Two industry commenters proposed two alternative voluntary collection authorizations that would replace proposed 1002.5(a)(4). 1 The consumer advocacy groups further expressed the view that mandatory disaggregated collection would prepare lenders to submit HMDA data in the future should they cross a reporting threshold and that the burden of mandatory disaggregated collection would not be significant because the 2016 URLA makes it easy to record these categories. [6] endstream endobj 2431 0 obj <>/Metadata 156 0 R/Outlines 270 0 R/Pages 2420 0 R/StructTreeRoot 365 0 R/Type/Catalog>> endobj 2432 0 obj <>/Font<>>>/Rotate 0/StructParents 0/Type/Page>> endobj 2433 0 obj <>stream The final rule will provide creditors flexibility in complying with Regulation B in order to facilitate compliance with Regulation C and transition to the 2016 URLA. Section 1002.5 provides rules concerning requests for information. Creditors that fail to comply with Reg B will be held liable for punitive damages up to $10,000 in individual actions. As discussed below, though, a creditor must comply with the record retention requirements of 1002.12 if it chooses to take advantage of the authorization in 1002.5(a)(4). 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 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. The Bureau proposed to amend comment 13(c)-1 to reference two data collection model forms the Bureau proposed to provide in the Regulation B appendix. It outlines the rules that lenders must adhere to when obtaining and processing credit information. The FFIEC call report for banks does not report originations for depository institutions that do not report to HMDA. aJKvqC[+>G5Ci"95,Tk#qCsdtx\/TXCjJ5 &t\A%+gkp# The Bureau is finalizing this comment as proposed. Financial institutions originating fewer than 500 open-end lines of credit in either of the preceding two years will not be required to begin collecting such data until January 1, 2020. Unlike prior versions of the URLA, the 2016 URLA permits an applicant to select disaggregated ethnicity and race categories, as required under revised Regulation C. Given the issuance of the Bureau Approval Notice and the modifications to 1002.13, the Bureau proposed several revisions to the Regulation B appendix as discussed below. 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. 38. Regulation B covers the actions of a creditor before, during, and after a credit transaction. The regulation requires written applications for the types of credit covered by 1002.13. The disclosure to an applicant regarding the monitoring information may be provided in writing. 1691b; Public Law 111-203, 124 Stat. 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). 5. In addition, the Bureau proposed several revisions to 1002.13(b) and (c) and its commentary to align further the collection requirements of Regulation B with revised Regulation C. Section 1002.13(a) sets forth certain protected applicant-characteristic information a creditor must collect for applications on certain dwelling-secured loans. 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. 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 commenter disputed the Bureau's assessment that the potential alternative would impose substantial costs on Regulation B-only creditors. d. Appendix BModel Application Forms is removed. [9] He has 8 years experience in finance, from financial planning and wealth management to corporate finance and FP&A. The incremental benefits of this alternative are also likely to be low because many creditors will collect disaggregated categories under Regulation B in any case, either because they are required to do so under revised Regulation C or as part of the transition to the 2016 URLA. Comments are publicly available at http://www.regulations.gov. 80 FR 66128, 66187-88 (Oct. 28, 2015). Amend 1002.5 by adding paragraph (a)(4) to read as follows: (4) Other permissible collection of information. 3. Authorization for this collection, consistent with the other provisions of 1002.5(a)(4), is not limited to collection using the 2016 URLA. 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). 2. documents in the last year, 861 5. i. documents in the last year, 662 The spouses of rejected married applicants also have the right to this information. Some commenters proposed other changes to Regulation B unrelated to alignment with Regulation C or applicant demographic information collection for mortgage applicants. Is There a Gender Gap in Home Equity Loans? The regulation also requires creditors to notify applicants of action taken on their applications; to report credit history in the names of both spouses on an account; to retain records of credit applications; to collect information about the applicant's race and other personal characteristics in applications for certain dwelling-related loans; Home Mortgage Disclosure (Regulation C), 80 FR 66128 (Oct. 28, 2015). Subpart A--Collection of Checks and Other Items By Federal Reserve Banks. Because the Enterprises have not announced a cutover date for the mandatory use of the 2016 URLA, the Bureau is finalizing January 1, 2022, as the effective date for the removal of the 2004 URLA from the Regulation B appendix. To determine whether the credit union discriminated against members of one or more protected classes in any aspect of its credit operations. This appendix also contains 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)(A) and (ii). As further discussed in the Section 1022(b) analysis below, the Bureau believes that the additional burden would have few benefits. "Federal Fair Lending Regulations and Statutes: Equal Credit Opportunity (Regulation B)," Page 2. An applicant's age can be requested if it appears that they cannot legally sign a contract. By providing flexibility and reducing burden, the Bureau believes this modification will further the purposes of ECOA by facilitating practices that promote the availability of credit to all creditworthy applicants. A place where you can easily find solutions and ask questions Learn more here. 