------------------------------------------

    \72\ 82 FR 44586, 44597-99 (Sept. 25, 2017).
    \73\ Id. at 44598 (describing the utility of income in light of 
HMDA's purposes, including helping the public and public officials 
to determine whether financial institutions are serving the housing 
needs of their communities and to identify possible discriminatory 
lending patterns and enforce antidiscrimination statutes).
---------------------------------------------------------------------------

    An industry commenter opposed the Bureau's proposal to disclose 
income without modification and recommended that the Bureau exclude 
income from the public HMDA data. The commenter stated that the new 
data required under the 2015 HMDA Final Rule would increase the risk 
that the HMDA data could be re-identified, and that information about a 
consumer's income is generally not available to the public and is 
considered sensitive by many consumers. The commenter also stated that 
income data would be ``inconsequential'' because the 2015 HMDA Final 
Rule modified Regulation C to require financial institutions to report 
debt-to-income ratio.
    The Bureau does not believe that the concerns expressed by the 
commenter justify excluding income from the public HMDA data. The 
Bureau recognizes, as it stated in the proposal, that, if the HMDA data 
were re-identified, disclosure of income would likely create a risk of 
harm or sensitivity.\74\ However, the Bureau believes that this risk is 
justified by the benefits of disclosure to HMDA's purposes. For 
example, income data plays a crucial role in: (1) Helping to identify 
whether the credit needs of people with low and moderate incomes in 
particular communities are being met; (2) the extent to which borrowers 
with low and moderate incomes are using certain products, such as home 
equity lines of credit; and (3) the extent to which lower-income 
borrowers are receiving credit under different terms than higher-income 
borrowers. The Bureau also believes that income data will continue to 
be valuable for achieving HMDA's fair lending purposes, notwithstanding 
the disclosure of debt-to-income ratio data pursuant to HMDA. Although 
lenders may rely more on debt-to-income ratio than on income in 
underwriting a loan, income will continue to be valuable as a proxy for 
debt-to-income ratio if debt-to-income ratio is not reported as a 
result of the EGRRCPA \75\ or if the precision of debt-to-income ratio 
is reduced in the public data as a result of binning or top- or bottom-
coding. To the extent the commenter's concern is that the HMDA data the 
Bureau proposed to disclose presents increased re-identification risk 
compared to the data disclosed under the Board's disclosure

[[Page 660]]

regime, the Bureau notes that it intends to modify every new field 
required under the 2015 HMDA Final Rule that it has identified as 
likely to substantially facilitate the re-identification of an 
applicant or borrower. Further, the Bureau intends to modify loan 
amount, a field that was disclosed without modification under the 
Board's disclosure regime and that the Bureau determines to be a 
significant contributor to re-identification risk in the HMDA data.
---------------------------------------------------------------------------

    \74\ Id.
    \75\ As described in greater detail in part II.B, above, the 
EGRRCPA amended HMDA by adding partial exemptions from HMDA's data 
collection and reporting requirements for certain insured depository 
institutions and insured credit unions.
---------------------------------------------------------------------------

    The Bureau intends to disclose without modification income. For the 
reasons discussed above and in the proposal, the Bureau determines, 
based on the information currently available to it, that disclosing 
without modification income appropriately balances the privacy risks 
that may be created by disclosure of this field and the benefits of 
such disclosure in light of HMDA's purposes.
Data To Be Excluded or Otherwise Modified in the Loan-Level HMDA Data
    The Bureau proposed to exclude or otherwise modify several data 
fields in the public HMDA data: The universal loan identifier; 
application date; loan amount; action taken date; property address; 
age; credit score; property value; debt-to-income ratio; the unique 
identifier assigned by the Nationwide Mortgage Licensing System and 
Registry for the mortgage loan originator; and AUS result. The Bureau 
also proposed to exclude free-form text fields used in certain 
instances to report the following data: Ethnicity; race; the name and 
version of the credit scoring model; reasons for denial; and AUS name. 
Below the Bureau addresses the comments it received and describes its 
final action on each of these data fields and on two additional data 
fields it did not propose to modify but intends to modify under the 
final policy guidance: Total units and affordable units.
Universal Loan Identifier or Non-Universal Loan Identifier
    Regulation C requires financial institutions to report a universal 
loan identifier (ULI) for each covered loan or application that can be 
used to identify and retrieve the application file.\76\ Regulation C 
sets forth detailed requirements concerning the ULI to be assigned and 
reported.\77\ A ULI must begin with the financial institution's LEI, 
followed by up to 23 additional characters to identify the covered loan 
or application, and then end with a two-character check digit 
calculated according to the methodology prescribed in appendix C of 
Regulation C.\78\ In addition, a ULI must be unique within the 
institution and must not contain any information that could be used to 
directly identify the applicant or borrower.\79\ Institutions reporting 
a loan for which a ULI was previously assigned and reported must report 
the ULI that was previously assigned and reported for the loan. The ULI 
must be reported as an alphanumeric field.\80\ The requirement in the 
2015 HMDA Final Rule to report a ULI replaced the requirement under 
prior Regulation C that a financial institution report an identifying 
number for the loan or loan application. Under the Board's disclosure 
regime, this loan or loan application identifying number was excluded 
from the public HMDA data. The Bureau added the requirement to report a 
ULI to implement the Dodd-Frank Act's amendment to HMDA providing for 
the collection and reporting of, ``as the Bureau may determine to be 
appropriate, a universal loan identifier.'' \81\
---------------------------------------------------------------------------

    \76\ 12 CFR 1003.4(a)(1)(i).
    \77\ Id.
    \78\ 12 CFR 1003.4(a)(1)(i)(A) through (C).
    \79\ 12 CFR 1003.4(a)(1)(i)(B)(3).
    \80\ FIG, supra note 55, at 77-79.
    \81\ 12 U.S.C. 2803(b)(6)(G).
---------------------------------------------------------------------------

    Insured depository institutions and insured credit unions are not 
required to report ULI for loans or applications that are partially 
exempt under the EGRRCPA.\82\ The 2018 HMDA Final Rule provides, 
however, that--because loans and applications must be identifiable in 
the HMDA data to ensure proper HMDA submission, processing, and 
compliance--institutions that choose not to report ULI pursuant to the 
EGRRCPA must report a non-universal loan identifier (NULI) for each 
loan and application.\83\ The NULI may be composed of up to 22 
characters and, among other requirements, must be unique within the 
insured depository institution or insured credit union, though it need 
not be unique within the industry.\84\
---------------------------------------------------------------------------

    \82\ 83 FR 45325, 45329 (Sept. 7, 2018).
    \83\ Id. at 45330.
    \84\ Id.; see also FIG, supra note 55, at 78-79.
---------------------------------------------------------------------------

    The Bureau proposed to modify the loan-level HMDA data disclosed to 
the public by excluding ULI.\85\ The Bureau initially determined that 
disclosing ULI in the loan-level HMDA data released to the public would 
likely substantially facilitate the re-identification of an applicant 
or borrower and that this risk would not be justified by the benefits 
of the disclosure in light of HMDA's purposes.\86\
---------------------------------------------------------------------------

    \85\ 82 FR 44586, 44599-44600 (Sept. 25, 2017).
    \86\ Id. at 44599 (describing the utility of ULI in light of 
HMDA's purposes, including helping the public and public officials 
to determine whether financial institutions are serving the housing 
needs of their communities).
---------------------------------------------------------------------------

    A few industry commenters supported the Bureau's proposal to 
exclude ULI from the public HMDA data. A group of consumer advocate 
commenters did not oppose the Bureau's proposal to exclude ULI but 
recommended that, separate from the HMDA data, the Bureau publish an 
additional data product that, according to these commenters, would 
serve some of the same purposes as ULI. Specifically, these commenters 
recommended that the Bureau publish data on each financial 
institution's loan purchases by income level and by year originated. 
According to these commenters, this data would help data users assess 
whether financial institutions are purchasing loans made to low- and 
moderate-income borrowers from one another to improve their CRA 
ratings.
    The Bureau intends to exclude ULI from the public HMDA data, as 
proposed, and to exclude NULI if it is reported instead of ULI. For the 
reasons discussed above and in the proposal, the Bureau determines, 
based on the information currently available to it, that excluding ULI 
and NULI from the public HMDA data appropriately balances the privacy 
risks that may be created by the disclosure of these fields and the 
benefits of such disclosure in light of HMDA's purposes.\87\
---------------------------------------------------------------------------

    \87\ Regarding the consumer advocate commenters' request for 
additional data, the Bureau will consider, as it does in the 
ordinary course of its business, whether to make additional 
information related to mortgage lending available to the public.
---------------------------------------------------------------------------

Application Date
    Regulation C requires financial institutions to report, except for 
purchased covered loans, the date the application was received or the 
date shown on the application form.\88\ This date must be reported by 
financial institutions as the exact year, month, and day, in the format 
of YYYYMMDD.\89\ Financial institutions were required to report this 
data field prior to the 2015 HMDA Final Rule. The Board amended 
Regulation C in 1989 to require reporting of the date the application 
was received as part of its implementation of FIRREA.\90\ Under the 
Board's disclosure regime, application date was excluded from the 
public HMDA data.
---------------------------------------------------------------------------

    \88\ 12 CFR 1003.4(a)(1)(ii).
    \89\ FIG, supra note 55, at 79.
    \90\ 54 FR 51356, 51363 (Dec. 15, 1989).
---------------------------------------------------------------------------

    The Bureau proposed to modify the loan-level HMDA data disclosed to 
the public by continuing to exclude

[[Page 661]]

application date.\91\ The Bureau initially determined that disclosing 
application date in the loan-level HMDA data released to the public 
would likely substantially facilitate the re-identification of an 
applicant or borrower and that this risk would not be justified by the 
benefits of disclosure in light of HMDA's purposes.\92\
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    \91\ 82 FR 44586, 44600-01 (Sept. 25, 2017).
    \92\ Id. at 44600 (describing the utility of application date in 
light of HMDA's purposes, including helping the public and public 
officials to identify possible discriminatory lending patterns and 
enforce antidiscrimination statutes).
---------------------------------------------------------------------------

    A few industry commenters supported the Bureau's proposal to 
continue to exclude application date from the public HMDA data. Two of 
these commenters stated that excluding application date, along with the 
other data points the Bureau proposed to exclude, would reduce re-
identification risk. Another of these commenters stated that excluding 
this data field, along with the other data points the Bureau proposed 
to exclude, would reduce the likelihood that community bank customers 
would become victims of identity theft or fraud.
    The Bureau intends to exclude application date from the public HMDA 
data, as proposed. For the reasons discussed above and in the proposal, 
the Bureau determines, based on the information currently available to 
it, that excluding application date from the public HMDA data 
appropriately balances the privacy risks that may be created by the 
disclosure of this field and the benefits of such disclosure in light 
of HMDA's purposes.
Loan Amount and Property Value
    Regulation C requires financial institutions to report the amount 
of the covered loan or the amount applied for.\93\ For closed-end 
mortgage loans, open-end lines of credit, and reverse mortgages, this 
amount is the amount to be repaid as disclosed on the legal obligation, 
the amount of credit available to the borrower, and the initial 
principal limit, respectively. Loan amount must be submitted by 
financial institutions in numeric form reflecting the exact dollar 
amount of the loan.\94\ Prior to the 2015 HMDA Final Rule, this data 
field was reported rounded to the nearest thousand; it was publicly 
disclosed without modification under the Board's disclosure regime. 
Although HMDA has always required financial institutions to report 
information about the dollar amount of a financial institution's 
mortgage lending activity,\95\ the Board amended Regulation C in 1989 
to require reporting of loan amount on a loan-level basis as part of 
its implementation of FIRREA.\96\
---------------------------------------------------------------------------

