On Form 1003, Section X: Information for Government Monitoring Purposes is used to comply with which federal law?

The correct choice aligns with the Home Mortgage Disclosure Act (HMDA), which mandates that lenders collect and report specific information about mortgage applications to ensure that they are serving the housing needs of their communities, particularly in terms of lending practices toward different demographic groups.

Form 1003 includes Section X specifically for gathering demographic information, such as race, ethnicity, and sex, which is crucial for the regulatory agencies to analyze and assess whether financial institutions are complying with fair lending laws and serving the housing needs of the community. This data helps to identify patterns of discrimination or inequity in lending practices by comparing the demographics of applicants to the demographics of the communities served.

Other federal laws mentioned do have significance in lending practices. However, they do not specifically require the collection of demographic information in the same manner as HMDA does. The Community Reinvestment Act focuses on encouraging banks to meet the credit needs of all segments of their communities, while the Fair Credit Reporting Act governs how credit information is handled. The Truth in Lending Act is concerned with providing clear disclosure of the terms of credit. None of these laws directly relate to the requirements for Section X of Form 1003 as the Home Mortgage Disclosure Act does.