HMDA data on application forms must be collected for monitoring and enforcement, though the data may not be used in making a credit decision.

• A. It must be collected and considered in credit decisions
• B. It is optional
• C. It must be collected but may not be considered in credit decisions
• D. It is used only for marketing

Answer: (C)

HMDA data on mortgage applications are collected to monitor lending practices and enforce fair-lending laws, not to drive credit decisions. Regulators use this information to detect patterns of discrimination and to ensure compliance with ECOA, so the data are gathered and reported for oversight rather than to influence whether a loan is approved or denied. That’s why the correct choice states that the data must be collected but may not be considered in credit decisions. It isn’t optional, and it isn’t used solely for marketing.