    \93\ 12 CFR 1003.4(a)(7).
    \94\ FIG, supra note 55, at 81.
    \95\ Home Mortgage Disclosure Act, Public Law 94-200, sections 
301-310, 89 Stat. 1124, 1125-28 (1975).
    \96\ See 54 FR 51356 (Dec. 15, 1989).
---------------------------------------------------------------------------

    Regulation C also requires financial institutions to report the 
value of the property securing the covered loan or, in the case of an 
application, proposed to secure the covered loan.\97\ Financial 
institutions must report the value they relied on in making the credit 
decision, such as an appraisal value or the purchase price of the 
property.\98\ Property value must be reported in numeric form 
reflecting the exact dollar amount of the value the financial 
institution relied on.\99\ The Bureau added the requirement to report 
property value the financial institution relied on in the 2015 HMDA 
Final Rule to implement the Dodd-Frank Act's amendment to HMDA 
providing for the collection and reporting of the value of the real 
property pledged or proposed to be pledged as collateral.\100\
---------------------------------------------------------------------------

    \97\ 12 CFR 1003.4(a)(28). Insured depository institutions and 
insured credit unions are not required to report property value for 
loans or applications that are partially exempt under the EGRRCPA. 
See 83 FR 45325, 45329 (Sept. 7, 2018).
    \98\ Comment 4(a)(28)-1.
    \99\ FIG, supra note 55, at 104.
    \100\ Dodd-Frank Act section 1094(3)(A)(iv), 12 U.S.C. 
2803(b)(6)(A).
---------------------------------------------------------------------------

    The Bureau proposed to modify the loan-level HMDA dataset disclosed 
to the public by disclosing the midpoint for the $10,000 interval into 
which the reported loan amount or property value falls instead of the 
exact value reported.\101\ For example, for a reported loan amount or 
property value of $117,834, the Bureau would disclose $115,000 as the 
midpoint between values equal to $110,000 and less than $120,000. The 
Bureau initially determined that disclosing reported loan amount and 
property value in the loan-level HMDA data released to the public would 
likely substantially facilitate the re-identification of an applicant 
or borrower and that this risk would not be justified by the benefits 
of the disclosure in light of HMDA's purposes.\102\ The Bureau also 
proposed to include an indicator of whether the reported loan amount 
exceeds the applicable dollar amount limitation on the original 
principal obligation in effect at the time of application or 
origination as provided under 12 U.S.C. 1717(b)(2) and 12 U.S.C. 
1454(a)(2) (GSE conforming loan limit).\103\ The Bureau sought comment 
on whether to add a similar indicator for the applicable limit for 
loans eligible for insurance by the Federal Housing Administration (FHA 
conforming loan limit).\104\
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    \101\ 82 FR 44586, 44601-02; 44607-08 (Sept. 25, 2017).
    \102\ See id. at 44601, 44607 (describing the utility of loan 
amount and property value in light of HMDA's purposes, including 
helping the public and public officials to determine whether 
financial institutions are serving the housing needs of their 
communities, and to identify possible discriminatory lending 
patterns and enforce antidiscrimination statutes).
    \103\ The dollar amount limitation on the original principal 
obligation as provided under 12 U.S.C. 1717(b)(2) and 12 U.S.C. 
1454(a)(2) refers to the annual maximum principal loan balance for a 
mortgage acquired by Fannie Mae and Freddie Mac (the ``GSEs''). The 
FHFA is responsible for determining the maximum conforming loan 
limits for mortgages acquired by the GSEs. See Press Release, Fed. 
Hous. Fin. Agency, FHFA Announces Increase in Maximum Conforming 
Loan Limits for Fannie Mae and Freddie Mac in 2017 (Nov. 23, 2016), 
available at https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Increase-in-Maximum-Conforming-Loan-Limits-for-Fannie-Mae-and-Freddie-Mac-in-2017.aspx.
    \104\ See 24 CFR 203.18 (providing maximum amounts for eligible 
mortgages).
---------------------------------------------------------------------------

    A few commenters opposed the Bureau's proposal to disclose loan 
amount in $10,000 bins and asked the Bureau to disclose more precise 
loan amount values. A group of consumer advocate commenters and an 
industry commenter each recommended disclosing loan amount rounded to 
the nearest $1,000, like under the Board's disclosure regime. They 
asserted that $10,000 bins would disproportionately affect the utility 
of the data for smaller loans. Conversely, an industry commenter 
opposed the Bureau's proposal and asked the Bureau to disclose less 
precise loan amount values, stating that $10,000 bins would 
insufficiently obscure the reported value for larger loans, such as 
multifamily loans, and thus would yield insufficient protection against 
re-identification relative to smaller loans. As with loan amount, a few 
commenters urged the Bureau to disclose more precise property values, 
such as by rounding to the nearest $1,000, while an industry commenter 
supported disclosing less precise values. An industry commenter stated 
that property value, or the property value derived from loan-to-value 
ratio, could be matched to publicly-available property or appraisal 
records.
    One industry commenter supported the Bureau's proposal to disclose 
loan amount and property value in $10,000 bins because it believed 
these bins would help prevent re-identification of applicants and 
borrowers while preserving much of the utility of these data fields. A 
government agency commenter supported the proposed GSE

[[Page 662]]

conforming loan limit indicator because the indicator would allow it to 
continue using public HMDA data to identify the market size for 
conforming loans for the purpose of setting housing goals for its 
regulated entities and to perform other analyses related to the 
conforming loan limit. Similarly, a group of consumer advocate 
commenters supported the proposed GSE conforming loan limit flag. These 
commenters also recommended adding a similar indicator for the FHA 
conforming loan limit, stating that analysis of loans below the FHA 
conforming loan limit was important for fair lending purposes.
    The Bureau determines that disclosing loan amount in $10,000 
intervals will create a meaningful reduction in record uniqueness in 
the HMDA data when evaluating three data fields that the Bureau 
concludes contribute most to re-identification risk: Loan amount, 
census tract, and lender name. Although the Bureau recognizes that 
disclosing loan amount in $10,000 intervals will reduce the utility of 
this field compared to disclosing more precise amounts, it believes it 
will still allow users to rely on loan amount to further HMDA's 
purposes to some degree. For example, $10,000 intervals will still 
allow users to have some understanding of the amount of credit that 
financial institutions have made available to consumers in certain 
communities and the extent to which such institutions are providing 
credit in varying amounts.
    The Bureau acknowledges that, as commenters stated, $10,000 
intervals create a larger reduction in uniqueness for small loan 
amounts--providing more privacy protection and less data utility--and a 
smaller reduction in uniqueness for large loan amounts--providing less 
privacy protection and more data utility--relative to the baseline 
reduction in uniqueness for all loans in the dataset. To address the 
fact that the proposed uniform binning approach would not yield the 
same balance of benefits and risks across all loan amounts, the Bureau 
considered whether it could apply bin sizes that differed by reported 
loan amount. For example, the Bureau could create bin sizes that were a 
function of loan amount, such as a percentage of the reported value. 
However, this approach may allow adversaries to determine the precise 
loan amount by reversing the function applied to the reported loan 
amount value. The Bureau also considered graduated bin sizes for 
segments of loans. However, the larger bin sizes in a graduated binning 
scheme would disproportionately reduce the utility of the data in more 
expensive geographic regions. Graduated bin sizes also would more 
significantly impair overall data utility compared to $10,000 bins, as 
users who wish to work with a consistently binned dataset would have to 
use the largest bin size for all loans. Finally, identifying a basis 
upon which to segment loan amount values into different sized bins 
presents challenges. In principle, the Bureau could analyze the 
reported HMDA data annually and determine segments based on the 
distribution of loan amounts in a given year to try to achieve more 
consistent reduction in uniqueness across loans of all sizes. In 
practice, however, resubmissions and late submissions may change the 
distribution of loan amounts, creating a risk that the Bureau would 
lack sufficient time to determine and apply the appropriate bins before 
disclosing the modified loan/application registers.
    Regarding an industry commenter's claim that property value could 
be matched to public appraisal records and could be derived from the 
loan-to-value ratio, the Bureau notes that appraisal records are not 
public, and the HMDA data will not contain loan-to-value ratio.\105\ 
However, the Bureau believes that identified property tax records or 
real estate transaction records may contain values close enough to the 
reported property value that property value would substantially 
facilitate the re-identification of a loan. Property value was not 
required to be reported prior to the 2015 HMDA Final Rule. The Bureau 
nevertheless expects its uniqueness to be similar to the uniqueness of 
the values reported for loan amount and believes that disclosing 
property value in $10,000 intervals would create a meaningful reduction 
in uniqueness. The Bureau concludes that disclosing property value in 
$10,000 intervals would still allow data users to determine the general 
values of properties for which financial institutions are providing 
financing. As with loan amount, the Bureau considered approaches that 
would bin property value in different intervals depending on the 
reported value, but for the reasons described above, the Bureau is not 
adopting such approaches.
---------------------------------------------------------------------------

    \105\ Unlike combined loan-to-value ratio, which includes the 
total amount of all debt secured by the property securing the loan 
reported, the loan-to-value ratio includes only the amount of the 
reported loan itself.
---------------------------------------------------------------------------

    Disclosing property value in $10,000 intervals also reduces 
adversaries' potential ability to use combined loan-to-value ratio to 
derive the reported loan amount. As mentioned above, the Bureau intends 
to disclose without modification combined loan-to-value ratio. Although 
both loan amount and property value would likely substantially 
facilitate re-identification, the Bureau concludes that loan amount 
will be easier to match to public records where available, because 
public records that contain the loan amount will likely contain the 
exact loan amount reported under HMDA. In contrast, the Bureau 
concludes that financial institutions will likely report the appraisal 
value as the property value, and the appraisal value is not publicly 
available. However, even with property value disclosed in $10,000 
intervals, if the reported combined loan-to-value ratio for a 
particular transaction is actually the loan-to-value ratio, the loan 
amount, property value, and combined loan-to-value ratio feasibly could 
be used to narrow the possible values for loan amount, thus decreasing 
the reduction in record uniqueness relative to $10,000 intervals.\106\ 
The extent to which this possible interaction could decrease the 
benefits of binning loan amount is uncertain. As an initial matter, 
under the 2018 HMDA Final Rule, certain small insured depository 
institutions and insured credit unions will not be required to report 
combined loan-to-value ratio or property value, so the interaction at 
issue will not be possible for many loans. Moreover, the percentage of 
transactions for which the reported combined loan-to-value ratio will 
equal the loan-to-value ratio will vary based on market conditions, and 
the Bureau believes that adversaries will not be able to determine 
exactly when the combined loan-to-value and loan-to-value ratios are 
equal for a given transaction. Finally, even if an adversary could 
narrow for a particular transaction the range of possible loan amount 
values, the narrowed range may not yield a record that is unique on the 
data fields that most contribute to re-identification.
---------------------------------------------------------------------------

    \106\ Similarly, an adversary could narrow the possible values 
for property value.
---------------------------------------------------------------------------

    The Bureau proposed the GSE conforming loan limit indicator to 
facilitate the accuracy and transparency of the FHFA Housing Goals 
program.\107\ FHFA has historically relied on public HMDA data to set 
statutorily-required housing goals for the GSEs to ensure the GSEs and 
the public are aware of and can provide feedback on FHFA's methodology. 
Binning loan amount as proposed would significantly reduce the accuracy 
of many calculations necessary to set these goals and measure 
performance, which hinge on determining whether loans meet the

[[Page 663]]

GSE conforming loan limit. Although FHFA could use non-public HMDA data 
for modeling purposes, this would result in FHFA, its regulated 
entities, and the public working from different datasets to evaluate 
the accuracy and transparency of the FHFA Housing Goals program.
---------------------------------------------------------------------------

