2018 HMDA Prep: Get Your LEI and Check Your Digits!

4/6/2017 - By Jennifer Paradise, CRCM

What does a LEI have to do with HMDA?

Every HMDA reporting institution must have a Legal Entity Identifier (LEI), a 20-digit alpha-numeric code containing key reference information that identifies legal entities participating in financial transactions. For example, your LEI might look something like: 10Bx939c5543TqA1144M.  

How do I get the LEI?

The Global Legal Entity Identifier Foundation (GLEIF) manages the use of the LEI and is headquartered in Basel, Switzerland.  Learn more about the GLEIF here.  The LEI is obtained from issuing organizations, also referred to as Local Operating Units (LOUs), who offer registration and renewal services and acts as the primary interface for legal entities wishing to obtain an LEI.  A list of LOUs is available here.  If you took a peek at the list, you might have noticed that the LOUs on the GLEIF web site are companies outside the United States.  The American Bankers Association (ABA) recommends CUSIP Global Services (CGS), which is managed on behalf of the ABA and is based in the United States. If you opt to use CUSIP, apply for the LEI here.

It is possible that your institution may already have an LEI and you just aren't aware of it.  Click here to perform a search of the LEI Index on the GLEIF web site to see if you already have one. 

What's the ULI?

Institutions subject to HMDA reporting must provide a Universal Loan Identifier (ULI) for covered loans and applications. The ULI can be up to 23 additional characters (for a total of 45) and should include the LEI and a loan or application identifier (i.e., 999143X) and will look like this: 10Bx939c5543TqA1144M999143X. The last two characters of the ULI must contain a two-character "check digit". 

What's a "check digit"?

A check digit is used to validate that a sequence of numbers and/or characters are correct. A mathematical function is applied to the sequence of numbers and/or characters, to generate the check digit.  This mathematical function is found here in Appendix C to Part 1003, but don't freak out when you see this formula because eventually the CFPB will be providing a check digit generator tool, or one may be generated by your Loan Origination System (LOS).  You should consult with your vendor now to confirm whether or not they will generate it. 

Ultimately, the final ULI will look like this: 10Bx939c5543TqA1144M999143X38.

So, if you do not already have one, get your LEI from an LOU like CUSIP as soon as possible, or ASAP (since we love our acronyms in banking) because you will need it for the ULI, which must be entered on the HMDA-LAR.  Say that ten times fast!

Preparing for the 2018 HMDA changes can seem overwhelming. If you have any questions or concerns about these or other issues, email me or any member of our Financial Institutions Consulting Team.

 About the Author  |  Jennifer Paradise, CRCM

Jennifer is a consultant in the Financial Institutions Advisory Group at Saltmarsh, Cleaveland & Gund and has been serving the financial institutions industry since 1990. She is primarily involved in performing fair lending, loan internal audit, loan compliance, and other consulting services for the firm's financial institution clients throughout the region. 

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