Public Law 111-203, 124 Stat. Note that the language that follows is taken directly from the regulation, which appears in the References portion of this section. Although the loan volumes of most of these institutions would be too sparse for statistical analysis, the ability to conduct comparative file reviews using data retained under Regulation B has some benefit. The consumer advocacy groups stated that mandatory disaggregated collection would ensure uniform data collection practices and facilitate fair lending analysis, including identifying potential discrimination against racial and ethnic subgroups. These include white papers, government data, original reporting, and interviews with industry experts. B-2. Federal Register. Fannie Mae, Form 1003 and Freddie Mac Form 65, Demographic Information Addendum, (Aug. 2016), available at https://www.fanniemae.com/content/guide_form/urla-demographic-addendum.pdf. B prohibited practices (12 C.F.R. The Bureau Approval Notice provided that, anytime from January 1, 2017 through December 31, 2017, a creditor may, at its option, permit applicants to self-identify using disaggregated ethnic and racial categories as instructed in the revised Regulation C appendix. informational resource until the Administrative Committee of the Federal 28. d. Appendix BModel Application Forms is removed. A consumer advocacy group commenter argued that the Bureau should adopt the alternative of requiring all persons subject to the collection and retention requirement of Regulation B to permit applicants to self-identify using disaggregated race and ethnicity categories. Z8m'POn0k6j'T]]>o:gzwzBOLLX6XaXDfB{cQftl9GTFS7_^W/nX6[ Through this proposed change, creditors taking applications for loans subject to 1002.13(a)(1) but not required to submit HMDA data under Regulation C would have the option of either maintaining their current collection practices or transitioning to the revised Regulation C collection practices and the 2016 URLA. The Bureau has consulted, or offered to consult with, the prudential regulators (the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency), the Securities and Exchange Commission, the Department of Justice, the Department of Housing and Urban Development, the Federal Housing Finance Agency, the Federal Trade Commission, the Department of Veterans Affairs, the Department of Agriculture, and the Department of the Treasury, including regarding consistency with any prudential, market or systematic objectives administered by such agencies. The Bureau proposed that the 2004 URLA be removed on the cutover date the Enterprises designate for use of the 2016 URLA or January 1, 2022, whichever comes first. Many HMDA reporters are also subject to the collection requirements of 1002.13. Amend 1002.5 by adding paragraph (a)(4) to read as follows: (4) Other permissible collection of information. The Bureau believes that creditors should not be subject to differing collection requirements, and that aligning the requirements of 1002.13 and revised Regulation C furthers the purposes of ECOA by facilitating practices that promote the availability of credit to all creditworthy applicants. It outlines the rules that lenders must adhere to when obtaining and processing credit information. The Bureau is finalizing the amendments to 1002.12(b)(1)(i) and comment 12(b)-2 as proposed. The Bureau believes that depository institutions and credit unions with $10 billion or less in assets will not be differentially affected by the substantive amendments. The Bureau issued the Bureau Approval Notice under its authority in section 706(e) of ECOA on September 23, 2016, which provides that a creditor that uses the 2016 URLA without any modification that would violate 1002.5(b) through (d) would act in compliance with 1002.5(b) through (d). The Bureau does not believe that these comments are relevant to the 2017 ECOA Proposal and do not provide a basis to change the approach proposed by the Bureau in the 2017 ECOA Proposal, which, as related to 1002.13, is limited to modifications that harmonize the collection requirements of Regulation B and Regulation C. For the reasons discussed above, the Bureau is adopting 1002.13(a)(1)(i) and comments 13(a)-7 and 13(a)-8 as proposed. The Bureau believes that these provisions further the purposes of ECOA by easing overall burden on creditors and improving the quality of the data that is used to promote the availability of credit to all creditworthy applicants. See Fannie Mae, Guide Forms, available at https://www.fanniemae.com/singlefamily/selling-servicing-guide-forms (last visited Sept. 6, 2017) (listing all selling and servicing guide forms); Freddie Mac, Forms and Documents, available at http://www.freddiemac.com/singlefamily/guide/ (last visited Sept. 6, 2017) (same). These changes to Regulation C and the URLA require updates to Regulation B to ensure consistency among regulations and facilitate compliance with Regulation B and Regulation C by financial institutions. This repetition of headings to form internal navigation links The Public Inspection page may also The current Regulation B appendix includes the 2004 URLA as a model form. The Bureau believes that such a broad exception could Start Printed Page 45685significantly alter the limitations and would not be appropriate without further rulemaking and consideration. the Federal Register. 