for better understanding how a document is structured but edition of the Federal Register. 1691 et seq. 2. He has 8 years experience in finance, from financial planning and wealth management to corporate finance and FP&A. 5512(b)(1)). of the issuing agency. First, Regulation B-only creditors will not be required to permit applicants to self-identify using disaggregated ethnicity and race categories, likely resulting in few creditors adopting disaggregated ethnicity and race categories. Specifically, Subpart payors.ADefines terms and provides for administrative enforcement Subpart BSpecifies availability schedules, or time frames within which banks must make funds Section 1002.13 sets forth the scope, required information, and manner for the mandatory collection of certain protected applicant-characteristic information under Regulation B. Relative to current Regulation B following the effective date of the 2015 HMDA Final Rule, the final rule provides clear benefits to entities that will be required to collect and report race and ethnicity data under HMDA. Although these entities need not make any changes to their race and ethnicity collection procedures, they may desire to do so in the future by adopting the 2016 URLA. Finally, demographic data retained by Regulation B-only creditors is not reported under Regulation C. Consequently, most oversight and analysis of demographic data retained by Regulation B-only creditors will be done only by regulators, whereas researchers and community groups also conduct analysis of HMDA data reported under Regulation C. The Bureau believes the final rule will not impose any costs on consumers. Note that the language that follows is taken directly from the regulation, which appears in the References portion of this section. This final rule adopts the proposed rule without making changes that would affect the Bureau's conclusion that the rule will not have a significant economic impact on any small entities. Section 1002.13(c) sets forth disclosures a creditor must provide to an applicant when collecting the information set forth in 1002.13(a). A general description of the regulation, by section, follows. 7. Accordingly, the Bureau is not making disaggregated race and ethnicity categories mandatory for compliance with Regulation B at this time. Commenters also noted that it would facilitate use of the 2016 URLA. 210.1 Authority, purpose, and scope. A creditor that enters information items from a written application into a computerized or mechanized system and makes the credit decision mechanically, based only on the items of information entered into the system, may comply with 1002.12(b) by retaining the information actually entered. The same commenter also cited a report by health researchers discussing, among other topics, that observer-selected race, often used for death certificates, may not match self-selected race. The Bureau does not have an estimate of the number of rural community banks that are currently exempt from HMDA reporting and originate at least 25 loans per year. 82 FR 16307, 16313, and 16317-18 (Apr. Show (i) A refusal to grant credit in substantially the amount or on substantially the terms requested in an application unless the creditor makes a counteroffer (to grant credit in a different amount or on other terms) and the applicant uses or expressly accepts the credit offered; Official interpretation of Paragraph 2 (c) (1) (i). A number of commenters recommended alternative approaches to proposed 1002.13(a)(1)(i). As discussed above in the section-by-section analysis for 1002.5(a)(4), the Bureau is also adopting new 1002.5(a)(4)(vi) to permit collection of applicant demographic information for second or additional co-applicants in certain circumstances, thereby providing additional optionality for creditors to maintain consistent collection practices under Regulation B and Regulation C.Start Printed Page 45689. The Bureau also requested data on the number of firms that might be interested in voluntary collection under this provision. 1691 et seq., 12 CFR part 1002. 1. The Bureau, however, declines to set forth specific instructions on how a data user should evaluate the information collected pursuant to 1002.13 or Regulation C as the Bureau only sought comment on data collection practices under 1002.13. To the extent that consumers would benefit from disaggregated race and ethnicity collection, this alternative would provide greater benefits than the Bureau's proposal. If an applicant applies through an electronic medium without video capability, the creditor treats the application as if it were received by mail. The President of the United States issues other types of documents, including but not limited to; memoranda, notices, determinations, letters, messages, and orders. The first will give persons who collect and retain race and ethnicity information in compliance with Regulation B the option of permitting applicants to self-identify using the disaggregated race and ethnicity categories required by revised Regulation C. In practice, this will allow entities that report race and ethnicity in accordance with revised Regulation C to comply with Regulation B without further action, while entities that do not report under Regulation C but record and retain race and ethnicity data under Regulation B will have the option of recording data either using the existing aggregated categories or the new disaggregated categories. documents in the last year, 24 Many HMDA reporters are also subject to the collection requirements of 1002.13. 