On March 24, 2017, the Consumer Financial Protection Bureau (CFPB) proposed amendments to Regulation B to “provide additional flexibility for mortgage lenders concerning the collection of consumer demographic information.”  The amendments were also necessary to resolve the current rule and timing differences between Regulation B (Equal Credit Opportunity Act (ECOA)) and Regulation C (Home Mortgage Disclosure Act (HMDA)).

Regulation B implements the ECOA, a federal civil rights law prohibiting lenders from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, or other protected characteristics.  The CFPB’s proposal would make three substantive changes to Regulation B—along with other clarifications and technical corrections—to align Regulation B and Regulation C (as amended by the 2015 HMDA Final Rule) requirements concerning collection of consumer race and ethnicity information.


The first substantive change would give lenders who collect race and ethnicity information pursuant to Regulation B “the option of permitting applicants to self-identify using the disaggregated race and ethnicity categories required by the 2015 HMDA Final Rule.”  The CFPB notes that this would allow individual lenders that report race and ethnicity in accordance with Regulation C and the 2015 HMDA Final Rule to comply with Regulation B without further action.  On the other hand, lenders that do not report under HMDA but maintain race and ethnicity data under Regulation B “would have the option of recording data either using the existing aggregated categories or the new disaggregated categories.”[1]

Notably, the CFPB believes that, absent this change, lenders that currently report race and ethnicity data under HMDA could conceivably have different obligations under Regulation B and Regulation C once the 2015 HMDA Final Rule goes into effect on January 1, 2018.  The CFPB hopes this proposal will relieve lenders from the unnecessary burden of collecting both aggregated and disaggregated data.

Model Forms

The second change would add and remove certain model forms from Regulation B, including adding a form that cross-references the data collection model form in revised Regulation C, thereby supporting the industry’s ability to use consistent forms and practices.  The CFPB hopes this will aid the mortgage industry as it works to adopt new application forms—including the revised Uniform Residential Loan Application prepared by the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac).

Collection of Consumer Information

Lastly, the amendments would allow lenders to collect ethnicity, race, and sex information from mortgage applicants in certain cases where the creditor is not required to report under HMDA and Regulation C.  These cases “include creditors that submit HMDA data even though not required to do so, and creditors that submitted HMDA data in any of the preceding five calendar years.”

The CFPB believes this change would primarily benefit lenders that may be near the loan volume reporting threshold (i.e., required to report under HMDA and Regulation C in some years but not others), or may be uncertain about their reporting status.  By permitting voluntary collection, the Bureau hopes to ease the burden of Regulation C compliance on some lenders and provide certainty regarding Regulation B compliance.

For any final rule based on these amendments, the CFPB has proposed an effective date of January 1, 2018—the same date as the 2015 HMDA Final Rule.

Comments on the CFPB’s proposal must be received within 30 days following publication in the Federal Register.

[1] The 2015 HMDA Final Rule provides that financial institutions must permit applicants to self-identifying using new disaggregated ethnic and racial subcategories.  For example, the aggregate Hispanic or Latino category must be broken down into the disaggregated subcategories of Mexican, Puerto Rican, Cuba, or Other Hispanic or Latino.