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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?"
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 is president and managing director of Lenders Compliance Group, Brokers Compliance Group, Servicers Compliance Group and Vendors Compliance Group, national companies devoted to providing regulatory compliance advice and counsel to the mortgage industry. He may be contacted by phone at (516) 442-3456, by e-mail at JFoxx@LendersComplianceGroup.com or visit LendersComplianceGroup.com.