HMDA, CRA and Fair Lending Glossary

Regulatory Acronyms

Primary Regulations

HMDA

Home Mortgage Disclosure Act (Regulation C)

CRA

Community Reinvestment Act (Regulation BB)

ECOA

Equal Credit Opportunity Act (Regulation B)

SBL 1071

Small Business Lending Data Collection (Section 1071 of Dodd-Frank Act)

Regulatory Agencies

FFIEC

Federal Financial Institutions Examination Council (coordinates federal bank supervision)

CFPB

Consumer Financial Protection Bureau (enforces consumer financial laws)

FRB

Federal Reserve Board (one of the federal banking regulators)

OCC

Office of the Comptroller of the Currency (regulates national banks)

FDIC

Federal Insurance Deposit Corporation (insures deposits, regulates banks)

NCUA

National Credit Union Administration (regulates credit unions)

HUD

Department of Housing and Urban Development (fair housing enforcement)

DOJ

Department of Justice (prosecutes lending discrimination cases)

FTC

Federal Trade Commission (consumer protection)

Fair Lending Laws

FHA

Fair Housing Act (prohibits housing discrimination)

HOEPA

Home Ownership and Equity Protection Act (high-cost mortgage protections)

HMDA Terms

Submission & Filing

LAR

Loan Application Register (the data file submitted to FFIEC)

TS

Transmittal Sheet (cover sheet with institution info for HMDA submission)

Edit Check

Validation rule applied to HMDA data (syntax, validity, quality edits)

Resubmission

Corrected LAR submitted after initial filing to fix errors

HMDA Reporter

Financial institution required to report HMDA data

Coverage & Thresholds

Coverage Threshold

Minimum origination volume to trigger HMDA reporting (25+ loans for depository institutions)

Closed-End Mortgage

Traditional fixed-term home loan (e.g., 30-year fixed)

Open-End Line of Credit

Home equity line of credit (HELOC)

Dwelling

Residential structure (single-family, multi-family up to 4 units, manufactured home)

Data Fields

ULI

Universal Loan Identifier (unique ID for each loan record)

LEI

Legal Entity Identifier (unique ID for financial institution)

Action Taken

Outcome of loan application (originated, denied, withdrawn, etc.)

Loan Purpose

Home purchase, refinance, home improvement, or other

Property Type

Single-family, multi-family, manufactured home

Occupancy

Principal residence, second home, investment property

Rate Spread

Difference between loan APR and APOR (Average Prime Offer Rate)

APOR

Average Prime Offer Rate. The benchmark the FFIEC publishes weekly, against which a loan's APR is compared to produce the rate spread

HOEPA Status

Whether loan is a high-cost mortgage

Lien Status

First lien, subordinate lien, not secured

Preapproval

Whether bank offers preapproval program

Geographic Data

Census Tract

Small geographic area (2,500-8,000 people) used for demographic analysis

MSA

Metropolitan Statistical Area (urban area with 50K+ population)

MD

Metropolitan Division (subdivision of large MSA)

County

County FIPS code where property is located

State

Two-letter state code

Demographic Data

Applicant/Co-Applicant

Primary and secondary borrower on loan application

Ethnicity

Hispanic or Latino vs Not Hispanic or Latino

Race

American Indian/Alaska Native, Asian, Black/African American, Native Hawaiian/Pacific Islander, White

Sex

Male, Female

Age

Applicant's age (or age range)

Income

Gross annual income relied on in credit decision

CRA Terms

Assessment Areas

Assessment Area (AA)

Geographic area(s) where bank takes deposits and makes loans (subject to CRA evaluation)

Delineation

Process of defining assessment area boundaries

Low-Income Census Tract

Tract with median family income < 50% of area median

Moderate-Income Census Tract

Tract with median family income 50-79% of area median

Middle-Income Census Tract

Tract with median family income 80-119% of area median

Upper-Income Census Tract

Tract with median family income ≥ 120% of area median

MFI

Median Family Income (for MSA or state non-MSA area)

Performance Tests

Lending Test

Evaluation of bank's lending activity (primary CRA test)

Investment Test

Evaluation of qualified investments (community development)

Service Test

Evaluation of branch distribution and services

Community Development

Affordable housing, community services, economic development, revitalization

CRA Ratings

Outstanding

Substantially exceeds minimum standards

Satisfactory

Meets standards

Needs to Improve

Does not meet minimum standards

Substantial Noncompliance

Fails to meet standards (worst rating)

CRA Data Analysis

Geographic Distribution

Lending patterns across low/mod/middle/upper income tracts

Borrower Distribution

Lending to low/mod/middle/upper income borrowers

Loan-to-Deposit Ratio

Percentage of deposits that are lent out

Inside/Outside Analysis

Lending inside vs outside assessment area

Penetration Rate

Bank's market share in assessment area

Fair Lending Terms

Protected Classes (ECOA)

