As we get closer to the implementation of a bulk of the new HMDA rule, I thought it would be worthwhile to go over a few of the new data points. I want to briefly touch on the requirements and then discuss what you may need to think about as you implement your process.
Data Point #1 – Universal Loan Identifier (ULI)
I get the feeling that a lot of folks out there are not aware of how daunting of a task the implementation of this “number” may be. The reason that I quote “number”, is because this lovely little identifier could be a combination of numbers and letters. So let’s start breaking this bad boy down shall we.
You start with your credit union or institution’s Legal Entity Identifier or LEI. What is a LEI you ask? A LEI is a 20 character, alpha numeric code that uniquely identifies a financial institution. This fun little code is issued by a utility endorsed by the LEI Regulatory Oversight Committee. Click here to learn more on how you can obtain a LEI. So let’s just say we have our LEI and it is 5423PWPW1879PW189785.
Next we add the credit union or financial institution’s unique identifier. Typically this would be the loan number for the file. According to the regulation this identifier can also be alpha numeric and up to 23 characters. It cannot include any information that could be used to directly identify the applicant or member. So in this example let’s say our unique identifier is 150111.
So now our ULI looks like this:
Oh, but we are just getting started. Now we have to create a check digit. In order to do that, we need to make a few conversions. We need to convert any alphabetic characters into numeric. There is a nice little conversion table in Appendix C of Reg C that shows you those conversions. So now our P’s will equal 25 and our W’s will equal 32, so our number will look like the below.
Is your head spinning yet? We’ll get you there. You can see that I also added two zero’s to the end. You will need to do this along with the letter conversion in order to calculate your check digit.
Next we apply the mathematical function mod=(n, 97), where n equals the number directly above. This is not something you can do in excel because it cannot hold that many characters, and good luck doing it by hand. Here is one link that I have found that can help get you there. You would put n in the first field and 97 in the second. Appendix C of Reg C also provides the “non-mod” calculation if you would like to calculate it with a scientific calculator. In our example 24 is our mod number.
Just when you were thought we were done… Now we are going to take our mod number of 24 and subtract that from 98 to get 74.
We will now add that 74 to the end to get…
So I may have lied about going over a couple points because at this point I only have enough energy to cover this one. Hopefully you have a loan origination system that will solve this issue for you, if not there is some work to be done. Now imagine that you have 37 other fields that need to be properly prepared for. It is kind of a daunting task when you look at it, but there is no time like the present to get started.
Maybe we can help. Click here to learn more about our Mortgage Compliance Consulting service.