18. 2. The Bureau also proposed to amend comment 12(b)-2 to require retention of applicant demographic information obtained pursuant to 1002.5(a)(4). Marital status is also required if the applicant resides in a community property state. These race and ethnicity categories correspond to the Office of Management and Budget (OMB) minimum standards for the classification of Federal data on ethnicity and race. corresponding official PDF file on govinfo.gov. Video and other electronic-application processes. Commenters noted that the five-year timeframe for 1002.5(a)(4)(i), (ii), and (iii) was realistic and would provide enough time to allow institutions to keep their systems updated, but not so long that it would be unlikely the institution would become a HMDA reporter again. Aspects of overdraft program implementation or management that is outsourced to third parties, including debt collection practices, must be actively overseen by the bank to ensure compliance. However, the commenter did not address the Bureau's conclusion, mentioned in the proposal and again above, that the benefits of mandatory disaggregated collection are quite limited. [11] 09/29/2017 at 8:45 am. provide legal notice to the public or judicial notice to the courts. on NARA's archives.gov. Appendix B to 12 CFR part 1003 provides a data collection model form for collecting information concerning an applicant's ethnicity, race, and sex that complies with the requirements of 1002.13(a)(1)(i)(B) and (ii). A refinancing occurs when an existing obligation is satisfied and replaced by a new obligation undertaken by the same borrower. These include white papers, government data, original reporting, and interviews with industry experts. collection, as the CFPB defines by rule, and their service providers . documents in the last year, 861 The Bureau received several comments on the proposal concerning the 2015 HMDA Final Rule. The Consumer Credit Protection Act of 1968 (CCPA) is federal legislation outlining disclosure requirements for consumer lenders. In keeping with the broad reach of the statute's prohibition, the regulation covers creditor activities before, during, and after the extension of credit. and services, go to (B) The categories and subcategories for the collection of ethnicity and race set forth in appendix B to 12 CFR part 1003. 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. For those HMDA reporters, the rule provides clarity that compliance with applicant information collection under Regulation C generally satisfies similar requirements under Regulation B. HMDA reporters who at some point no longer are required to comply with HMDA can continue to collect certain applicant information as provided for in 1002.5(a)(4). But an application for both a temporary loan to finance construction of a dwelling and a permanent mortgage loan to take effect upon the completion of construction is subject to 1002.13. Accordingly, the Bureau is finalizing the Regulation B appendix as proposed, without including the 2016 URLA. developer tools pages. [26] Industry commenters supported the change, with several confirming the potential benefits noted above. Unlike financial institutions covered by Regulation C, creditors subject to 1002.13 but not to Regulation C are required only to collect and retain, but not to report, the required protected applicant-characteristic information. One industry commenter requested clarification that use of the 2016 URLA complies with Regulation B. [18] The Enterprises also made available a Demographic Information Addendum, which is identical in form to section 7 of the 2016 URLA. The regulation covers topics such as: Prohibition on kickbacks and unearned fees Mortgage origination and servicing disclosures Affiliated business arrangements Title insurance Escrow accounts List of homeownership counseling organizations Mortgage loan servicing requirements Force-placed insurance Information required by Regulation C. Regulation C, 12 CFR part 1003, generally requires creditors covered by the Home Mortgage Disclosure Act (HMDA) to collect and report information about the race, ethnicity, and sex of applicants for certain dwelling-secured loans, including some types of loans not covered by 1002.13. The Bureau continues to believe that the benefits of this alternative are very low. Written applications. Sec. 17. To address these issues, the Bureau issued a proposal on March 24, 2017, which was published in the Federal Register on April 4, 2017 (the 2017 ECOA Proposal).[7]. hXmo6+}wR@ N@WMv3Asc~HRHmP0(@J-,9)|PP9hZhkhF4+Ao j1x- sjzIwK[MvS}4=$BUzw3$ On the other hand, consumer advocacy groups and an industry service provider suggested that creditors be required to collect disaggregated ethnicity and race information after a multi-year phase in period. the material on FederalRegister.gov is accurately displayed, consistent with 41. The information must be retained pursuant to the requirements of 1002.12. Your institution is required to establish procedures to ensure that it complies with the requirements of Regulation CC and to provide a copy of these procedures to all employees who perform duties affected by the regulation. Public or judicial notice to the public or judicial notice to the courts obligation by... 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