does reg b cover collection procedures

The Bureau is not adding the 2016 URLA as a model form in place of the 2004 version. As discussed below in the section-by-section analysis for 1002.13, the Bureau is amending 1002.13(b) to permit, but not require, creditors to collect the information set forth in 1002.13(a) from a second or additional co-applicant. The date Start Printed Page 45690for removal of the 2004 URLA from the Regulation B appendix is discussed further in the Effective Date section below. on 44. As noted above, the Bureau believes that consumers could suffer substantial harm if the requirement were removed. Both ECOA and title X of the Dodd-Frank Act are consumer financial laws. Moreover, because both methods use the same aggregate categories, a creditor can compare information collected under either method by rolling up the disaggregated subcategories into their corresponding aggregate categories. Show This PDF is The authority citation for part 1002 continues to read as follows: Authority: Does Reg B require receipt of all required conditions before a credit approval can be made? In July 2014, the Bureau proposed amendments to Regulation C to implement the Dodd-Frank Act changes to require collection, recording, and reporting of additional information to further HMDA's purposes, and to modernize the manner in which covered institutions report HMDA data. A person can have only one principal residence at a time. The consumer debt collection larger participant rule, which appears in 12 CFR Part 1090, was effective January 2, 2013 . fbS`}R7E_ |.rgxp,gh bWFdd~N2 ]_r'xj`-]JRZPT/]kM;U::. The Bureau acknowledges that the collection and retention requirement of Regulation B imposes some burden on financial institutions. The President of the United States communicates information on holidays, commemorations, special observances, trade, and policy through Proclamations. The federal Fair Credit Reporting Act covers how debt collection is reported in credit reports. 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). When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. As part of the Bureau's outreach to financial institutions, vendors, and other mortgage industry participants to prepare for the implementation of the 2015 HMDA Final Rule, the Bureau received questions about the requirement to permit applicants to self-identify using disaggregated ethnicity and race categories. On September 23, 2016, the Bureau issued a notice concerning the collection of expanded information about ethnicity and race in 2017 (Bureau Approval Notice). This appendix contains five model credit application forms, each designated for use in a particular type of consumer credit transaction as indicated by the bracketed caption on each form. @*EtJ '_whyb.v'Yc:E| t%]C@bkBZSAqqu`2B6G\#; documents in the last year, 37 The Bureau is now publishing final amendments to Regulation B. This information is not part of the official Federal Register document. regulation prescribes rules for taking, evaluating, and acting on applications aswell rules for furnishing and maintaining credit information. The Bureau also received questions as to how that requirement intersected with compliance obligations under Regulation B. With respect to the open-end line of credit threshold for HMDA reporting, the Bureau adopted amendments to Regulation C that temporarily increases the open-end line of credit threshold to 500 until January 1, 2020. An industry service provider also supported a uniform standard based on the requirements in revised Regulation C in order to reduce the costs of supporting dual collection methods. This alternative would reduce burden to firms that do not report under HMDA. Register documents. These changes will primarily benefit institutions that may be near the loan volume reporting threshold, such that they may be required to report under HMDA and Regulation C in some years and not others, or may be uncertain about their reporting status. The Bureau also proposed comment 5(a)(4)-1 to provide guidance on proposed 1002.5(a)(4) and to highlight the voluntary nature of the rule. documents in the last year, 662 Use the PDF linked in the document sidebar for the official electronic format. The Bureau believes that most creditors will voluntarily adopt a consistent collection method because uniform practices are generally easier and less costly for creditors to implement. [40] Effective January 1, 2018, amend Appendix B to Part 1002 by revising paragraph 1 and adding a Data Collection Model Form to the end of the Appendix to read as follows: 1. Examination Procedures 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. 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]. 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. Subpart A--Collection of Checks and Other Items By Federal Reserve Banks. 1691 et seq. A large number of industry commenters supported proposed 1002.5(a)(4) and the five-year timeframe for 1002.5(a)(4)(i), (ii), and (iii). 5. Instead, the Bureau is providing for two alternative data collection model forms for the purpose of collecting ethnicity and race information. %PDF-1.6 % 36. Two commenters supported the proposal regarding record retention, noting that it would facilitate Start Printed Page 45686monitoring of fair lending laws and serve ECOA's purposes and that it seemed appropriate given the proposed amendments to 1002.5(a)(4). Z Section 1002.13(b) through (c) provides instructions on the manner of collection. Document Drafting Handbook 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. documents in the last year, 822 Prior to Reg B, discriminatory lending practices such as redlining for mortgages was prevalent in the U.S. Regulation B makes such practices illegal. In practice, the final rule simply makes clear that the existing collection required under revised Regulation C is sufficient for compliance with Regulation B. Information regarding ethnicity, race, and sex that is not required to be collected pursuant to Regulation C, 12 CFR part 1003, may nevertheless be collected under the circumstances set forth in 1002.5(a)(4) without violating 1002.5(b). Authorization for this collection, consistent with the other provisions of 1002.5(a)(4), is not limited to collection using the 2016 URLA. In addition to the amendment to Regulation B in the proposal, the Bureau Start Printed Page 45692considered two alternatives to address the differing race and ethnicity requirements of Regulation B and revised Regulation C. The Bureau considered requiring all creditors subject to the collection and retention requirement of Regulation B to permit applicants to self-identify using disaggregated race and ethnicity categories. Public Law 111-203, 124 Stat. Commenters also requested that the Bureau increase the thresholds for being a HMDA reporter to a higher limit that would exempt more creditors from HMDA. Thus, even if the Bureau were reconsidering its approach to visual observation or surname collection, which it is not, the Bureau does not believe the evidence submitted by the commenters demonstrate that collection based on visual observation or surname do not serve the purposes of ECOA. A creditor that accepts an application by telephone or mail must request the monitoring information. [41] on NARA's archives.gov. Joint guidance on overdraft protection programs. Therefore, the Bureau believes any operational costs from adopting the 2016 URLA are part of the normal course of business and are not a cost of the final rule. 