    \107\ 12 CFR 1281.11 (bank housing goals); 12 CFR 1282.12 (GSE 
housing goals).
---------------------------------------------------------------------------

    In contrast to the GSE conforming loan limit indicator, a FHA 
conforming loan limit indicator would not serve a similarly compelling 
purpose. Disclosing loan amount in $10,000 intervals will sometimes 
reduce the ability of the public to determine whether a loan is at or 
above the FHA conforming loan limit. However, no commenter stated that 
the absence of this information would impact the FHA's ability to 
perform statutorily-required functions. Additionally, no commenter 
addressed the question of whether factors not reflected in the HMDA 
data would affect the accuracy of a FHA conforming loan limit 
indicator, and the Bureau remains concerned about its ability to 
accurately produce such an indicator using the HMDA data.
    The Bureau intends to modify the loan-level HMDA data disclosed to 
the public by disclosing the midpoint for the $10,000 interval into 
which the reported loan amount or property value falls, as proposed. 
The Bureau also intends to indicate in the data disclosed whether the 
reported loan amount exceeds the GSE conforming loan limit.\108\ For 
the reasons discussed above and in the proposal, the Bureau determines, 
based on the information currently available to it, that these 
modifications appropriately balance the privacy risks that would likely 
be created by the disclosure of these fields and the benefits of such 
disclosure in light of HMDA's purposes.
---------------------------------------------------------------------------

    \108\ The GSE conforming loan limit indicator will be included 
in the annual loan-level disclosure of all reported HMDA data 
combined, rather than in the modified loan/application register for 
each financial institution.
---------------------------------------------------------------------------

Action Taken Date
    Regulation C requires financial institutions to report the date of 
action taken by the financial institution on a covered loan or 
application.\109\ For originated loans, this date is generally the date 
of closing or the date of account opening.\110\ Regulation C provides 
some flexibility in reporting the date for other types of actions 
taken, such as applications denied, withdrawn, or approved by the 
institution but not accepted by the applicant. For example, for 
applications approved but not accepted, a financial institution may 
report ``any reasonable date, such as the approval date, the deadline 
for accepting the offer, or the date the file was closed,'' provided it 
adopts a generally consistent approach.\111\ This date is submitted by 
financial institutions as the exact year, month, and day, in the format 
of YYYYMMDD.\112\ Financial institutions were required to report this 
data field prior to the 2015 HMDA Final Rule. As with the application 
date, the Board added the requirement to report the action taken date 
as part of the amendments to Regulation C that implemented FIRREA.\113\ 
Under the Board's disclosure regime, action taken date was excluded 
from the public HMDA data.
---------------------------------------------------------------------------

    \109\ 12 CFR 1003.4(a)(8)(ii).
    \110\ Comment 4(a)(8)(ii)-5.
    \111\ Comment 4(a)(8)(ii)-4.
    \112\ FIG, supra note 55, at 81.
    \113\ 54 FR 51356, 51363 (Dec. 15, 1989).
---------------------------------------------------------------------------

    The Bureau proposed to modify the loan-level HMDA data disclosed to 
the public by continuing to exclude action taken date.\114\ The Bureau 
initially determined that disclosing action taken date in the loan-
level HMDA data released to the public would likely substantially 
facilitate the re-identification of an applicant or borrower and that 
this risk would not be justified by the benefits of the disclosure in 
light of HMDA's purposes.\115\ A few industry commenters supported the 
Bureau's proposal to continue to exclude action taken date from the 
HMDA data disclosed to the public.
---------------------------------------------------------------------------

    \114\ 82 FR 44586, 44602-03 (Sept. 25, 2017).
    \115\ Id. at 44602 (describing the utility of action taken date 
in light of HMDA's purposes, including helping the public and public 
officials to identify possible discriminatory lending patterns and 
enforce antidiscrimination statutes).
---------------------------------------------------------------------------

    The Bureau intends to exclude action taken date from the public 
HMDA data, as proposed. For the reasons discussed above and in the 
proposal, the Bureau determines, based on the information currently 
available to it, that excluding action taken date from the public HMDA 
data appropriately balances the privacy risks that may be created by 
the disclosure of this field and the benefits of such disclosure in 
light of HMDA's purposes.
Property Address
    Regulation C requires financial institutions to report the address 
of the property securing the loan or, in the case of an application, 
proposed to secure the loan.\116\ This address corresponds to the 
property identified on the legal obligation related to the covered 
loan.\117\ The property address reported by financial institutions 
includes the street address, city name, State name, and zip code.\118\ 
The Bureau added the requirement to report property address in the 2015 
HMDA Final Rule to implement the Dodd-Frank Act's amendment to HMDA 
providing for the collection and reporting of, ``as the Bureau may 
determine to be appropriate, the parcel number that corresponds to the 
real property pledged or proposed to be pledged as collateral.'' \119\
---------------------------------------------------------------------------

    \116\ 12 CFR 1003.4(a)(9)(i). Insured depository institutions 
and insured credit unions are not required to report property 
address for loans or applications that are partially exempt under 
the EGRRCPA. See 83 FR 45325, 45329 (Sept. 7, 2018).
    \117\ Comment 4(a)(9)(i)-1. For applications that did not result 
in an origination, the address corresponds to the location of the 
property proposed to secure the loan as identified by the applicant. 
Id.
    \118\ Comment 4(a)(9)(i)-2.
    \119\ 12 U.S.C. 2803(b)(6)(H).
---------------------------------------------------------------------------

    The Bureau proposed to modify the loan-level HMDA data disclosed to 
the public by excluding property address.\120\ The Bureau initially 
determined that disclosing property address in the loan-level HMDA data 
released to the public would likely substantially facilitate the re-
identification of an applicant or borrower and that this risk would not 
be justified by the benefits of the disclosure in light of HMDA's 
purposes.\121\
---------------------------------------------------------------------------

    \120\ 82 FR 44586, 44603-04 (Sept. 25, 2017).
    \121\ Id. at 44603 (describing the utility of property address 
in light of HMDA's purposes, including helping the public and public 
officials to determine whether financial institutions are serving 
the housing needs of their communities and to identify possible 
discriminatory lending patterns and enforce antidiscrimination 
statutes).
---------------------------------------------------------------------------

    A few industry commenters supported the Bureau's proposal to 
exclude property address from the public HMDA data. A group of consumer 
advocate commenters recommended that the Bureau disclose a hashed value 
for each property address in lieu of the property address.\122\ 
According to these commenters, disclosure of a hashed value in place of 
property address would help data users track ``loan flipping,'' which 
these commenters described as a predatory practice in which lenders 
target borrowers for a series of refinancings that increase the 
borrower's debt and strip equity. These commenters did not address 
whether the recommended hashed value should be used in place of a 
particular property address from year to year, i.e., every time that 
the particular property address is included in reported HMDA data.
---------------------------------------------------------------------------

    \122\ A hashed value is a value generated by a secure hash 
algorithm. A hash algorithm is designed to be non-invertible, 
meaning that the original value, in this case the reported property 
address, could not be derived from the hashed value.

---------------------------------------------------------------------------

[[Page 664]]

    The Bureau declines to disclose a hashed value in place of the 
property address. The Bureau finds that a hashed value used only within 
a particular year's HMDA data would have limited value for studying 
loan flipping. However, if a hashed value were carried over from year 
to year, the Bureau is concerned that, if one transaction related to 
the property were re-identified, the hashed value could be used to re-
identify every loan secured by the property in any other year's HMDA 
data. The Bureau also finds it would be difficult to develop a hashing 
algorithm that recognizes, with certainty, if a reported property 
address is unique, given slight differences in how property addresses 
may be reported.
    The Bureau intends to exclude property address from the public HMDA 
data, as proposed. For the reasons discussed above and in the proposal, 
the Bureau determines, based on the information currently available to 
it, that excluding property address from the public HMDA data 
appropriately balances the privacy risks that may be created by the 
disclosure of this field and the benefits of such disclosure in light 
of HMDA's purposes.
Age
    Regulation C requires financial institutions to report the age of 
the applicant or borrower.\123\ A financial institution complies with 
this requirement by reporting age, as of the application date reported, 
as the number of whole years derived from the date of birth as shown on 
the application form.\124\ The Bureau added the requirement to report 
age in the 2015 HMDA Final Rule to implement the Dodd-Frank Act's 
amendment to HMDA providing for the collection and reporting of 
age.\125\
---------------------------------------------------------------------------

    \123\ 12 CFR 1003.4(a)(10)(ii).
    \124\ Comment 4(a)(1)(ii)-1.
    \125\ 12 U.S.C. 2803(b)(4).
---------------------------------------------------------------------------

    The Bureau proposed to disclose age binned into the following 
ranges: 25 to 34; 35 to 44; 45 to 54; 55 to 64; and 65 to 74. The 
Bureau also proposed to bottom-code age under 25 and to top-code age 
over 74.\126\ The Bureau initially determined that disclosing reported 
age in the public HMDA data would likely disclose information about the 
applicant or borrower that is not otherwise public and may be harmful 
or sensitive and that this risk would not be justified by the benefits 
of the disclosure in light of HMDA's purposes.\127\
---------------------------------------------------------------------------

    \126\ 82 FR 44586, 44604 (Sept. 25, 2017).
    \127\ Id. (describing the utility of age in light of HMDA's 
purposes, including helping the public and public officials to 
determine whether financial institutions are serving the housing 
needs of their communities and to identify possible discriminatory 
lending patterns and enforce antidiscrimination statutes).
---------------------------------------------------------------------------

    The Bureau also proposed to indicate whether a reported age is 62 
or higher to enhance the utility of the data for identifying the 
particular fair lending risks that may be posed with regard to older 
populations.\128\ The Bureau recognized that an effect of this 
indicator would be to divide the 55 to 64 bin into two bins, 55 to 61 
and 62 to 64. The Bureau sought comment on whether, instead of binning 
age as proposed and indicating whether a reported age is 62 or higher, 
the Bureau should disclose reported ages of 55 to 74 in ranges of 55 to 
61 and 62 to 74.
---------------------------------------------------------------------------

    \128\ Under Federal law, age 62 or higher is considered to be 
older age for certain purposes. See, e.g., 24 CFR 206.33 (concerning 
eligibility for a home equity conversion mortgage); 12 CFR 1002.2(o) 
(defining ``elderly'' as 62 or older).
---------------------------------------------------------------------------

    An industry commenter expressed support for the Bureau's proposal 
to modify reported age. A group of consumer advocate commenters 
expressed general support for the Bureau's proposal. These commenters 
stated that applicant and borrower age is vital for fair lending 
enforcement and to identify potential unfair and deceptive lending. 
These commenters also stated that, in the years before the 2008 
financial crisis, abusive lenders targeted older adults, especially 
older adults of color, and that abuses also occurred in the reverse 
mortgage market for adults over age 62. These commenters expressed 
support for the Bureau's proposal to indicate whether a reported age is 
62 or higher. These commenters also expressed a preference for the 
proposed bins and indicator approach to the alternative the Bureau 
considered (binning reported ages of 55 to 74 in ranges of 55 to 61 and 
62 to 74), noting that the proposed bins would provide more precise 
data with respect to borrowers newly eligible for reverse mortgages 
(i.e., 62- to 64-year old borrowers). Finally, these commenters asked 
the Bureau to top-code age at 84, instead of 74. They stated that 
Americans are living longer, and top-coding age at 84 would help the 
public identify reverse mortgage and other lending patterns affecting 
the oldest seniors, including any fair lending or affordability 
concerns.
    An industry commenter expressed opposition to the Bureau's proposal 
and recommended that the Bureau exclude age entirely from the public 
HMDA data. The commenter expressed concern that disclosing age could 
facilitate re-identification of applicants and borrowers and enable 
adversaries to prey on vulnerable age groups.
    The Bureau acknowledges the risks identified by the industry 
commenter. However, as explained in the proposal, applicant or borrower 
age would assist users in identifying possible discriminatory lending 
patterns and enforcing antidiscrimination statutes by allowing users to 
examine potential age discrimination in lending.\129\ Applicant or 
borrower age would also assist in determining whether financial 
institutions are serving the housing needs of their communities, 
including the needs of various age cohorts.
---------------------------------------------------------------------------