Protected Basis

Characteristic that cannot be used to discriminate (race, color, religion, national origin, sex, marital status, age, public assistance receipt)

Prohibited Basis

Another term for protected basis

Types of Discrimination

Overt Discrimination

Explicit policy that treats protected class differently (e.g., "no loans to unmarried women")

Disparate Treatment

Treating applicants differently based on protected class (intentional discrimination)

Disparate Impact

Neutral policy that disproportionately affects protected class (unintentional discrimination)

Redlining

Avoiding lending or providing services in particular geographic areas, often majority-minority neighbourhoods, whether or not anyone intended it

REMA

Reasonably Expected Market Area. The area examiners consider an institution should reasonably have served, which can be wider than the CRA assessment area the institution drew for itself. A redlining review compares lending inside the REMA against peers

Steering

Directing applicants to certain products based on protected class

Fair Lending Analysis Methods

Comparative File Review

Side-by-side examination of matched pairs to determine whether a legitimate factor explains the different outcome. The pairs may be chosen by hand or, in software, selected automatically from criteria you set

Pricing Analysis

Statistical comparison of interest rates and fees

Regression Analysis

Statistical model to identify unexplained disparities

BISG

Bayesian Improved Surname Geocoding (proxy method to estimate race/ethnicity)

Matched-Pair Analysis

Pairing a denied protected-class applicant with a similarly-situated approved applicant from your own loan files, so the two decisions can be compared directly. Also marketed as "match pair testing". This is the selection step that produces the pairs a comparative file review then examines

Matched-Pair Testing (mystery shopping)

A separate practice in which trained testers pose as applicants to observe how they are treated. Conducted by enforcement agencies and fair housing organisations, not by a lender analysing its own data. Distinct from matched-pair analysis above, despite the similar name

Statistical Terms

Logistic Regression

Statistical model for binary outcomes (approved vs denied)

Control Variables

Factors that affect credit decision (income, credit score, LTV, DTI)

Coefficient

Statistical measure of variable's effect on outcome

P-Value

Probability that result is due to chance (p < 0.05 = statistically significant)

Odds Ratio

Measure of disparity (e.g., minority applicants 2x as likely to be denied)

Marginal Effect

Percentage point difference in approval rate

R-Squared

How well model explains variation in outcomes

Proxy Methods

Proxy

Estimate of race/ethnicity when not reported by applicant

Surname Analysis

Using last name to estimate ethnicity (Census Bureau surname list)

Geocoding (as a BISG input)

The geographic half of the proxy: the racial and ethnic composition of the applicant's census tract. Not the same thing as geocoding in the compliance sense, which is assigning a census tract to an address

BISG Proxy

Combines surname probability with tract composition using Bayes' theorem, producing a probability for each race and ethnicity category rather than a single label

Underwriting Factors

Credit Score

FICO or other credit score (most important underwriting factor)

LTV

Loan-to-Value ratio (loan amount ÷ property value)

DTI

Debt-to-Income ratio (monthly debt payments ÷ monthly income)

CLTV

Combined Loan-to-Value (includes subordinate liens)

Loan Amount

Principal amount borrowed

Property Value

Appraised value of home

Liquid Reserves

Cash and equivalents after closing

Geocoding Terms

Geographic Identifiers

FIPS Code

Federal Information Processing Standards code (numeric identifier for geographic areas)

State FIPS

2-digit code for state (e.g., 12 = Florida)

County FIPS

3-digit code for county (e.g., 095 = Orange County, FL)

Tract Code

6-digit census tract identifier (e.g., 016800)

Full FIPS

11-digit combined code (state + county + tract = 12095016800)

MSA Code

5-digit Metropolitan Statistical Area code

MD Code

5-digit Metropolitan Division code

Geocoding Process

Address Standardization

Cleaning and formatting address (USPS standards)

Geocoding

Assigning geographic codes (census tract, county, MSA) to address

Latitude/Longitude

Precise coordinates of property location

Geocoding Match Rate

Percentage of addresses that receive a geographic code at all. Distinct from accuracy, which is whether that code is the right one

Geocoding Accuracy

How often the assigned census tract is correct. RATA publishes 95%+ for its own geocoding

Census Tract Boundary

Geographic boundary defining census tract

Geocoding Services

Census Bureau TIGER

Topologically Integrated Geographic Encoding and Referencing (official Census data)

Geocoding Vendor

Third-party service providing geocoding (e.g., RATA GeoPlus)

Compliance-Grade Geocoding

Accurate enough for regulatory submission (vs. commercial-grade for mapping)

SBL (Small Business Lending) Terms

Data Collection

Covered Application

Small business loan application subject to Section 1071 reporting

Small Business

Business with gross annual revenue < $5 million

Principal Owner

Individual(s) owning >25% of business

Minority-Owned Business

Business where minority owners hold > 50%

Women-Owned Business

Business where women owners hold > 50%

Veteran-Owned Business

Business where veteran owners hold > 50%

SBL Data Points

Business Revenue

Gross annual revenue of business

NAICS Code

North American Industry Classification System (6-digit industry code)

Loan Type

Term loan, line of credit, credit card, merchant cash advance, etc.