2. In the case of a conflict between state and federal law, federal law prevails. Use the PDF linked in the document sidebar for the official electronic format. The Bureau proposed to amend 1002.5(a)(4) to authorize creditors to collect such information under certain additional circumstances. Status of New Uniform Loan Application and Collection of Expanded Home Mortgage Information About Ethnicity and Race in 2017, 81 FR 66930 (Sept. 29, 2016). Authorization for this collection, consistent with the other provisions of 1002.5(a)(4), is not limited to collection using the 2016 URLA. Shaakira Gold-Ramirez, Paralegal Specialist, Kathryn Lazarev, Counsel, or James Wylie, Senior Counsel, Office of Regulations, at 202-435-7700 or https://www.consumerfinance.gov/policy-compliance/guidance/. The primary difference between these proposals and the collection permitted by final 1002.5(a)(4)(i), (ii), and (iii) would be the removal of the five-year timeframe. [45] 35. Other commenters did not directly address this alternative, but several industry commenters supported the flexibility of the proposal with respect to collection of disaggregated race and ethnicity information, implicitly opposing making this collection mandatory. The Bureau also conducted Start Printed Page 45683outreach with other Federal agencies, including the Securities and Exchange Commission, the Department of Justice, the Department of Housing and Urban Development, the Federal Housing Finance Agency, the Federal Trade Commission, the Department of Veterans Affairs, the Department of Agriculture, the Department of the Treasury, and the Federal Financial Institutions Examination Counsel (FFIEC) concerning the proposed rule. No commenters opposed the decision not to include the 2016 URLA as a model form in the Regulation B appendix, and several commenters noted that the proposed rule would encourage use and transition to the 2016 URLA. Industry commenters noted this potential conflict and expressed their support for the proposal. The Bureau requested comments on both the costs and benefits associated with this alternative approach. If the debt collector does not provide . documents in the last year, 11 Transactions not covered. edition of the Federal Register. In the 2017 ECOA Proposal, the Bureau proposed to amend comment 13(b)-1 to reference the data collection model forms the Bureau proposed to provide in the Regulation B appendix. Reg B also helps anyone who is denied credit by requiring lenders to give them an explanation. Comments related to the data collection model forms are addressed in the section-by-section analysis of the Regulation B appendix. [18] Current comment 13(b)-1 provides guidance on the forms and collection methods a creditor may use to collect applicant information under 1002.13(a). See Fannie Mae, Guide Forms, available at https://www.fanniemae.com/singlefamily/selling-servicing-guide-forms (last visited Sept. 6, 2017) (listing all current selling and servicing guide forms); see also Freddie Mac, Forms and Documents, available at http://www.freddiemac.com/singlefamily/guide/ (last visited Sept. 6, 2017) (same). The Bureau is therefore not requiring the collection of disaggregated categories for Regulation B-only creditors. This site displays a prototype of a Web 2.0 version of the daily The Consumer Credit Protection Act of 1968 (CCPA) is federal legislation outlining disclosure requirements for consumer lenders. (b) Obtaining information. iii. [44] Local laws. Section 1002.12(b)(1) provides that creditors must retain records for 12 months for business credit, except as provided in 1002.12(b)(5). legal research should verify their results against an official edition of A mortgage loan application must be documented using the URLA in the mortgage loan file for the loan to be eligible for sale to the Enterprises. If it appears that action is warranted, the Bureau will engage in further rulemaking as appropriate. The Bureau acknowledges that the preamble to the proposed rule stated that 1002.12(b)(1) required retention of certain records for 25 months and did not acknowledge the different 12 month period for business credit provided for