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). 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. "CFPB Consumer Laws and Regulations ECOA.". 45. 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. 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. In this Issue, Documents Learn more here. 1. Applications through loan-shopping services. Unlike the costs associated with the adoption of the 2016 URLA, these costs would not otherwise be incurred in the normal course of business. [30] headings within the legal text of Federal Register documents. [17] The Bureau did not receive any comments on the analysis or data. collection, as the CFPB defines by rule, and their service providers . In light of these inquiries, the Bureau determined that it would be beneficial to establish through rulemaking appropriate standards in Regulation B concerning the collection of an applicant's ethnicity and race information similar to those in revised Regulation C. Because many of the financial institutions most affected by this proposed rule are supervised by the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board (Board), and the National Credit Union Administration (NCUA), the Bureau conducted outreach to these agencies. Regulation J. The commenter asserted the resulting data are never used by regulators, while the collection and retention imposes a substantial burden. Section 1002.13 sets forth the scope, required information, and manner for the mandatory collection of certain protected applicant-characteristic information under Regulation B. An application for temporary financing to construct a dwelling is not subject to 1002.13. Federal Reserve. Ax$({MeQR.5V>+FrJLv_Y-+1aeJ|omxoVEEw]=QM*?^y[IrOz$;l:&=EMXz${xpIg 5. legal research should verify their results against an official edition of 210.3 General provisions.*. The Enterprises, currently under the conservatorship of the Federal Housing Finance Agency (FHFA), prepare and periodically revise the URLA used by many lenders for certain dwelling-related loans. Overdraft payment programs and consumer protection. Sec. The Equal Credit Opportunity Act (ECOA) is a federal civil rights law that forbids lenders to deny credit to an applicant based on any factor unrelated to the person's ability to repay. i. 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/. It creates consumer protections and rights and imposes responsibilities on banks as users of consumer reports and entities furnishing information to the consumer reporting agencies. [14] Indeed, given that Regulation C requires collection of certain applicant demographic information on the basis of visual observation or surname, adopting either proposal would undermine the purpose of this rulemaking by imposing different requirements in Regulation B and Regulation C.[37] You can find out more about our use, change your default settings, and withdraw your consent at any time with effect for the future by visiting Cookies Settings, which can also be found in the footer of the site. The Bureau is therefore not requiring the collection of disaggregated categories for Regulation B-only creditors. The changes to Regulation B in this rule are summarized briefly in this section and discussed in detail below. The OFR/GPO partnership is committed to presenting accurate and reliable The Bureau solicited comment on permitting the collection of applicant demographic information in the circumstances described in proposed 1002.5(a)(4), and, in particular, regarding the proposed five-year time frame, and whether there are other specific, narrowly tailored circumstances not described in 1002.5(a)(2) or proposed 1002.5(a)(4) under which a creditor would benefit from being able to collect applicant demographic information for mortgage loan applicants. Commenters expressed concern that the data points added to Regulation C in the 2015 HMDA Final Rule burdened financial institutions and, because of this burden, the commenters encouraged the Bureau to reduce the HMDA data fields to only statutorily required fields. 1503 & 1507. [16] A credit union trade association explicitly opposed the alternative, asserting that its members would be unduly burdened by mandatory collection of disaggregated race and ethnicity information. All methods of compliance under current law will remain available to covered persons, including small entities, when these provisions become effective. Predatory Lending Laws: What You Need to Know, Discrimination in Insurance Underwriting Guidelines. 1691b; Public Law 111-203, 124 Stat. You can learn more about the standards we follow in producing accurate, unbiased content in our. A creditor that accepts an application by mail need not make a special request for the monitoring information if the applicant has failed to provide it on the application form returned to the creditor. 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. on [202.9(a)(3)(i)(B)] We designed the application to include those disclosures. In the 2017 ECOA Proposal, the Bureau set forth a preliminary analysis of these effects, and the Bureau requested comment and submissions of additional data that could inform the Bureau's analysis of the benefits, costs, and impacts of the proposal. We also reference original research from other reputable publishers where appropriate. 3 the material on FederalRegister.gov is accurately displayed, consistent with The FFIEC call report for banks does not report originations for depository institutions that do not report to HMDA. (12 USC 5514(a)(1)(B)). More information and documentation can be found in our 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. [44] 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. Even for institutions with very small volumes of originations that may not be subject to HMDA reporting because they do not meet an applicable loan volume threshold, the retained information may be useful for comparative file reviews. Questions as to how that requirement intersected with compliance obligations under Regulation B 1002.13 B. With compliance obligations under Regulation B request the monitoring information of collecting ethnicity and race information under HMDA more the! 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