Loan Purpose (SBL)

Working capital, equipment, expansion, etc.

Credit Score (SBL)

Business credit score (if used in decision)

Principal Owners' Demographics

Race, ethnicity, sex of owners with >25% stake

Compliance Status

Phase 1 Lender

Makes 2,500+ SBL originations annually (first to report)

Phase 2 Lender

Makes 500-2,499 originations annually

Phase 3 Lender

Makes 100-499 originations annually

Exempt Lender

Makes < 100 originations annually (not required to report)

RATA Comply Terminology

Software Products

Comply HMDA/CRA/SBL

Desktop compliance software (primary product)

Comply Fair Lending

Fair Lending analysis module

Comply DataMine

Report builder and peer analysis tool

Comply Peer-2-Peer

Comparative lending pattern analysis

Comply Mapping

Geographic visualization tool

GeoPlus

RATA's geocoding service

ZOOM Geocoder

Standalone geocoding utility

RHS

RATA Hosted Services (cloud-based virtual desktop environment)

Software Features

Data Import

Load loan data from LOS or CSV file

Edit Check Validation

Automated checking against FFIEC rules

Rate Spread Calculator

Compute HMDA rate spread (APR vs APOR)

Auto-Pilot

Automated workflow for common tasks

Submission File

HMDA LAR file formatted for FFIEC upload

Custom Tables

User-defined data views and reports

Global Operations

Batch updates across multiple loan records

Data Filtering

Narrow down loan records by criteria

Peer Group Analysis

Compare lending patterns to market or competitors

Deployment Options

Desktop Installation

Traditional Windows application installed locally

Virtual Desktop

RHS cloud environment (runs on Parallels)

Single-User License

One user per license

Multi-User License

Multiple concurrent users

Enterprise License

Unlimited users for institution

Support & Services

Full-Service Processing

RATA handles entire HMDA filing process for customer

Compliance Consultation

Expert guidance on regulatory requirements

Live Training

Webinar or onsite training sessions

Video Training

On-demand training library

Knowledge Base

Self-service support portal

Compliance Hotline

Direct support from compliance experts

Industry Terms

Financial Institutions

Depository Institution

Bank or credit union that takes deposits

Mortgage Company

Non-depository lender specializing in home loans

Community Bank

Small bank serving local community (typically < $10B assets)

Regional Bank

Mid-sized bank operating in multiple states

Credit Union

Member-owned financial cooperative

Farm Credit Institution

Lender specializing in agricultural loans

Loan Types

Conventional Mortgage

Non-government-backed loan (not FHA/VA/USDA)

FHA Loan

Federal Housing Administration insured loan

VA Loan

Veterans Affairs guaranteed loan

USDA Loan

Rural development loan

Jumbo Loan

Loan exceeding conforming loan limits

Portfolio Loan

Loan held by originating bank (not sold to secondary market)

Loan Origination

LOS

Loan Origination System (software for processing applications)

Core Banking System

Primary system for deposits, accounts, transactions

Underwriting

Credit decision process (approve/deny loan)

Closing

Final step where loan is funded and ownership transfers

Servicing

Managing loan after closing (payment processing, escrow, customer service)

Secondary Market

Fannie Mae

Government-sponsored enterprise that purchases mortgages

Freddie Mac

GSE that purchases mortgages

Ginnie Mae

Government agency that securitizes FHA/VA loans

Conforming Loan

Meets Fannie/Freddie purchase criteria

Non-Conforming Loan

Does not meet GSE criteria

Exam & Enforcement Terms

Regulatory Examinations

CRA Exam

Periodic evaluation of CRA performance

Compliance Exam

Review of consumer protection and fair lending compliance

Safety & Soundness Exam

Financial health and risk management review

Consent Order

Formal agreement to address regulatory violations

MRA

Matter Requiring Attention (exam finding requiring corrective action)

MOU

Memorandum of Understanding (informal enforcement action)

Documentation

Public File

CRA documents available for public review

CRA Performance Evaluation

Public report of CRA exam results

HMDA Disclosure Statement

Bank's HMDA data available to public

Fair Lending Self-Assessment

Internal review of fair lending risk

Audit Trail

Documentation of compliance decisions and processes