    \129\ See 82 FR 44586, 44604 (Sept. 25, 2017).
---------------------------------------------------------------------------

    The Bureau determines that indicating whether the reported age is 
62 or higher would provide the greater utility identified by the 
commenters, as compared to the alternative bins about which the Bureau 
sought comment. Additionally, this approach would result in more 
consistent binning of the data and would allow analysis of the HMDA 
data in combination with data found in other public data sources, such 
as U.S. Census Bureau data, to further HMDA's purposes. The Bureau 
determines that the difference in privacy protection provided by the 
proposed approach compared to the alternative is minimal and is 
justified by the benefits of the proposed approach.
    Finally, the Bureau believes that top-coding age over 84 could 
allow greater visibility into lending practices with respect to the 
oldest consumers and could further HMDA's purposes: Specifically, such 
disclosure could permit the public and public officials to better 
understand whether lenders are serving the housing needs of the oldest 
seniors of their communities and to observe lending patterns relating 
to such consumers, a typically fixed-income population that is engaging 
in increased dwelling-secured borrowing with respect to which there is 
little public data currently available. However, the Bureau believes 
this approach also could increase privacy risk. The Bureau believes the 
reported HMDA data likely will not include significant numbers of 
records for applicants and borrowers over age 84, which could pose re-
identification risk. Thus, the harm and sensitivity risks identified in 
the proposal may be heightened to the extent that adversaries could re-
identify the oldest borrowers. Based on the information currently 
available to it, in light of the potential risks and benefits of this 
approach, the Bureau determines not to top-code age over 84.
    The Bureau intends to modify the loan-level HMDA data disclosed to 
the

[[Page 665]]

public by disclosing age binned into the following ranges: 25 to 34; 35 
to 44; 45 to 54; 55 to 64; and 65 to 74, as proposed. The Bureau also 
intends to bottom-code age under 25 and to top-code age over 74. 
Finally, the Bureau intends to indicate whether reported age is 62 or 
higher. For the reasons discussed above and in more detail in the 
proposal, the Bureau determines, based on the information currently 
available to it, that these modifications appropriately balance the 
privacy risks that would likely be created by the disclosure of this 
field and the benefits of such disclosure in light of HMDA's purposes.
Credit Score
    Regulation C requires financial institutions to report, except for 
purchased covered loans, the credit score or scores relied on in making 
the credit decision and the name and version of the scoring model used 
to generate each credit score.\130\ It also provides that, for purposes 
of this requirement, ``credit score'' has the meaning set forth in 
section 609(f)(2)(A) of the Fair Credit Reporting Act (FCRA).\131\ 
Financial institutions must report credit score as a numeric field, 
e.g., 650.\132\ Financial institutions must also report a code from a 
specified list to indicate the name and version of the scoring model 
used to generate each credit score reported.\133\ The Bureau added the 
requirement to report these data in the 2015 HMDA Final Rule to 
implement the Dodd-Frank Act's amendment to HMDA providing for the 
collection and reporting of ``the credit score of mortgage applicants 
and mortgagors, in such form as the Bureau may prescribe.'' \134\
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    \130\ 12 CFR 1003.4(a)(15)(i). Insured depository institutions 
and insured credit unions are not required to report credit score 
for loans or applications that are partially exempt under the 
EGRRCPA. See 83 FR 45325, 45329 (Sept. 7, 2018).
    \131\ 12 CFR 1003.4(a)(15)(ii).
    \132\ FIG, supra note 55, at 94-95.
    \133\ Id. at 95-96.
    \134\ 12 U.S.C. 2803(b)(6)(I).
---------------------------------------------------------------------------

    The Bureau proposed to modify the loan-level HMDA data disclosed to 
the public by excluding credit score.\135\ The Bureau initially 
determined that disclosing credit score in the loan-level HMDA data 
released to the public would likely disclose information about the 
applicant or borrower that is not otherwise public and may be harmful 
or sensitive and that this risk would not be justified by the benefits 
of the disclosure in light of HMDA's purposes.\136\
---------------------------------------------------------------------------

    \135\ 82 FR 44586, 44604-06 (Sept. 25, 2017).
    \136\ Id. at 44605 (describing the utility of credit score in 
light of HMDA's purposes, including helping the public and public 
officials to determine whether financial institutions are serving 
the housing needs of their communities and to identify possible 
discriminatory lending patterns and enforce antidiscrimination 
statutes).
---------------------------------------------------------------------------

    A few industry commenters supported the Bureau's proposal to 
exclude credit score from the public HMDA data. Another industry 
commenter opposed the Bureau's proposal to exclude credit score. The 
commenter stated that it would be extremely difficult to re-identify 
applicants or borrowers using this data field because credit scores are 
not publicly available, and that sensitivity alone should not be a 
basis for withholding data from the public where re-identification risk 
is low. The commenter stated further that credit scores are critically 
important in identifying possible discriminatory lending patterns, 
enforcing antidiscrimination statutes, and determining whether 
financial institutions are serving the housing needs of their 
communities, because they are an important factor in financial 
institutions' underwriting decisions.
    A group of consumer advocate commenters also opposed the Bureau's 
proposal to exclude credit score. These commenters stated that credit 
scores are essential in fair lending analysis because they help 
determine whether similarly situated applicants are treated differently 
solely due to their race or gender. The commenters recommended that, to 
address the privacy concerns identified by the Bureau, the Bureau 
``normalize'' reported credit scores before disclosure to the public. 
The commenters suggested that the Bureau either disclose credit scores: 
(1) As ``z-scores,'' which the commenters described as ``a measure of a 
credit score's place in the overall distribution of credit scores for 
loan applicants that year,'' or (2) in ``percentile ranges based on the 
distribution of loan applicants' credit scores.'' The commenters also 
recommended that, if the Bureau excludes credit score from the public 
HMDA data, the Bureau disclose credit scores in aggregate form by 
census tract, for all lenders and for each lender. According to the 
commenters, this information would help the public assess whether the 
industry as a whole or individual lenders are treating similarly 
situated neighborhoods differently due to the racial, ethnic, income, 
or age composition of the neighborhood.
    The Bureau finds that the industry commenter underestimates the re-
identification risk associated with the HMDA data, even modified as 
proposed, and that, where re-identification risk is present, 
sensitivity alone is a basis for modification under the balancing test. 
The Bureau declines to adopt the consumer advocate commenters' 
recommendation that the Bureau normalize the credit score data and 
disclose the normalized data. The Bureau finds that this alternative 
would not reduce privacy risks to the point that they would be 
justified by the disclosure benefits. Disclosure of a normalized credit 
score would reflect the applicant's or borrower's reported credit score 
in relation to all other applicants and borrowers in a particular 
year's HMDA data. Thus, the Bureau believes that, if the HMDA data were 
re-identified, disclosure of this information would likely create a 
risk of harm or sensitivity similar to the risk created by disclosure 
of reported credit score.\137\
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    \137\ Regarding the consumer advocate commenters' recommendation 
that the Bureau disclose credit scores in aggregate form, the Bureau 
will consider, as it does in the ordinary course of its business, 
whether to make additional information related to mortgage lending 
available to the public.
---------------------------------------------------------------------------

    The Bureau intends to exclude credit score from the public HMDA 
data, as proposed. For the reasons discussed above and in the proposal, 
the Bureau determines, based on the information currently available to 
it, that excluding credit score from the public HMDA data appropriately 
balances the privacy risks that may be created by the disclosure of 
this field and the benefits of such disclosure in light of HMDA's 
purposes.
Debt-to-Income Ratio
    Regulation C requires financial institutions to report, except for 
purchased covered loans, the ratio of the applicant's or borrower's 
total monthly debt to the total monthly income relied on in making the 
credit decision (debt-to-income ratio).\138\ The debt-to-income ratio 
must be reported as a percentage.\139\ The Bureau added the requirement 
to report debt-to-income ratio in the 2015 HMDA Final Rule using its 
discretionary authority provided by the Dodd-Frank Act's amendment to 
HMDA to require the reporting of ``such other information as the Bureau 
may require.'' \140\
---------------------------------------------------------------------------

    \138\ 12 CFR 1003.4(a)(23). Insured depository institutions and 
insured credit unions are not required to report debt-to-income 
ratio for loans or applications that are partially exempt under the 
EGRRCPA. See 83 FR 45325, 45329 (Sept. 7, 2018).
    \139\ FIG, supra note 55, at 101.
    \140\ 12 U.S.C. 2803(b)(6)(J).
---------------------------------------------------------------------------

    The Bureau proposed to disclose reported debt-to-income ratio of 
greater than or equal to 40 percent and less than 50 percent.\141\ The 
Bureau also proposed to bin reported debt-to-income ratio

[[Page 666]]

values into the following ranges: 20 percent to less than 30 percent; 
30 percent to less than 40 percent; and 50 percent to less than 60 
percent. In addition, the Bureau proposed to bottom-code reported debt-
to-income ratio values under 20 percent and to top-code reported debt-
to-income ratios of 60 percent or higher. The Bureau initially 
determined that disclosing reported debt-to-income ratio would likely 
disclose information about the applicant or borrower that is not 
otherwise public and may be harmful or sensitive and that, for certain 
debt-to-income ratio values, this risk would not be justified by the 
benefits of the disclosure in light of HMDA's purposes.\142\
---------------------------------------------------------------------------

    \141\ 82 FR 44586, 44606-07 (Sept. 25, 2017).
    \142\ See id. at 44606 (describing the utility of debt-to-income 
ratio in light of HMDA's purposes, including helping the public and 
public officials to determine whether financial institutions are 
serving the housing needs of their communities and to identify 
possible discriminatory lending patterns and enforce 
antidiscrimination statutes).
---------------------------------------------------------------------------

    The Bureau also initially determined that, for many financial 
institutions, debt-to-income ratio of 36 percent serves as an internal 
underwriting benchmark, so that the ability to identify whether an 
applicant's debt-to-income ratio is above or below this value would 
help users analyzing lending patterns to control for factors that might 
provide a legitimate explanation for disparities in credit or pricing 
decisions. The Bureau sought comment on whether the benefits of 
disclosing more granular information concerning debt-to-income ratio 
values at or around 36 percent would justify the risks to applicant and 
borrower privacy such disclosure would likely create, and how such 
information should be disclosed.
    An industry commenter expressed support for the Bureau's proposed 
treatment of debt-to-income ratio. A group of consumer advocate 
commenters expressed general support for the Bureau's proposal and also 
urged the Bureau to adopt more granular disclosure of debt-to-income 
ratio values near 36 percent, agreeing with the Bureau that 36 percent 
is a common underwriting benchmark. An industry commenter expressed 
opposition to the Bureau's proposal to bin debt-to-income ratio values 
into ranges, arguing that the Bureau should disclose debt-to-income 
ratio without modification. According to the commenter, binning reduces 
the utility of the data, thereby hampering understanding of lending 
practices. The commenter added that misuse of the data would be 
``almost impossible'' because, if property address were not disclosed, 
as the Bureau proposed, re-identification of applicants and borrowers 
would be extremely difficult.
    The Bureau finds that the industry commenter underestimates the re-
identification risk associated with the HMDA data, even modified as 
proposed. The Bureau determines that the existence of various 
regulatory, guarantor, and investment program benchmarks justifies 
disclosing exact debt-to-income ratio values between 40 and 50 percent, 
for the reasons set forth in more detail in the proposal.\143\ Further, 
based on the comment from a group of consumer advocates and further 
analysis, the Bureau finds that a 36 percent debt-to-income ratio 
serves as an internal underwriting benchmark for many lenders. The 
ability to identify whether an applicant's debt-to-income ratio is at 
or above this level therefore also would help data users control for 
factors that might provide a legitimate explanation for disparities in 
credit and pricing decisions. The Bureau determines that the best way 
to allow users to determine whether a value is at or above this 
benchmark is to extend the range of debt-to-income values disclosed 
without modification from ``greater than or equal to 40 percent and 
less than 50 percent'' to ``greater than or equal to 36 percent and 
less than 50 percent.'' The Bureau believes that the modifications the 
Bureau intends to apply will reduce the privacy risks created by the 
public disclosure of debt-to-income ratio while preserving much of the 
benefits of the data field.
---------------------------------------------------------------------------

