%%EOF Even accepting the commenter's premise, however, the Bureau notes again that it believes the additional benefits of this alternative to be quite limited because, among other reasons, many Regulation B-only creditors are likely to eventually collect disaggregated race and ethnicity data through adoption of the 2016 URLA. On October 24, 2012, the CFPB issued a larger participant regulation in the market of consumer debt collection. 03/01/2023, 43 Cookies collect information about your preferences and your devices and are used to make the site work as you expect it to, to understand how you interact with the site, and to show advertisements that are targeted to your interests. 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). 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. Accordingly, the Bureau is finalizing the Regulation B appendix as proposed, without including the 2016 URLA. The proposed model form substantially mirrors section X in the 2004 URLA and the data collection model form contained in the current Regulation C appendix. Comments related to the data collection model forms and the 2016 URLA are addressed in the section-by-section analysis of the Regulation B appendix. (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). Revision of the Standards for the Classification of Federal Data on Race and Ethnicity, 62 FR 58782, 5878-90 (Oct. 30, 1997). 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 3501 et seq. These can be useful Creditors subject to the Home Mortgage Disclosure Act should be aware, however, that data collection may be called for under Regulation C (12 CFR part 1003), which generally requires creditors to report, among other things, the sex and race of an applicant on brokered applications or applications received through a correspondent. One commenter stated that extending the requirement to collect applicant demographic information on the basis of visual observation or surname to Regulation B-only creditors is outside the scope of ECOA. documents in the last year, 87 At the same time, mandatory use of disaggregated collection of race and ethnicity categories would impose greater costs on creditors than the Bureau's proposal, particularly on smaller entities. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School for Social Research and Doctor of Philosophy in English literature from NYU. One industry commenter proposed permitting collection for dwelling-secured loans made primarily for a business or commercial purpose that might be covered loans, regardless of whether or not they are for the purpose of home purchase, refinancing, or home improvement and therefore reportable under revised Regulation C. Under revised Regulation C, dwelling-secured loans made primarily for a business or commercial purpose are only required to be reported if they meet the definition of a home purchase, refinancing, or home improvement loan. of the issuing agency. Proposed 1002.5(a)(4)(iv) would permit a creditor that exceeds a revised Regulation C loan-volume threshold in the first year of a two-year threshold period to collect, in the second year, applicant demographic information for a loan that would otherwise be a covered loan under Regulation C. For the reasons provided below, the Bureau is adopting 1002.5(a)(4)(i) through (iv) as proposed. Specifically, covered institutions must permit applicants to self-identify their ethnicity and race using certain disaggregated ethnic and racial subcategories such as Mexican, Puerto Rican, or Cuban under the aggregate category Hispanic or Latino. by the Housing and Urban Development Department Industry commenters noted this potential conflict and expressed their support for the proposal. a. 2017-20417 Filed 9-29-17; 8:45 am], updated on 11:15 AM on Wednesday, March 1, 2023, updated on 8:45 AM on Wednesday, March 1, 2023. 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. A creditor may devise its Start Printed Page 45697own disclosure so long as it is substantially similar. Federal Register. Chip Stapleton is a Series 7 and Series 66 license holder, CFA Level 1 exam holder, and currently holds a Life, Accident, and Health License in Indiana. ), Federal agencies are generally required to seek the Office of Management and Budget (OMB)'s approval for information collection requirements prior to implementation. In addition, the Bureau is adopting new 1002.5(a)(4)(v) and (vi) in response to comments, as discussed below. that agencies use to create their documents. corresponding official PDF file on govinfo.gov. While final 1002.5(a)(4) provides a narrow exception to the general limitations in 1002.5(b) through (d), these alternative proposals would create a much broader exception to the general limitations on collecting such information in Regulation B. Fannie Mae, Uniform Residential Loan Application, https://www.fanniemae.com/singlefamily/uniform-residential-loan-application# (last visited Sept. 6, 2017). Two industry commenters, while supportive of the flexibility provided in the 2017 ECOA Proposal, sought clarification on how aggregate and disaggregated data will be evaluated against one another, including how aggregate information collected under Regulation B would be compared to disaggregated information collected under revised Regulation C. The commenters expressed concern that the optionality could result in dissimilar demographic reporting and potentially greater compliance burden for creditors who choose to continue to collect aggregate information. [6] Although some entities subject to Regulation B but not Regulation C may choose to voluntarily Start Printed Page 45694begin collecting disaggregated race and ethnicity information, the Bureau believes the most likely reason for this to occur is through adoption of the 2016 URLA, which is not part of the final rule. The Bureau may reevaluate the need for mandatory disaggregated collection under 1002.13 after implementation of the 2015 HMDA Final Rule and transition to the 2016 URLA, when more information is available on creditor collection practices. [42] [25] 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). Securities credit refers to extensions of credit subject to regulation under section 7 of the Securities Exchange Act of 1934 or extensions of credit by a broker or dealer subject to regulation as a broker or dealer under the Securities Exchange Act of 1934. A number of commenters recommended alternative approaches to proposed 1002.13(a)(1)(i). In the Bureau Approval Notice, the Bureau determined that, while a creditor is not required to use the 2016 URLA, a creditor that uses the form without any modification that would violate 1002.5(b) through (d) would act in compliance with 1002.5(b) through (d). 3. Definition, Legality, and Effects, Federal Fair Lending Regulations and Statutes: Equal Credit Opportunity (Regulation B). Thus, a small entity that is in compliance with current law need not take any additional action, save those already required by the 2015 HMDA Final Rule. Id. The Bureau is adopting 1002.5(a)(4)(vi) to address the commenter's suggestion by clarifying that the collection of applicant demographic information for additional borrowers is permitted. Learn more here. The Bureau requested comments on both the costs and benefits associated with this alternative approach. The Bureau specifically sought input from these agencies concerning their use of applicant ethnicity and race information collected under 1002.13 but not reported or anticipated to be reported under Regulation C and their views on appropriate standards for collection and retention of this information. 1. 2. the official SGML-based PDF version on govinfo.gov, those relying on it for 80 FR 66128, 80 FR 66140, and 66144 (Oct. 28, 2015). Current 1002.13(a)(1) requires that creditors collect information regarding the applicant's ethnicity and race using two aggregate ethnicity categories (Hispanic or Latino and Not Hispanic or Latino) and five aggregate race categories (American Indian or Alaska Native, Asian, Black or African American, Native Hawaiian or Other Pacific Islander, and White). Similarly, an industry commenter stated that the collection methods used in Regulation B and Regulation C should match. 03/01/2023, 828 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. Copies of the original record include carbon copies, photocopies, microfilm or microfiche copies, or copies produced by any other accurate retrieval system, such as documents stored and reproduced by computer. For applications subject to 1002.13(a)(1), a creditor may choose on an application-by-application basis whether to collect aggregate information pursuant to 1002.13(a)(1)(i)(A) or disaggregated information pursuant to 1002.13(a)(1)(i)(B) about the ethnicity and race of the applicant. 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. Instead, the Bureau is providing for two alternative data collection model forms for the purpose of collecting ethnicity and race information. In the 2017 ECOA Proposal, the Bureau also considered but did not propose the alternative of including the 2016 URLA as a model form in the Regulation B appendix. These included, for example, a comment supporting the collection of loan officers' demographic information, a request to collect information on whether the applicant is divorced, a request for guidance on when previously gathered applicant demographic information can be used for new applications, and a request that the Bureau provide a safe harbor for information collected in 2017. This potential conflict and expressed their support for the proposal the 2016 URLA addressed... 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