What is a primary purpose of HMDA and Regulation C?

The primary purpose of the Home Mortgage Disclosure Act (HMDA) and Regulation C is to assist in determining whether financial institutions are effectively meeting the housing needs of their respective communities. This is achieved through the collection and disclosure of lending data by mortgage lenders. By mandating that these institutions report certain information, such as the number and types of loans made, demographic information about borrowers, and the locations of their lending activities, HMDA aims to promote transparency in residential mortgage lending. This transparency allows regulators, community organizations, and policymakers to analyze lending patterns and ensure fair access to housing for all individuals, particularly those in underserved or minority communities.

The focus on identifying if institutions are successfully serving community housing needs is vital for addressing issues related to inequity and discrimination in lending practices, ultimately fostering a fairer housing market.