Publications:
Missing Race Data in HMDA and the Implications for the Monitoring of Fair Lending
Compliance
by Jason Dietrich
Abstract
Home Mortgage Disclosure Act (HMDA) data contains high and increasing percentages of
applications that lack race data. As HMDA data are an integral part of current efforts
to monitor banks' compliance with fair lending laws, regulators must understand the
reasons for, and consequences of, these patterns. Using HMDA data from 1993 to 1999,
this study examines trends in missing race data, discusses possible reasons for the
findings, and summarizes the salient regulatory issues. The results indicate that
race data are missing for systematic reasons and therefore introduce bias and
efficiency problems into fair lending exams. Applications that contain race
data have higher origination rates than applications without race data, and
applications from Blacks and Hispanics may be more likely to be without race
data than whites. These findings suggest that denial rate disparities used
during early stages of fair lending exams may be understated and that
statistically-modeled estimates of racial effects used during latter
stages may be overstated.
Disclaimer
As with all OCC Working Papers, the opinions expressed in this paper are those of the author alone, and
do not necessarily reflect the views of the Office of the Comptroller of the Currency or the Department of the Treasury.
Any whole or partial reproduction of material in this paper should include the following citation:
Jason Dietrich " Missing Race Data in HMDA and the Implications for the Monitoring of Fair
Lending Compliance, " Office of the Comptroller of the Currency, E&PA Working Paper
2001-1, March 2001.
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