BOARD OF GOVERNORS 

or THE 

FEOERAL RESERVE SYSTEM 

WASHINGTON, D. C. 20551 

May 16,2013 

SANDRA F. BRAUNSTEIN 

DIRECTOR 

DIVISION OF CONSUMER 

AND COMMUNITY AFFAIRS 

CA 13-8 

TO THE OFFICERS AND MANAGERS IN CHARGE OF CONSUMER AFFAIRS 

SECTIONS: 

SUBJECT: Guidance on the Use of 2010 Census Data in Fair Lending Examinations 

This letter provides information about the Federal Reserve's use of2010 census data 

when conducting fair lending examinations. 

BACKGROUND 

The Federal Financial Institutions Examination Council (FFIEC) publishes census data as 

part of the Home Mortgage Disclosure Act (HMDA) aggregate and disclosure data and as a 

separate census file, both of which are publicly-available on the FFIEC website. The census data 

are used to provide context when assessing HMDA and Community Reinvestment Act (CRA) 

data and in conducting fair lending reviews. Historically, the census data base file was 

developed by the FFIEC every 10 years and was updated annually to reflect any changes, such as 

changes to the Metropolitan Statistical Area (MSA) and Metropolitan Division (MD) boundaries 

announced by the Office of Management and Budget (OMB). 

There are three changes related to the Census Bureau's release ofthe 2010 decennial 

census data that affect fair lending examinations. First, there are changes to the census tracts. 

Certain census tract boundaries changed and some census tracts were eliminated or created to 

reflect changes in population and physical structures, such as new highways. Further, the racial 

and ethnic makeup of census tracts may have changed. 

Second, the source of detailed population and housing data is now based on the American 

Community Survey (ACS) rather than the census. Unlike the previous decennial census that 

counted the nation's population and surveyed a smaller segment ofthe population to collect 

detailed information, the 2010 Census. was used only to count the nation's population while the 

ACS was used to collect more detailed information. The ACS is a nationwide survey designed 

to provide local communities with reliable and timely demographic, social, economic, and 

housing data each year. Geographic areas with populations of 60,000 and greater have data 

released annually for one-, three-, and five-year estimates; areas with populations greater than 

25,000 have data released for three- and five-year estimates; and all areas down to the census 

tract level have data released for five-year estimates. The U.S. Census Bureau first released ACS 

data for geographies of all sizes (the "five-year estimate data") in 2010 and will continue to 

publish the five-year estimate data as a rolling average on an annual basis. 
Third, the FFIEC will now update the census data file every five years. In response to the 

change by the U.S. Census Bureau, the FFIEC announced in October 2011 that it was 

incorporating the 2006-2010 ACS five-year estimate data into the FFIEC-published census data 

file. The FFIEC plans to update the census information in the base file every five years. The 

data is to be utilized for consumer compliance and CRA examination purposes in the same 

manner that the decennial data has been used in the past. 

In 2011 and 2012, the FFIEC took a number of steps to address the 2010 census data 

changes. In October 2011, the FFIEC released the MSA, state, county and tract list based on the 

geocode information published by the U.S. Census Bureau. The FFIEC also announced that 

HMDA and CRA data collected in 2012 should be geocoded using the updated census tracts. In 

January 2012, the FFIEC updated its online Geocoding System using 201 0 census tract listings. 

In June 2012, the FFIEC released the updated census demographic file, including population and 

housing characteristics based on the 2006-2010 ACS five-year estimate data. 

FAIR LENDING EXAMINATIONS 

The updated data from the 2010 census will result in changes to some aspects of fair 

lending examinations conducted by the Federal Reserve. Fair lending examinations often 

include reviews ofHMDA data for mortgages, CRA data for small business loans, and other data 

for non-mortgage loans. For many fair lending reviews, there is a need to geocode the data by 

census tract. Given the changes to the FFIEC census data base file, 2010 and 2011loan data 

should be analyzed using 2000 census information, and loan data from January 1, 2012 forward 

should be analyzed using 2010 census data. With the transition from one decennial census to 

another, some examinations will include a review of performance that spans data from both the 

2000 and 201 0 censuses. For example, in the case of an examination that includes both 2011 and 

2012loan data, the examination will apply census 2000 data to the 2011 loan data and will apply 

census 201 0 data to the 2012 loan data. This is an important distinction as institutions and 

Reserve Banks evaluate the loan data for indicators of fair lending risk. 

For questions related to use of the 2010 census data when conducting fair lending 

examinations, please contact Maureen Yap, Special Counsel/Manager, Fair Lending 

Enforcement, at (202) 452-2642, or Lynn Gottschalk, Senior Economist, Fair Lending 

Enforcement, at (202) 452-5099. 

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Cross References: 

CA Letter 12-4, "Guidance on the Usage of2010 Census Data in Community Reinvestment Act 

Examinations." 

FFIEC 2010 Census Update Notice. 

FFIEC Press Release dated October 19, 2011 announces use of American Community Survey 

(ACS) data into the FFIEC-published census data file, 

http://www.ffiec.gov/press/pr101911 ACS.htm. 

FFIEC releases 2010 census tract listing including MSA and Tract Median Family Income data. 

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