in 1002.12(b)(1). [42] Creditors can ask about the number of children, their ages, and the borrower's financial obligations relating to the children. the current document as it appeared on Public Inspection on Section IV. Written applications. Federal Reserve. The Bureau proposed to add 1002.5(a)(4) to authorize a creditor to obtain information in certain additional specified circumstances other than as described in 1002.5(a)(2). These costs include greater operational costs and one-time database upgrades. First, for creditors collecting disaggregated applicant demographic information pursuant to 1002.13(a)(1)(i)(B) and (ii), the Bureau proposed to amend the Regulation B appendix to cross-reference the data collection model form included in the revised Regulation C appendix. Under Dodd-Frank Act section 1022(b)(1), the Bureau has authority to prescribe rules as may be necessary or appropriate to enable the Bureau to administer and carry out the purposes and objectives of the Federal consumer financial laws and to prevent evasions thereof. The rule amends the Regulation B appendix to provide two options: A model form for collecting aggregate applicant race and ethnicity information and a cross-reference to the Regulation C appendix model form for collecting disaggregated applicant race and ethnicity information. Sc~|~??lW@l Other permissible collection of information. If a creditor inadvertently obtains the monitoring information in a dwelling-related transaction not covered by 1002.13, the creditor may process and retain the application without violating the regulation. 2. that agencies use to create their documents. Comments on the benefits and costs of the rule are also discussed above in the section-by-section analysis of the preamble. Federal Register issue. If it is not evident on the face of an application that it was received by mail, telephone, or via an electronic medium, the creditor should indicate on the form or other application record how the application was received. documents in the last year, 983 Information that a creditor is allowed to collect pursuant to a state statute or regulation includes information required by a local statute, regulation, or ordinance. 4, 2017). Regulation B also includes certain optional model forms for use in complying with certain Regulation B requirements, including a model form for complying with 1002.13 that is a 2004 version of the Uniform Residential Loan Application (URLA) issued by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, the Enterprises). The Bureau believes that, absent this change, entities that currently report race and ethnicity data under Regulation C could conclude that they have different obligations under Regulation B and Regulation C once the 2015 HMDA Final Rule goes into effect on January 1, 2018. As discussed in the Section 1022(b) analysis for the 2015 HMDA Final Rule, collection of disaggregated race and ethnicity data can enhance the ability of regulators, researchers and community groups to conduct fair lending analysis. Definition. 41. [30] 3501 et seq. hb```l~1DFFAFFfFFAAFg=5v_-09# O;$pIr$;[S3kX}],FO"em
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In developing the final rule, the Bureau has considered the potential benefits, costs, and impacts. One of these commenters stated that the collection of applicant demographic information is duplicative of Regulation C and that removing this requirement in Regulation B would reduce burden. Accordingly, the Bureau is finalizing the Regulation B appendix as proposed, without including the 2016 URLA. the official SGML-based PDF version on govinfo.gov, those relying on it for ECOA section 703 serves as a source of authority to establish rules concerning the taking and evaluation of credit applications, collection and retention of applicant demographic information concerning the applicant or co-applicant, use of designated model forms, and substantive requirements to carry out the purposes of ECOA. Director, Bureau of Consumer Financial Protection. A place where you can easily find solutions and ask questions The Bureau did not intend to extend the record retention period under Regulation B for business credit transactions through the proposal and this final rule does not do so. Industry commenters supported the change, with several confirming the potential benefits noted above. Regulation B implements the Equal Credit Opportunity Act (ECOA)[1] For instance, the 2015 NCUA Call Report and the 2015 Nationwide Mortgage Licensing System & Registry (NMLS) Mortgage Call Report data include 489 credit unions and 161 non-depository institutions that originated at least 25 closed-end mortgages that are not found in the 2015 HMDA data. 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