On Nov. 28, 2023, the Consumer Financial Protection Bureau (CFPB) issued a $12 million Consent Order against Bank of America (BOA) for Home Mortgage Disclosure Act (HMDA) violations. BOA, with $2.5 trillion in assets, has over 4,500 loan officers and receives over 300,000 mortgage loan applications per year. HMDA requires financial institutions to ask applicants for most mortgage loans for their race, ethnicity and sex. However, applicants are not required to provide this information. When a consumer applies over the phone and does not provide the requested race, ethnicity or sex information, the lender must record and report the information was not provided by the applicant.

The CFPB found between 2016 and late 2020, at least hundreds of BOA’s loan officers were not asking applicants for their race, ethnicity and sex. They instead falsely recorded the applicants chose not to provide the information. In 2020, after receiving a single customer complaint regarding the collection of race, ethnicity and sex, BOA reviewed its HMDA data collection practices. During this review they found 113 loan officers who had recorded applicants chose not to provide their race and ethnicity on 100% of the applications they took over a three-month period. Later, BOA identified another roughly 290 loan officers who also recorded applicants chose not to provide their race and ethnicity on 100% of the applications they took over one three-month period.

Turn to our regulatory compliance specialists for more information on how to avoid HMDA compliance violations.