HMDA requires that financial institutions report the Action Taken Date on their HMDA-LAR. So, for example, the date the loan was originated, the date the application was denied, etc. While that seems pretty clear and likely difficult to mess up, there are certain instances where a financial institution could get this wrong. For instance, the Regulation allows some flexibility in that either the loan closing date or the date of initial disbursement (for a rescindable loan) may be used. Our recommendation is to always use the loan closing date and here’s why:
The Commentary to §1003.4(a)(8)(ii) #5 states…Notwithstanding this flexibility regarding the use of the closing or account opening date in connection with reporting the date action was taken, the institution must report the origination as occurring in the year in which the origination goes to closing or the account is opened.
In other words, if your institution opts to use the disbursement date that’s perfectly acceptable; however, if you have a loan that closes in one year and the funds are disbursed in another year, you MUST use the date the loan closed. While these instances may be few and far between, always using the loan closing date will ensure you report the correct date.
David explains more in the video.
Published
2024/04/12