    \143\ See id. at 44606-07.
---------------------------------------------------------------------------

    The Bureau intends to disclose debt-to-income ratio as proposed, 
except that it intends to disclose without modification debt-to-income 
ratio values greater than or equal to 36 percent and less than 50 
percent instead of greater than or equal to 40 percent and less than 50 
percent. The Bureau intends to bin reported debt-to-income ratio values 
into the following ranges: 20 percent to less than 30 percent; 30 
percent to less than 36 percent; and 50 percent to less than 60 
percent. The Bureau also intends to bottom-code reported debt-to-income 
ratio values under 20 percent and to top-code reported debt-to-income 
ratios of 60 percent or higher. For the reasons discussed above and in 
the proposal, the Bureau determines, based on the information currently 
available to it, that the disclosure of reported debt-to-income ratio 
values greater than or equal to 36 percent and less than 50 percent, 
and the modifications it intends to apply to other reported debt-to-
income ratio values, appropriately balance the privacy risks that would 
likely be created by the disclosure of this field and the benefits of 
such disclosure in light of HMDA's purposes.
Total Units and Affordable Units
    Regulation C requires financial institutions to report the total 
number of individual dwelling units related to the property securing 
the covered loan or, in the case of an application, proposed to secure 
the covered loan (total units).\144\ Regulation C also requires 
financial institutions to report, for properties that include 
multifamily dwellings, the number of affordable units related to the 
property. The rule defines affordable units as individual dwelling 
units related to the property that are income-restricted pursuant to 
Federal, State, or local affordable housing programs.\145\ The rule 
defines ``multifamily dwelling'' as a dwelling, regardless of 
construction method, that contains five or more individual dwelling 
units.\146\
---------------------------------------------------------------------------

    \144\ 12 CFR 1003.4(a)(31).
    \145\ 12 CFR 1003.4(a)(32). Insured depository institutions and 
insured credit unions are not required to report affordable units 
for loans or applications that are partially exempt under the 
EGRRCPA. See 83 FR 45325, 45329 (Sept. 7, 2018).
    \146\ 12 CFR 1003.2(n). Under Regulation C, a covered loan is 
secured by a multifamily dwelling if it is secured by the entire 
multifamily dwelling; thus, a loan to purchase an entire apartment 
building or condominium building would be a loan secured by a 
multifamily dwelling, while a loan to purchase an individual 
condominium in that building would not be. Comment 2(n)-3.
---------------------------------------------------------------------------

    The total units and affordable units data fields were not reported 
fields prior to the 2015 HMDA Final Rule; the Bureau added them to the 
2015 HMDA Final Rule using its discretionary authority provided by the 
Dodd-Frank Act's amendment to HMDA to require the reporting of ``such 
other information as the Bureau may require.'' \147\ Prior to the 2015 
HMDA Final Rule, however, data users could determine whether a property 
was a multifamily property, because the ``property type'' data field--
which was eliminated under the 2015 HMDA Final Rule--included a code 
for ``multifamily.'' Property type was disclosed to the public without 
modification under the Board's disclosure regime.
---------------------------------------------------------------------------

    \147\ 12 U.S.C. 2803(b)(6)(J).
---------------------------------------------------------------------------

    The Bureau proposed to disclose these data fields to the public as 
reported.\148\ The Bureau initially determined that disclosing these 
data fields would likely present low risk to applicant and borrower 
privacy, and, to the extent that disclosing these fields would create 
risk to applicant and borrower privacy, that the risks would

[[Page 667]]

be justified by the benefits of disclosure in light of HMDA's 
purposes.\149\
---------------------------------------------------------------------------

    \148\ 82 FR 44586, 44597-99 (Sept. 25, 2017).
    \149\ Id. at 44598 (describing in light of HMDA's purposes the 
utility of total units and affordable units--along with the other 
data fields that the Bureau proposed to disclose without 
modification on the basis that they present low privacy risk--
including helping the public and public officials to determine 
whether financial institutions are serving the housing needs of 
their communities, to distribute public-sector investment so as to 
attract private investment to areas where it is needed, and to 
identify possible discriminatory lending patterns and enforce 
antidiscrimination statutes).
---------------------------------------------------------------------------

    Several consumer advocate commenters supported the Bureau's 
proposal to disclose without modification these data fields. One 
consumer advocate commenter stated that multifamily loan data, in 
general, would help the public assess how lending practices affect low- 
and moderate-income tenants. This commenter also stated that data on 
total units would help data users determine how many households are 
affected by a loan and that the data on affordable units would provide 
valuable information about the financing of affordable housing.
    An industry commenter opposed the proposal to disclose total units 
and affordable units for multifamily loans. This commenter stated that 
disclosure of this data for multifamily loans would create a heightened 
risk of re-identification, because the number of units and number of 
affordable units can vary widely across multifamily properties and 
therefore may allow identification of specific properties. The 
commenter requested that, for multifamily loans only, the Bureau 
exclude these data fields from the publicly available HMDA data if the 
relevant geographic area does not include enough multifamily loans to 
protect against re-identification, although the commenter did not 
specify the minimum number of loans necessary to do so. The commenter 
further recommended that, if there is a sufficient number of 
multifamily loans to protect against re-identification, the Bureau 
should disclose total units binned into ranges--the commenter suggested 
bins of 5 to 49 and 50 and above--and disclose the value reported for 
the number of affordable units as a percentage of the number of total 
units.
    Based on these comments and the additional analysis described below 
in this paragraph, the Bureau believes that disclosing without 
modification reported values for total units of 5 and above in the 
loan-level HMDA data would likely substantially facilitate the re-
identification of applicants or borrowers and that this risk would not 
be justified by the benefits of disclosure. The Bureau determines that 
multifamily loans are somewhat more unique than other loans in the data 
and that, in many cases, an adversary could match the reported total 
units for multifamily loans with publicly available information about 
the number of units in a multifamily property, because this information 
is widely available to the public from sources including public records 
and real estate websites.
    For these reasons, the Bureau intends to modify the loan-level HMDA 
data disclosed to the public so that total units are binned into the 
following ranges: 5 to 24; 25 to 49; 50 to 99; 100 to 149; and 150 and 
over. The Bureau further determines that these modifications will 
reduce re-identification risk while preserving much of the benefit from 
disclosing this field, as data users will still be able to approximate 
with some precision how many units a particular transaction affects. 
Additionally, under the Bureau's approach, the bins for total units 
will align with the bins used by HUD's Rental Housing Finance Survey--
the preeminent Federal data source on rental housing finance 
characteristics--allowing users to analyze HMDA data in combination 
with data from that survey to further HMDA's purposes. The Bureau 
determines, based on the information currently available to it, that 
these modifications appropriately balance the privacy risks that would 
likely be created by the disclosure of this field and the benefits of 
such disclosure in light of HMDA's purposes. The Bureau declines to 
adopt the bins suggested by the commenter--5 to 49 and 50 and over--
because the Bureau concludes that these bins would provide insufficient 
precision regarding the number of housing units a transaction affects. 
The Bureau believes that the bins it is adopting better balance the 
privacy risks and disclosure benefits associated with the disclosure of 
this field.
    The Bureau determines that disclosure in the loan-level HMDA data 
of affordable units creates minimal risk, if any, of substantially 
facilitating the re-identification of applicants and borrowers in the 
HMDA data. However, it determines that, under certain circumstances, 
disclosure without modification of affordable units would undermine the 
privacy protection that binning total units achieves and that this risk 
is not justified by the benefits of disclosure. To reduce this risk, 
the Bureau intends to disclose affordable units as a percentage of the 
value reported for total units, rounded to the nearest whole number. 
The Bureau determines that this modification appropriately balances the 
privacy risks that would likely be created by the disclosure of this 
field and the benefits of such disclosure in light of HMDA's purposes.
Nationwide Mortgage Licensing System and Registry Identifier
    Regulation C requires financial institutions to report the unique 
identifier the Nationwide Mortgage Licensing System and Registry (NMLSR 
ID) assigned to the mortgage loan originator, as defined in Regulation 
G, 12 CFR 1007.102, or Regulation H, 12 CFR 1008.23, as 
applicable.\150\ The NMLSR ID must be reported in numeric form, such as 
123450.\151\ In the 2015 HMDA Final Rule, the Bureau added the 
requirement to report the NMLSR ID to implement the Dodd-Frank Act's 
requirement that financial institutions report, ``as the Bureau may 
determine to be appropriate, a unique identifier that identifies the 
loan originator as set forth in section 1503 of the [Secure and Fair 
Enforcement for] Mortgage Licensing Act of 2008.'' \152\
---------------------------------------------------------------------------

    \150\ 12 CFR 1003.4(a)(34). Insured depository institutions and 
insured credit unions are not required to report NMLSR ID for loans 
or applications that are partially exempt under the EGRRCPA. 83 FR 
45325, 45329 (Sept. 7, 2018).
    \151\ FIG, supra note 55, at 107-08.
    \152\ 12 U.S.C. 2803(b)(6)(F).
---------------------------------------------------------------------------

    The Bureau proposed to modify the loan-level HMDA data disclosed to 
the public by excluding the NMLSR ID.\153\ The Bureau initially 
determined that disclosing the NMLSR ID in the loan-level HMDA data 
released to the public would likely substantially facilitate the re-
identification of an applicant or borrower and that this risk would not 
be justified by the benefits of the disclosure in light of HMDA's 
purposes.\154\
---------------------------------------------------------------------------

    \153\ 82 FR 44586, 44608-09 (Sept. 25, 2017).
    \154\ See id. (describing the utility of NMLSR ID in light of 
HMDA's purposes, including helping the public and public officials 
to identify possible discriminatory lending patterns and enforcing 
antidiscrimination statutes).
---------------------------------------------------------------------------

    Several industry commenters and a group of consumer advocate 
commenters expressed support for the Bureau's proposal to exclude the 
NMLSR ID. The consumer advocate commenters also recommended that, in 
place of the NMLSR ID for the individual mortgage loan originator, the 
Bureau disclose the applicable NMLSR ID for the loan originator's 
company or branch. According to these commenters, disclosing the 
company or branch identifier would eliminate re-identification risk 
while helping data users assess the practices of mortgage brokers in 
the mortgage lending market, which these commenters described as a 
critical but hidden facet of the market.

