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Thursday, July 21, 2016

“Branch Office” for HMDA Purposes

QUESTION
We are a for-profit institution and have been reviewing our HMDA category based on being a “branch office.” For purposes of HMDA, what is a “branch office"?

ANSWER
Let’s first understand that a “branch office” is defined differently for depository institutions and non-depository institutions.       

A “branch office” of a depository institution is any office of a bank or savings association that is approved as a branch by a federal or state supervisory agency. A branch office does not include a free-standing electronic terminal, such as an automated teller machine, loan production office, an office of any affiliate, or an office of a third party (such as a loan broker). [12 CFR § 203.2(c)( 1); 12 CFR Part 203, Supplement I, § 203.2(c)-2]

A “branch office” of a credit union is any office where member accounts are established or loans are made, whether or not the office has been approved as a branch by a federal or state agency. [12 CFR § 203.2(c)( 1); 12 CFR Part 203, Supplement I, § 203.2(c)-1]

With respect to a for-profit institution, a “branch office” of such institution is any office of a for-profit mortgage institution that is not a bank, savings association or credit union (i.e., a non-depository institution) that takes applications from the public for home-purchase loans, home-improvement loans or refinancings. Also, a non-depository institution is deemed to have a branch office in a metropolitan area if, during the preceding calendar year, the institution received applications for, originated, or purchased five or more home-purchase loans, home-improvement loans or refinancings related to property in the metropolitan area. [12 CFR § 203.2(c)( 2); 12 CFR Part 203, Supplement I, § 203.2(c)-3]

Jonathan Foxx 
President & Manaing Director 
Lenders Compliance Group