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. Some Regulation B-only creditors sell mortgages to the Enterprises, and would benefit from being able to use the 2016 URLA. ii. 4, 2017). An adverse action is a notice a lender gives when denying a credit application. The commenter noted that differing instructions may lead to uncertainty and that Regulation B-only creditors would benefit from the additional instructions provided in revised Regulation C. No commenters opposed the proposed comment, and so the Bureau is finalizing comment 13(a)-7 as proposed. An industry service provider suggested the Bureau standardize the treatment of co-applicants between 1002.13 and Regulation C. The commenter noted that the two rules imposed different requirements where there are multiple applicants, stating that while 1002.13 requires a financial institution to collect information from any applicant who is a natural person, the revised Regulation C appendix instructs a financial institution to provide applicant demographic information for only the applicant and the first co-applicant listed on the collection form. The other alternative would permit collection of applicant demographic information for any covered loan under Regulation C with no timeframe restriction, even if the creditor was not a financial institution under Regulation C. The Bureau is not adopting these proposed alternatives. They must tell you the name of the creditor (company or person you owe), the amount you owe and how you can dispute the debt or seek verification of the debt. The Bureau received some comments on the topic. If a creditor takes an application through an electronic medium that allows the creditor to see the applicant, the creditor must treat the application as taken in person. Forms for collecting data. [34] The requirements of 1002.13 apply only if an application relates to a dwelling that is or will be occupied by the applicant as the principal residence. The final rule may have benefits to consumers, to the extent that lending entities voluntarily choose to collect disaggregated race and ethnicity information. Federal Register provide legal notice to the public and judicial notice The Equal Credit Opportunity Act (ECOA), 15 U.S.C. 210.4 Sending items to Reserve Banks. 45. Fair Lending Fair Lending Laws and Regulations - PDF provides an abbreviated discussion of federal fair lending laws and regulations based on . The current Regulation B appendix includes the 2004 URLA as a model form. documents in the last year, 474 Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. Register, and does not replace the official print version or the official The notice provides that, although the use of the 2016 URLA by creditors is not required under Regulation B, a creditor that uses the 2016 URLA without any modification that would violate 1002.5(b) through (d) acts in compliance with 1002.5(b) through (d). Answer by David Dickinson: The definition of applicant in Reg B Section 202.2: (e) Applicant means any person who requests or who has received an extension of credit from a creditor, and includes any person who is or may become contractually liable regarding an extension of credit.For purposes of Section 202.7(d), the term includes guarantors, sureties, endorsers, and similar parties. In this Issue, Documents [16] 13. Section IV. The Enterprises have not yet provided a date when lenders may begin using the 2016 URLA or the date lenders are required to use the 2016 URLA (the cutover date), but have stated their intention to collaborate with industry stakeholders to help shape the implementation timeline for the 2016 URLA, with a goal to provide lenders with more precise information in 2017 regarding the cutover date.[20]. A number of commenters recommended alternative approaches to proposed 1002.13(a)(1)(i). Regulation B is intended to prevent applicants from discrimination in any aspect of a credit transaction. These regulations may contain but are not limited to such classifications, differentiations, or other provisions, and may provide for such adjustments and exceptions for any class of transactions, as in the judgment of the Bureau are necessary or proper to effectuate the purposes of ECOA, to prevent circumvention or evasion of ECOA, or to facilitate or substantiate compliance with ECOA. It is still the case that due to the low volume of mortgages by many affected entities and the lack of reporting, disaggregated race and ethnicity data may have limited benefits. B-2. One alternative would permit collection of applicant demographic information for any loan secured by an applicant's dwelling with no timeframe restriction. 5512(b)(1)). Joint guidance on overdraft protection programs. With the introduction of the 2016 URLA the Bureau believes that permitting collection of applicant demographic information in this narrowly tailored circumstance may be beneficial for some financial institutions because it would allow them to use more easily standard forms for collection of applicant demographic information without identifying at the time of collection which applicants are the primary and first co-applicant. If the Bureau were to require creditors to adopt a consistent collection method across applications, the Bureau would also need to issue additional guidance in the official commentary concerning how often and under what circumstances a creditor may change its collection method, among other implementation issues. The Bureau did not receive any comments on the proposed effective date for this provision. Complying with both Regulations B and C would require burdensome and duplicative collection of race and ethnicity data at both the aggregated and disaggregated level. documents in the last year, 940 The President of the United States issues other types of documents, including but not limited to; memoranda, notices, determinations, letters, messages, and orders. Public Law 111-203, 124 Stat. The Public Inspection page Sec. No commenters provided such data. documents in the last year, 20 This repetition of headings to form internal navigation links Public Law 111-203, 124 Stat. 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