[[Page 668]]

    The Bureau does not intend to disclose the NMLSR ID for the loan 
originator's company or branch as some commenters suggested. As 
discussed in the proposal, the Bureau believes the NMLSR ID for a loan 
originator would substantially facilitate re-identification of the HMDA 
data because it is required to appear on various documents associated 
with the loan, including the security instrument, and many 
jurisdictions publicly disclose these real estate transaction records 
in an identified form.\155\ For companies or branches with small 
numbers of mortgage loan originators, disclosing the company or branch 
identifier may allow adversaries to narrow the potential mortgage loan 
originator NMLSR IDs for the loan, which would create similar re-
identification concerns. Further, the HMDA data reported to the Bureau 
will not contain the NMLSR ID for the loan originator's company or 
branch. Because mortgage loan originators may work out of multiple 
branches, assigning the correct branch identifier may not be possible.
---------------------------------------------------------------------------

    \155\ Id.
---------------------------------------------------------------------------

    The Bureau intends to modify the loan-level HMDA data disclosed to 
the public by excluding the NMLSR ID, as proposed. For the reasons 
discussed above and in more detail in the proposal, the Bureau 
determines, based on the information currently available to it, that 
this modification appropriately balances the privacy risks that would 
likely be created by the disclosure of this field and the benefits of 
such disclosure in light of HMDA's purposes.
Automated Underwriting System Result
    Regulation C requires that, except for purchased covered loans, 
financial institutions report ``the name of the automated underwriting 
system used by the financial institution to evaluate the application 
and the result generated by that automated underwriting system.'' \156\ 
Regulation C defines ``automated underwriting system'' for the purposes 
of this requirement as ``an electronic tool developed by a securitizer, 
Federal government insurer, or Federal government guarantor . . . that 
provides a result regarding the credit risk of the applicant and 
whether the covered loan is eligible to be originated, purchased, 
insured, or guaranteed by that securitizer, Federal government insurer, 
or Federal government guarantor.'' \157\ Financial institutions report 
a code from a specified list to indicate the result or results 
generated by the AUS or AUSs used.\158\ Financial institutions may 
report up to five AUS names and five AUS results.\159\ The Bureau added 
these requirements in the 2015 HMDA Final Rule using its discretionary 
authority provided by the Dodd-Frank Act's amendment to HMDA to require 
the reporting of ``such other information as the Bureau may require.'' 
\160\
---------------------------------------------------------------------------

    \156\ 12 CFR 1003.4(a)(35)(i). Insured depository institutions 
and insured credit unions are not required to report these data 
fields for loans or applications that are partially exempt under the 
EGRRCPA. See 83 FR 45325, 45329 (Sept. 7, 2018).
    \157\ 12 CFR 1003.4(a)(35)(ii).
    \158\ FIG, supra note 55, at 109-10. AUS result is reported 
using the following codes: Code 1--Approve/Eligible; Code 2--
Approve/Ineligible; Code 3--Refer/Eligible; Code 4--Refer/
Ineligible; Code 5--Refer with Caution; Code 6--Out of Scope; Code 
7--Error; Code 8--Accept; Code 9--Caution; Code 10--Ineligible; Code 
11--Incomplete; Code 12--Invalid; Code 13--Refer; Code 14--Eligible; 
Code 15--Unable to Determine or Unknown; Code 16--Other; Code 17--
Not applicable; Code 1111--Exempt. Id.
    \159\ Comment 4(a)(35)-3.iv.
    \160\ 12 U.S.C. 2803(b)(6)(J).
---------------------------------------------------------------------------

    The Bureau proposed to modify the loan-level HMDA data disclosed to 
the public by excluding AUS result.\161\ The Bureau initially 
determined that disclosing AUS result in the public HMDA data would 
likely disclose information about the applicant or borrower that is not 
otherwise public and may be harmful or sensitive and that this risk 
would not be justified by the benefits of the disclosure in light of 
HMDA's purposes.\162\
---------------------------------------------------------------------------

    \161\ 82 FR 44586, 44609 (Sept. 25, 2017).
    \162\ Id. (describing the utility of AUS result in light of 
HMDA's purposes, including helping the public and public officials 
to identify possible discriminatory lending patterns and enforce 
antidiscrimination statutes).
---------------------------------------------------------------------------

    A few industry commenters supported the Bureau's proposal to 
exclude AUS result from the public HMDA data. Two AUS owner commenters 
also supported the Bureau's proposal to exclude AUS result, agreeing 
with the Bureau's assessment that AUS results are sensitive. These 
commenters also incorporated by reference comments they submitted in 
connection with the 2015 HMDA Final Rule in which they expressed 
concern that AUS result could be used to reverse-engineer proprietary 
information about how AUSs are designed.
    A group of consumer advocate commenters opposed the Bureau's 
proposal to exclude AUS result. The commenters disagreed with the 
Bureau's assessment that the benefits of disclosing AUS result do not 
justify the privacy risks that may be created by such disclosure. The 
commenters stated that AUS result can aid significantly in fair lending 
analysis by helping data users determine whether similarly situated 
borrowers were treated differently due to race, gender, or age. The 
commenters also stated that the codes for AUS result--such as 
``Approve/Ineligible,'' ``Ineligible,'' or ``Incomplete''--would not 
reflect any more negatively on applicants than the fact of a loan 
application denial.\163\ An industry commenter also opposed the 
Bureau's proposal. The commenter stated that it would be extremely 
difficult to re-identify applicants or borrowers using AUS result 
because it is not available in other public databases, and that 
sensitivity alone should not be a basis for withholding data from the 
public where re-identification risk is low. The commenter stated 
further that AUS result is critically important in identifying possible 
discriminatory lending patterns, enforcing antidiscrimination statutes, 
understanding lenders' underwriting decisions, and determining whether 
financial institutions are serving the housing needs of their 
communities.
---------------------------------------------------------------------------

    \163\ As noted above, the Bureau proposed to disclose data on 
the action taken by the financial institution--which includes 
information that a consumer's application was denied--without 
modification. Id. at 44597-99.
---------------------------------------------------------------------------

    The Bureau determines that disclosing AUS result in the public HMDA 
data would likely disclose information about the applicant or borrower 
that is not otherwise public and may be harmful or sensitive. The 
Bureau finds that the industry commenter that opposed the Bureau's 
proposal underestimated the re-identification risk associated with the 
HMDA data, even modified as proposed, and that, where re-identification 
risk is present, sensitivity alone is a basis for modification under 
the balancing test. The Bureau further finds that the consumer advocate 
commenters understated the sensitivity of AUS result data. As the 
Bureau explained in the proposal, if a HMDA record were associated with 
an identified applicant or borrower, disclosure of a ``negative'' AUS 
result would reveal information that would likely be perceived as 
reflecting negatively on the applicant's or borrower's willingness or 
ability to pay.\164\ Most consumers would consider such information 
sensitive and disclosure of this information could lead to dignity harm 
or embarrassment. The Bureau also determines that scam artists and 
other bad actors could use this field to target marketing to applicants 
or borrowers to try to take advantage of vulnerable consumers. The 
Bureau determines these privacy risks are not justified by the benefits 
of disclosure.
---------------------------------------------------------------------------

    \164\ Id. at 44609.

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[[Page 669]]

    The Bureau intends to exclude AUS result from the public HMDA data, 
as proposed. For the reasons discussed above and in the proposal, the 
Bureau determines, based on the information currently available to it, 
that excluding AUS result from the public HMDA data appropriately 
balances the privacy risks that may be created by the disclosure of 
this field and the benefits of such disclosure in light of HMDA's 
purposes.
Free-Form Text Fields
    Regulation C requires financial institutions to use free-form text 
fields to report certain data. Free-form text fields are unique in the 
HMDA data reported to the Bureau because they allow the reporting of 
any information, rather than certain specified types of numbers or 
codes. Free-form text fields must be used to report the name and 
version of the credit scoring model used, reasons for denial, AUS 
system name, and AUS result where the financial institution reports a 
code indicating that a non-listed value applies, and the fields may 
also be used to report certain ethnicity and race information, if 
provided by the applicant or borrower.\165\ Free-form text fields used 
to report race and ethnicity must be completed by applicants; all other 
free-form text fields must be completed by the financial 
institution.\166\ The maximum number of characters for the AUS system 
name, AUS result, and reasons for denial free-form text fields, 
including spaces, is 255; the maximum number of characters including 
spaces for all other free-form text fields is 100.\167\
---------------------------------------------------------------------------

    \165\ See FIG, supra note 55, at 85-86 (ethnicity), 88-89 
(race), 96 (name and version of credit scoring model used), 98 
(reasons for denial), 108-09 (AUS system name), and 110 (AUS 
result). Insured depository institutions and insured credit unions 
are not required to report these data fields for loans or 
applications that are partially exempt under the EGRRCPA. See 83 FR 
45325, 45329 (Sept. 7, 2018).
    \166\ Id.
    \167\ Id.
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    The Bureau proposed to modify the loan-level HMDA data disclosed to 
the public by excluding these free-form text fields.\168\ The Bureau 
initially determined that free-form text fields would allow the 
reporting of any information, including information that creates risks 
to applicant and borrower privacy, and that, given the amount of HMDA 
data reported each year, it would not be feasible for the Bureau to 
review the contents of each free-form text field submitted before 
disclosing the loan-level HMDA data to the public. The Bureau initially 
determined that excluding free-form text fields is a modification to 
the public loan-level HMDA data that appropriately balances the risks 
to applicant and borrower privacy and the benefits of disclosure in 
light of HMDA's purposes.\169\
---------------------------------------------------------------------------

    \168\ 82 FR 44586, 44609-10 (Sept. 25, 2017).
    \169\ Id.
---------------------------------------------------------------------------

    Two industry commenters supported the Bureau's proposal to exclude 
free-form text fields. A group of consumer advocate commenters 
requested that the Bureau clarify that financial institutions cannot 
use the free-form text field to report a reason for denial if the 
reason for denial can be reported using an available code.
    The Bureau intends to exclude free-form text fields from the public 
HMDA data, as proposed. For the reasons discussed above and in the 
proposal, the Bureau determines, based on the information currently 
available to it, that excluding free-form text fields from the public 
HMDA data appropriately balances the privacy risks that may be created 
by the disclosure of this field and the benefits of such disclosure in 
light of HMDA's purposes.\170\
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    \170\ The consumer advocate commenters' request seeks 
clarification about a matter unrelated to the subject of this final 
policy guidance, which is the disclosure of loan-level HMDA data. 
For information about how reasons for denial should be reported, see 
12 CFR 1003.4(a)(16), Comment 4(a)(16)-1 through -4, and the FIG, 
supra note 55, at 96-98.
---------------------------------------------------------------------------

Inclusion of Multifamily Loan Data
    One industry commenter recommended that the Bureau not disclose any 
loan-level data concerning loans secured by multifamily dwellings. The 
commenter stated that all data reported for these applications and 
loans should be excluded from the loan-level data made available to the 
public because HMDA's principal focus is single-family consumer-purpose 
mortgage transactions; the data required to be reported are 
inapplicable to multifamily loans; and multifamily lending differs from 
consumer-purpose single-family lending (e.g., because different 
criteria is considered in underwriting).
    The Bureau declines to categorically exclude multifamily loan data 
from the public HMDA data. As noted above, HMDA requires that HMDA data 
be made available to the public except as the Bureau determines 
necessary to protect applicant and borrower privacy interests.\171\ 
Because the Bureau determines that most of the HMDA data create low, if 
any, privacy risk, and that any risks are justified by the benefits in 
light of HMDA's purposes, excluding all multifamily loan data would be 
inconsistent with the statute and the balancing test. In addition, 
multifamily loans have always been included in the public HMDA data and 
Regulation C exempts lenders, on a data field-by-data field basis, from 
reporting data that is inapplicable to multifamily loans. Further, the 
Bureau concludes that the differences between single-family and 
multifamily loans do not reduce the value of public multifamily loan 
data for advancing HMDA's purposes, especially considering that 
multifamily housing is a vital component of the nation's housing stock.
---------------------------------------------------------------------------

