What is the main requirement of the Home Mortgage Disclosure Act?

The main requirement of the Home Mortgage Disclosure Act (HMDA) is to disclose data on mortgage applications and loans. This act mandates that financial institutions report specific information about their lending practices, including details on the demographics of borrowers and the types of loans they receive. The purpose of these disclosures is to increase transparency in the mortgage market, allowing regulators, policymakers, and the public to assess whether lending practices are equitable across different populations and geographic areas. By promoting accountability through data collection, the HMDA helps identify potential discrimination and ensures that all communities have access to mortgage credit.

While preventing predatory lending and ensuring affordability are important aspects of ethical lending practices, the primary focus of the HMDA is on the data reporting aspect. Similarly, credit counseling, while beneficial for consumers, is not a requirement of this particular act.