QUESTION
Our banking department has sent us a letter directing us to post our HMDA availability notice on our website. I do not believe we are required to do so.
As the General Counsel, I am responsible for ensuring that our website has all appropriate consumer notices for our online business channel. I cannot find any regulation or statute requiring us to post the HMDA notice on our website. I want a second opinion.
Are we required to post the HMDA notice on our website?
ANSWER
Financial institutions are required to post several different kinds of public notices on their premises. One type of required notice announces compliance with certain regulations. For example, the rules requiring highly visible Equal Housing Lender posters are well known.
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For information about our
HMDA Compliance Services,
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To re-state your question, in part, if an institution conducts transactions online, where should such notices be posted?
On a website, the absence of a physical location in which to post regulatory notices raises two questions:
1) Which, if any, of the posting requirements apply to a website?
2) If a posting is required on a website, where should it appear?
We may gain some insight into these questions by examining the specific regulations. For example, HMDA (for institutions with an office located in a metropolitan area) requires a notice of availability of HMDA data.
However, the applicable regulation does not specifically address whether the required notices must be posted on a website. Therefore, the language of the regulation must be consulted to determine if a particular notice should be posted on the website.
With respect to the HMDA Notice,[i] the general requirements for posting are as follows:
“A financial institution shall post a general notice about the availability of its HMDA data in the lobby of its home office and of each branch office physically located in each MSA and each MD.”
An MSA is a metropolitan statistical area. An MD is a metropolitan division.[ii]
According to these requirements, the HMDA notice must be posted in an institution’s main office and each branch office. Because a website is neither a main office nor a branch, it would seem that these notices would not be required on a website.
This interpretation of the rules also seems to be the view of the regulatory agencies. In the publication entitled Federal Financial Institutions Examination Council Guidance on Electronic Financial Services and Consumer Compliance, the agencies discuss the various compliance regulations and their applicability to Internet banking. The publication does not mention HMDA notices at all.
Although the HMDA Notice may not be required, financial institution management may consider including it as a precaution or provide internet consumers with the same information available to customers in the institution’s lobby.
Chairman & Managing Director
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[i] 12 CFR
1003.5(e)
[ii] “For
purposes of HMDA, the term is interchangeable with "metropolitan
area." The underlying concept of an MSA is that of a core area containing
a large population nucleus, together with adjacent communities having a high
degree of economic and social integration with that core. MSAs are composed of
entire counties or county equivalents. Every MSA has at least one urbanized
area with a population of 50,000 or more. A metropolitan division is a subset
of an MSA having a single core with a population of 2.5 million or more. For
reporting and disclosure purposes of HMDA, an MD is the relevant geography, not
the MSA of which it is a division.” See HMDA Glossary provided by FFIEC.