    \171\ See supra note 18 and accompanying text; part IV.A 
(responding to comments suggesting that the Bureau exclude from the 
public data or disclose only in aggregate form all HMDA data or all 
new data required to be reported under the 2015 HMDA Final Rule).
---------------------------------------------------------------------------

C. Other Comments Received

Additional Data
    Prior to the 2015 HMDA Final Rule, Regulation C required financial 
institutions to report the location of the property to which the loan 
or application relates, by MSA or by Metropolitan Division, by State, 
by county, and by census tract, if the institution has a home or branch 
office in that MSA or Metropolitan Division. To reduce burden on 
financial institutions, the 2015 HMDA Final Rule eliminated from this 
provision the requirement to report the MSA or Metropolitan Division in 
which the property is located.\172\ The Bureau proposed to identify in 
the public data, for each loan and application that would have been 
subject to this provision prior to the 2015 HMDA Final Rule, the MSA or 
Metropolitan Division in which the property securing or proposed to 
secure the loan is located. The Bureau received no comments on this 
proposal. For each loan and application with respect to which the 
financial institution reports property location information, the Bureau 
intends to identify in the public data the applicable MSA or 
Metropolitan Division.\173\
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    \172\ 12 CFR 1003.4(a)(9)(ii) (effective Jan. 1, 2018); 80 FR 
66128, 66187 (Oct. 28, 2015).
    \173\ If applicable, the MSA or Metropolitan Division will be 
included in the annual loan-level disclosure of all reported HMDA 
data combined, rather than in the modified loan/application register 
for each financial institution.
---------------------------------------------------------------------------

    The FFIEC has historically included with its annual loan-level 
disclosure of all reported HMDA data the following census and income 
data: (1) Population (total population in tract); (2) Minority 
Population Percent (percentage of minority population to total 
population for tract, carried to two decimal places); (3) FFIEC Median 
Family Income (FFIEC Median family income in dollars for the MSA/MD in 
which the tract is

[[Page 670]]

located (adjusted annually by FFIEC)); (4) Tract to MSA/MD Median 
Family Income Percentage (percentage of tract median family income 
compared to MSA/MD median family income, carried to two decimal 
places); (5) Number of Owner Occupied Units (number of dwellings, 
including individual condominiums, that are lived in by the owner); and 
(6) Number of 1- to 4-Family units (dwellings that are built to house 
fewer than five families). These data are intended to provide 
additional context to the reported HMDA data. The Bureau proposed to 
continue to include these data in the combined loan-level HMDA data 
disclosed to the public.
    A group of consumer advocate commenters supported the proposal to 
continue to include the census and income data the FFIEC historically 
has included with its annual loan-level disclosure of all reported HMDA 
data. These commenters stated that the Minority Population Percent data 
can be incomplete as a demographic indicator and that disclosing the 
percentages of African-American and Hispanic populations separately 
would allow for a more accurate picture of the experience of geographic 
areas and neighborhoods in lending markets. These commenters also 
stated that, although neighborhoods with predominantly Asian residents 
are currently not as widespread as predominantly Hispanic and African-
American neighborhoods, adding the percentage of Asians living in each 
census tract would be valuable in some major markets.
    The Bureau intends that the census and income data historically 
included with the annual loan-level disclosure of all reported HMDA 
continues to be included with this disclosure. The Bureau will consider 
whether to recommend that the FFIEC add to these data the more granular 
minority population percentage data the consumer advocate commenters 
requested. Issuance of this final policy guidance does not require that 
a determination be made concerning the addition of the more granular 
data to the FFIEC's annual loan-level disclosure.
    The FFIEC historically also has included with its annual loan-level 
disclosure of all reported HMDA an application date indicator 
reflecting whether the application date was before January 1, 2004, on 
or after January 1, 2004, or not available. The Bureau stated in the 
proposal that it believed the application date indicator for pre- and 
post-January 2004 is no longer useful to the analysis of the HMDA data 
and therefore proposed to no longer include the indicator in the 
combined loan-level HMDA data disclosed to the public. The Bureau 
received no comments concerning the application date indicator. The 
Bureau intends that the application date indicator historically 
included with the annual loan-level disclosure of all reported HMDA 
data is no longer included with this disclosure.
Restricted Access Program
    The Bureau stated in the proposal that, as it had previously 
indicated in the supplementary information to the 2015 HMDA Final Rule, 
it believed HMDA's public disclosure purposes may be furthered by 
allowing industry and community researchers and academics to access the 
unmodified HMDA data through a restricted access program, for research 
purposes. The Bureau did not propose to establish a restricted access 
program but rather stated in the proposal that it continued to evaluate 
whether access to unmodified HMDA data should be permitted through such 
a program, the options for such a program, and the risks and costs that 
may be associated with such a program.
    Two industry commenters expressed concerns that such a program 
would create risk that the data would be misused or subject to a data 
breach. A group of consumer advocate commenters supported such a 
program and offered specific suggestions concerning how it should be 
structured. The Bureau will take these comments into consideration as 
it continues to evaluate access to unmodified HMDA data through a 
restricted access program. Issuance of this final policy guidance does 
not require that a determination be made concerning a restricted access 
program.
Legislative Rulemaking
    A group of industry commenters asserted that HMDA requires the 
Bureau to use a legislative rulemaking under the APA, rather than 
policy guidance, to identify the modifications to be applied to the 
loan-level HMDA data before it is disclosed to the public and suggested 
that the Bureau delay public disclosure of the data until such 
rulemaking is complete. Another industry commenter expressed concern 
that the Bureau did not use a rulemaking to determine the HMDA data to 
be disclosed to the public and stated that the Bureau should not 
disclose any new HMDA data until such a rulemaking is undertaken.
    The Bureau determines that its adoption of the balancing test in 
the 2015 HMDA Final Rule satisfies its obligations under HMDA; HMDA 
does not require a legislative rulemaking to identify modifications to 
the public HMDA data. As discussed in more detail in the proposal,\174\ 
in the 2015 HMDA Final Rule, the Bureau interpreted HMDA, as amended by 
the Dodd-Frank Act, to require that the Bureau use a balancing test to 
determine whether and how HMDA data should be modified prior to public 
disclosure to protect applicant and borrower privacy while also 
fulfilling HMDA's public disclosure purposes. The Bureau interpreted 
HMDA to require that public HMDA data be modified when the disclosure 
of the unmodified data creates risks to applicant and borrower privacy 
interests that are not justified by the benefits of such disclosure in 
light of the statutory purposes.\175\ This interpretation implemented 
HMDA sections 304(h)(1)(E) and 304(h)(3)(B) because it prescribed 
standards for requiring modification of itemized information, for the 
purpose of protecting the privacy interests of mortgage applicants and 
borrowers, that is or will be available to the public.\176\ The final 
policy guidance applies the balancing test to determine whether and how 
to modify the HMDA data reported under the 2015 HMDA Final Rule before 
it is disclosed on the loan level to the public.
---------------------------------------------------------------------------

    \174\ See 82 FR 44586, 44589 (Sept. 25, 2017).
    \175\ 80 FR 66128, 66134 (Oct. 28, 2015).
    \176\ Id.
---------------------------------------------------------------------------

    Nonetheless, as noted above, even though it is not required to do 
so as a matter of law, the Bureau has decided that it would be 
beneficial to undergo a separate notice and comment legislative 
rulemaking under the APA to determine what HMDA data will be disclosed 
in future years. The Bureau will commence such a rulemaking in May 
2019.
Data Collection and Reporting Under the 2015 HMDA Final Rule and 
Related Data Security Concerns
    Several industry commenters raised concerns with the data 
collection and reporting requirements imposed on financial institutions 
by the 2015 HMDA Final Rule, and one consumer advocate commenter 
requested that the Bureau require the collection and reporting of 
additional data. These comments are outside the scope of the proposed 
policy guidance, which concerned only the public disclosure of data 
collected and reported, not the collection and reporting itself.\177\ 
As

[[Page 671]]

mentioned above, the Bureau intends to reconsider aspects of the 2015 
HMDA Final Rule. Concerns about the data required to be collected and 
reported under Regulation C are more appropriately raised in comments 
submitted in connection with that rulemaking.
---------------------------------------------------------------------------

    \177\ The Bureau noted in the proposed policy guidance that the 
proposal did not reopen any portion of the 2015 HMDA Final Rule, as 
the Bureau did not intend, in the policy guidance, to revisit any 
decisions made in that rulemaking. See 82 FR 44586, 44587 (Sept. 25, 
2017).
---------------------------------------------------------------------------

    Several industry commenters also raised data security concerns 
related to the collection and reporting of HMDA data, including 
concerns with the system lenders use to submit their HMDA data to the 
Bureau and the Bureau's ability to protect the data during transmission 
and storage. A few of these commenters urged the Bureau to publish the 
details of its information security practices and procedures to address 
these concerns. One industry commenter suggested that financial 
institutions would be liable for a data breach at the Bureau that 
exposed nonpublic HMDA data, and also that financial institutions would 
be required to mitigate damages incurred by their customers as a result 
of such a breach. Again, these comments are outside the scope of the 
proposed policy guidance, which concerns the Bureau's intentional 
disclosure of HMDA data to the public as required by the statute. No 
comments received on the proposed policy guidance addressed data 
security concerns raised by the Bureau's proposed disclosure of HMDA 
data as required by HMDA.
Public Education
    A group of industry commenters expressed concern that applicants do 
not understand why financial institutions must ask for certain 
sensitive information and report the information to the Bureau, and why 
such information may be publicly disclosed. These commenters suggested 
that explanatory information provided at the time of application would 
be especially helpful, and asked that the Bureau consult with industry 
and engage in educational efforts concerning the purposes and 
requirements of HMDA. A group of consumer advocate commenters requested 
that the Bureau produce materials to help data users understand the 
HMDA data to be made public and in what form. These commenters 
suggested that the Bureau update a chart it has previously made public, 
describing the HMDA data to be collected and reported, to reflect if 
and how the data will be made available to the public. The Bureau will 
consider, as it does in the ordinary course of its business, whether to 
address the concerns expressed in these comments.

V. Regulatory Requirements

    The Bureau concludes that the final policy guidance on Disclosure 
of Loan-Level HMDA Data is a non-binding general statement of policy 
and/or a rule of agency organization, procedure, or practice exempt 
from notice and comment rulemaking requirements under the APA pursuant 
to 5 U.S.C. 553(b). Because no notice of proposed rulemaking was 
required, the Regulatory Flexibility Act does not require an initial or 
final regulatory flexibility analysis.\178\ The existing information 
collections contained in Regulation C have been approved by the Office 
of Management and Budget (OMB) and assigned OMB control number 3170-
0008. The Bureau determines that this final policy guidance does not 
impose any new or revise any existing recordkeeping, reporting, or 
disclosure requirements on covered entities or members of the public 
that would be collections of information requiring OMB approval under 
the Paperwork Reduction Act, 44 U.S.C. 3501, et seq. The Bureau has a 
continuing interest in the public's opinions regarding this 
determination. At any time, comments regarding this determination may 
be sent to the Bureau of Consumer Financial Protection (Attention: PRA 
Office), 1700 G Street NW, Washington DC 20552, or by email to 
CFPB_Public_PRA@cfpb.gov. The Bureau stated these conclusions in the 
proposed policy guidance and did not receive any comments on them.
---------------------------------------------------------------------------

    \178\ 5 U.S.C. 603(a), 604(a).
---------------------------------------------------------------------------

VI. Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Bureau plans to submit a report containing this policy guidance and 
other required information to each House of the Congress and the 
Comptroller General. The Bureau plans to make such a submission at 
least 60 days prior to the date the Bureau will first publish loan-
level HMDA data consistent with this policy guidance. The Bureau 
expects to publish such information on March 29, 2019. The Office of 
Information and Regulatory Affairs has designated this policy guidance 
as a ``major rule'' under 5 U.S.C. 804(2).

