What is one of the main purposes of the Home Mortgage Disclosure Act (HMDA) and Regulation C?

The primary purpose of the Home Mortgage Disclosure Act (HMDA) and Regulation C is to identify patterns of discrimination in lending practices. This regulation was established to ensure transparency in the mortgage lending process by requiring financial institutions to collect and report data related to their lending activities.

By mandating that lenders disclose information about the demographics of loan applicants, including race, ethnicity, and gender, as well as details about the loans themselves, HMDA aims to uncover any discriminatory practices that may exist in the mortgage market. This data allows regulators, policymakers, and the public to analyze lending trends and ensure compliance with fair lending laws. The ability to shine a light on potential discriminatory behaviors helps promote equity in housing opportunities for all individuals and communities, reinforcing the goal of combating systemic inequality.

The other answers do not align with the intended purpose of HMDA. For example, while regulating interest rates might seem relevant, it falls outside HMDA's scope, which focuses on lending practices and transparency. Improving loan processing times and enhancing consumer credit scores are also not objectives of HMDA; instead, these areas are typically governed by other financial regulations and practices.