What is the main purpose of the Home Mortgage Disclosure Act (HMDA)?

The Home Mortgage Disclosure Act (HMDA) primarily aims to ensure fair lending practices. Enacted in 1975, the HMDA requires financial institutions to collect and disclose data about their mortgage lending activities. This data collection is vital for identifying patterns in lending that could indicate discrimination or disparity in access to mortgage loans among different demographics. By making this information publicly available, the HMDA serves to promote transparency and accountability in the lending process, allowing regulators and the public to monitor compliance with fair lending laws.

The other available options do not encapsulate the essence of HMDA's purpose. While it does not regulate mortgage interest rates or create standard loan application forms, its focus on promoting fair lending practices allows it to address discriminatory behaviors in lending and encourage equitable access to housing finance.