No, Government Monitoring Information (GMI), including an applicant's race, sex, and ethnicity, is generally no longer collected on applications for consumer home equity loans or lines of credit.
Understanding Government Monitoring Information (GMI)
Government Monitoring Information (GMI) refers to demographic data, specifically race, sex, and ethnicity, collected from loan applicants. The primary purpose of collecting GMI is to help federal agencies monitor compliance with fair lending laws and to identify discriminatory lending patterns. This data is crucial for enforcing regulations like the Home Mortgage Disclosure Act (HMDA) and the Equal Credit Opportunity Act (ECOA).
GMI Collection on Home Equity Loans
Historically, the rules around GMI collection for various dwelling-secured loans have evolved. Current regulations indicate a shift:
- For applications for consumer home equity loans or lines of credit, lenders are no longer required to collect information regarding an applicant's race, sex, and ethnicity. This applies to both home equity loans and home equity lines of credit (HELOCs).
This change aims to streamline the application process for certain types of loans while maintaining focus on fair lending oversight where it is most critical.
Where GMI is Still Collected
While GMI is not collected on consumer home equity loans, it remains a mandatory requirement for specific types of dwelling-secured applications, particularly those that are HMDA-reportable. Lenders are still required to collect GMI on credit applications primarily for:
- Home Purchase Loans: Applications for loans to purchase a dwelling.
- Refinancing of a Principal Dwelling: Applications to refinance the mortgage on an applicant's primary residence.
- Certain Home Improvement Loans: Loans specifically for home improvements on a principal dwelling that meet HMDA criteria.
This distinction ensures that regulatory bodies can continue to monitor for fair lending practices in the most significant areas of the mortgage market.
GMI Collection Status by Loan Type
To clarify, here's a summary of GMI collection requirements for common dwelling-secured loan types:
| Loan Type | GMI Collected? |
|---|---|
| Consumer Home Equity Loans/HELOCs | No |
| Home Purchase Loans | Yes |
| Refinance of Principal Dwelling | Yes |
| Certain Home Improvement Loans (HMDA-req.) | Yes |
| Other Consumer Loans (not dwelling-secured) | No |
Importance of Fair Lending
Regardless of whether GMI is collected, all lending institutions are bound by fair lending laws, such as the Equal Credit Opportunity Act (ECOA). These laws prohibit discrimination in any aspect of a credit transaction based on protected characteristics like race, color, religion, national origin, sex, marital status, age, or because all or part of the applicant's income derives from any public assistance program. Even without direct GMI collection, lenders must ensure their practices are non-discriminatory for all loan products, including home equity loans.
For more information on fair lending regulations and HMDA, you can refer to resources from the Consumer Financial Protection Bureau (CFPB) or the Federal Financial Institutions Examination Council (FFIEC).
