Which federal legislation requires visual determination or surname basis for race or national origin when not provided by the borrower?

The correct answer is tied to the Home Mortgage Disclosure Act (HMDA), which mandates that financial institutions collect and report certain information about mortgage applications. One important aspect of HMDA is that it requires lenders to provide information on the race and ethnicity of the applicant to monitor compliance with fair lending laws.

When applicants do not provide this information voluntarily, the HMDA permits lenders to rely on visual observation or surname to make a determination about the race or national origin of the borrower. This is crucial for ensuring that lending practices are equitable and that lenders can identify potential discrimination in their lending patterns.

The significance of this requirement lies in the commitment to promote transparency and equal opportunity in accessing mortgage loans, working towards eliminating bias in lending practices. By enabling lenders to make this determination when not supplied by the borrower, the HMDA ensures comprehensive data collection that can be analyzed for fairness in mortgage lending across different demographic groups.

While the other legislation mentioned, such as the Truth in Lending Act, Fair Credit Reporting Act, and Equal Credit Opportunity Act, addresses various aspects of lending and consumer protection, they do not specifically include the visual determination or surname basis for race or national origin when such information is not provided by the borrower.