Under HMDA, is applicant demographic information optional to disclose?

• A. Yes, it is optional to disclose
• B. No, it is mandatory
• C. Not collected at all
• D. Only disclosed for business loans

Answer: (A)

The key idea is that HMDA requires collecting demographic information about applicants, but providing that information is not mandatory for the applicant. Lenders must collect and report race, ethnicity, and sex data, but if an applicant declines to provide it, the lender can record that status (often as “Not Provided by Applicant”) and still submit the loan data. This structure lets the data serve fair-lending monitoring while respecting individual privacy. So, the demographic information is optional for the applicant to disclose, even though the lender’s reporting under HMDA aims to capture whatever data is available, including the “not provided” option.