What is the purpose of the Home Mortgage Disclosure Act (HMDA)?

The purpose of the Home Mortgage Disclosure Act (HMDA) is to provide public information on how financial institutions serve housing needs. The act was enacted to ensure transparency in lending practices and to empower consumers by providing access to data about mortgage lending in their communities. This data helps regulators and the public analyze whether lenders are serving the housing needs of their communities, particularly regarding access to credit and fair lending practices. By disclosing information about loan applications, approvals, and denials, HMDA aims to shine a light on potential lending discrimination and assess the availability of mortgage credit in different geographic areas. This encourages accountability and helps policymakers and community organizations address any disparities in lending practices.