What is a potential consequence for a company that fails to comply with HMDA reporting?

The correct answer is based on the serious repercussions associated with non-compliance with the Home Mortgage Disclosure Act (HMDA). Companies are required to report specific data related to mortgage loans to ensure transparency and prevent discrimination in lending. Failure to comply with these reporting requirements can lead to significant legal penalties and fines imposed by regulatory authorities.

When a company does not adhere to HMDA, it risks facing scrutiny from entities like the Consumer Financial Protection Bureau (CFPB), which oversees compliance with such laws. The potential penalties can be costly and damaging to an organization's financial health and reputation. These consequences can serve as a powerful incentive for companies to comply with the regulations established under HMDA to promote fair lending practices.