VII. Final Policy Guidance on Disclosure of Loan-Level HMDA Data

    The text of the final policy guidance is as follows:

Policy Guidance on Disclosure of Loan-Level HMDA Data

A. Background
    The Home Mortgage Disclosure Act (HMDA), 12 U.S.C. 2801 et seq., 
requires certain financial institutions to collect, report, and 
disclose data about their mortgage lending activity. HMDA is 
implemented by Regulation C, 12 CFR part 1003. HMDA identifies its 
purposes as providing the public and public officials with sufficient 
information to enable them to determine whether financial institutions 
are serving the housing needs of the communities in which they are 
located, and to assist public officials in their determination of the 
distribution of public sector investments in a manner designed to 
improve the private investment environment.\179\ In 1989, the Board of 
Governors of the Federal Reserve System (Board) recognized a third HMDA 
purpose of identifying possible discriminatory lending patterns and 
enforcing antidiscrimination statutes, which now appears with HMDA's 
other purposes in Regulation C.\180\
---------------------------------------------------------------------------

    \179\ 12 U.S.C. 2801(b).
    \180\ See Home Mortgage Disclosure, 54 FR 51356, 51357 (Dec. 15, 
1989) (recognizing the purpose of identifying possible 
discriminatory lending patterns and enforcing antidiscrimination 
statutes in light of the 1989 amendments to HMDA, which mandated the 
reporting of the race, sex, and income of loan applicants).
---------------------------------------------------------------------------

    In 2010, Congress enacted the Dodd-Frank Wall Street Reform and 
Consumer Protection Act (Dodd-Frank Act).\181\ Among other changes, the 
Dodd-Frank Act expanded the scope of information relating to mortgage 
applications and loans that must be collected, reported, and disclosed 
under HMDA and authorized the Bureau to require by rule financial 
institutions to collect, report, and disclose additional information. 
The Dodd-Frank Act amendments to HMDA also added new section 
304(h)(1)(E), which directs the Bureau to develop regulations, in 
consultation with the agencies identified in section 304(h)(2),\182\ 
that ``modify or require modification of itemized information, for the 
purpose of protecting the privacy interests of the mortgage applicants 
or mortgagors, that is or will be available to the public.'' Section 
304(h)(3)(B), also added by the Dodd-Frank Act, directs

[[Page 672]]

the Bureau of Consumer Financial Protection (Bureau) to ``prescribe 
standards for any modification under paragraph (1)(E) to effectuate the 
purposes of [HMDA], in light of the privacy interests of mortgage 
applicants or mortgagors. Where necessary to protect the privacy 
interests of mortgage applicants or mortgagors, the Bureau shall 
provide for the disclosure of information . . . in aggregate or other 
reasonably modified form, in order to effectuate the purposes of 
[HMDA].'' \183\
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    \181\ Dodd-Frank Wall Street Reform and Consumer Protection Act, 
Public Law 111-203, 124 Stat. 1376, 1980, 2035-38, 2097-101 (2010).
    \182\ These agencies are the prudential regulators--the Board of 
Governors of the Federal Reserve System, the Federal Deposit 
Insurance Corporation, the National Credit Union Administration, and 
the Office of the Comptroller of the Currency--the Department of 
Housing and Urban Development. Together with the Bureau, these 
agencies are referred to herein as ``the agencies.''
    \183\ Section 304(h)(3)(A) provides that a modification under 
section 304(h)(1)(E) shall apply to information concerning ``(i) 
credit score data . . . in a manner that is consistent with the 
purpose described in paragraph (1)(E); and (ii) age or any other 
category of data described in paragraph (5) or (6) of subsection 
(b), as the Bureau determines to be necessary to satisfy the purpose 
described in paragraph (1)(E), and in a manner consistent with that 
purpose.'' 12 U.S.C. 2803(h)(3)(A).
---------------------------------------------------------------------------

    On October 28, 2015, the Bureau published a final rule amending 
Regulation C (2015 HMDA Final Rule) to implement the Dodd-Frank Act 
amendments and make other changes, including adding a number of new 
data points.\184\ Most provisions of the 2015 HMDA Final Rule took 
effect on January 1, 2018,\185\ and apply to data financial 
institutions collect beginning in 2018 and report beginning in 2019.
---------------------------------------------------------------------------

    \184\ See generally Home Mortgage Disclosure (Regulation C), 80 
FR 66128 (Oct. 28, 2015); see also Home Mortgage Disclosure 
(Regulation C), 80 FR 69567 (Nov. 10, 2015) (making technical 
corrections).
    \185\ Certain amendments to the definition of financial 
institution went into effect on January 1, 2017. See 12 CFR 1003.2 
(effective Jan. 1, 2017); 80 FR 66128, 66308 (Oct. 28, 2015).
---------------------------------------------------------------------------

B. The Balancing Test
    In the 2015 HMDA Final Rule, in consultation with the agencies and 
after notice and comment, the Bureau interpreted HMDA, as amended by 
the Dodd-Frank Act, to require that the Bureau use a balancing test to 
determine whether and how HMDA data should be modified prior to its 
disclosure to the public to protect applicant and borrower privacy 
while also fulfilling HMDA's public disclosure purposes. The Bureau 
interpreted HMDA to require that public HMDA data be modified when the 
release of the unmodified data creates risks to applicant and borrower 
privacy interests that are not justified by the benefits of such 
release to the public in light of HMDA's purposes. In such 
circumstances, the need to protect the privacy interests of mortgage 
applicants or mortgagors requires that the itemized information be 
modified. This binding interpretation implemented HMDA sections 
304(h)(1)(E) and 304(h)(3)(B) because it prescribed standards for 
requiring modification of itemized information, for the purpose of 
protecting the privacy interests of mortgage applicants and borrowers, 
that is or will be available to the public.\186\
---------------------------------------------------------------------------

    \186\ 80 FR 66128, 66134 (Oct. 28, 2015).
---------------------------------------------------------------------------

    The Bureau has applied the balancing test to determine whether and 
how to modify the HMDA data reported under the 2015 HMDA Final Rule 
before it is disclosed on the loan level to the public. This policy 
guidance describes the loan-level HMDA data that the Bureau intends to 
make available to the public beginning in 2019, with respect to data 
compiled by financial institutions in or after 2018, including 
modifications that the Bureau intends to apply to the data. This policy 
guidance is exempt from notice and comment rulemaking requirements 
under the Administrative Procedure Act pursuant to 5 U.S.C. 553(b) and 
is non-binding.
C. Loan-Level HMDA Data To Be Disclosed to the Public
    The Bureau intends to publicly disclose loan-level HMDA data 
reported pursuant to the 2015 HMDA Final Rule as follows:
    1. Except as provided in paragraphs 2 through 8 below, the Bureau 
intends to disclose all data as reported, without modification.
    2. The Bureau intends to exclude the following from the public 
loan-level HMDA data:
    a. Universal loan identifier, collected pursuant to 12 CFR 
1003.4(a)(1)(i), or non-universal loan identifier, collected pursuant 
to 83 FR 45325, 45330 (Sept. 7, 2018);
    b. The date the application was received or the date shown on the 
application form, collected pursuant to 12 CFR 1003.4(a)(1)(ii);
    c. The date of action taken by the financial institution on a 
covered loan or application, collected pursuant to 12 CFR 
1003.4(a)(8)(ii);
    d. The address of the property securing the loan or, in the case of 
an application, proposed to secure the loan, collected pursuant to 12 
CFR 1003.4(a)(9)(i);
    e. The credit score or scores relied on in making the credit 
decision, collected pursuant to 12 CFR 1003.4(a)(15)(i);
    f. The unique identifier assigned by the Nationwide Mortgage 
Licensing System and Registry for the mortgage loan originator, as 
defined in Regulation G, 12 CFR 1007.102, or Regulation H, 12 CFR 
1008.23, as applicable, collected pursuant to 12 CFR 1003.4(a)(34);
    g. The result generated by the automated underwriting system used 
by the financial institution to evaluate the application, collected 
pursuant to 12 CFR 1003.4(a)(35)(i); and
    h. Free-form text fields used to report the following data: 
Applicant or borrower race, collected pursuant to 12 CFR 
1003.4(a)(10)(i); applicant or borrower ethnicity, collected pursuant 
to 12 CFR 1003.4(a)(10)(i); name and version of the credit scoring 
model used to generate each credit score or credit scores relied on in 
making the credit decision, collected pursuant to 12 CFR 
1003.4(a)(15)(i); the principal reason or reasons the financial 
institution denied the application, if applicable, collected pursuant 
to 12 CFR 1003.4(a)(16); and automated underwriting system name, 
collected pursuant to 12 CFR 1003.4(a)(35)(i).
    3. With respect to the amount of the covered loan or the amount 
applied for, collected pursuant to 12 CFR 1003.4(a)(7), the Bureau 
intends to:
    a. Disclose the midpoint for the $10,000 interval into which the 
reported value falls, e.g., for a reported value of $117,834, disclose 
$115,000 as the midpoint between values equal to $110,000 and less than 
$120,000; and
    b. Indicate where possible whether the reported value exceeds the 
applicable dollar amount limitation on the original principal 
obligation in effect at the time of application or origination as 
provided under 12 U.S.C. 1717(b)(2) and 12 U.S.C. 1454(a)(2).
    4. With respect to the age of an applicant or borrower, collected 
pursuant to 12 CFR 1003.4(a)(10)(ii), the Bureau intends to:
    a. Bin reported values into the following ranges, as applicable: 25 
to 34; 35 to 44; 45 to 54; 55 to 64; and 65 to 74;
    b. Bottom-code reported values under 25;
    c. Top-code reported values over 74; and
    d. Indicate whether the reported value is 62 or higher.
    5. With respect to the ratio of the applicant's or borrower's total 
monthly debt to the total monthly income relied on in making the credit 
decision, collected pursuant to 12 CFR 1003.4(a)(23), the Bureau 
intends to:
    a. Bin reported values into the following ranges, as applicable: 20 
percent to less than 30 percent; 30 percent to less than 36 percent; 
and 50 percent to less than 60 percent;
    b. Bottom-code reported values under 20 percent;
    c. Top-code reported values of 60 percent or higher; and
    d. Disclose, without modification, reported values greater than or 
equal to 36 percent and less than 50 percent.

[[Page 673]]

    6. With respect to the value of the property securing the covered 
loan or, in the case of an application, proposed to secure the covered 
loan, collected pursuant to 12 CFR 1003.4(a)(28), the Bureau intends to 
disclose the midpoint for the $10,000 interval into which the reported 
value falls, e.g., for a reported value of $117,834, disclose $115,000 
as the midpoint between values equal to $110,000 and less than 
$120,000.
    7. With respect to the number of individual dwelling units related 
to the property securing the covered loan or, in the case of an 
application, proposed to secure the covered loan, collected pursuant to 
12 CFR 1003.4(a)(31), the Bureau intends to:
    a. Bin reported values into the following ranges, as applicable: 5 
to 24; 25 to 49; 50 to 99; and 100 to 149;
    b. Top-code reported values over 149; and
    c. Disclose, without modification, reported values below 5.
    8. With respect to the number of individual dwelling units related 
to the property that are income-restricted pursuant to Federal, State, 
or local affordable housing programs, collected pursuant to 12 CFR 
1003.4(a)(32), the Bureau intends to disclose reported values as a 
percentage, rounded to the nearest whole number, of the value collected 
pursuant to 12 CFR 1003.4(a)(31).

    Dated: December 20, 2018.
Kathleen Kraninger,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2018-28404 Filed 1-30-19; 8:45 am]
BILLING CODE 4810-AM-P