Which of the following is NOT a stated purpose of the Home Mortgage Disclosure Act (HMDA)?

The Home Mortgage Disclosure Act (HMDA) aims to promote lending transparency and ensure that financial institutions are serving the needs of their communities effectively. One of the key purposes of HMDA is to identify discriminatory lending patterns, which helps regulators and the public understand whether certain groups are being unfairly denied loans.

Providing information on community credit needs is another important purpose of HMDA, as it enables local governments and community organizations to identify gaps in credit availability and work towards improving access to credit. Additionally, distributing public investments effectively aligns with the goal of ensuring that financial institutions contribute to the development of their communities and allocate resources where they are most needed.

However, determining borrower risk based on demographics is not a stated purpose of HMDA. While demographic data may be collected as part of the reporting requirements, it is not meant to assess borrower risk directly. Instead, HMDA focuses on the fair treatment of borrowers and the analysis of lending practices across different demographic groups to identify potential discrimination in lending.