82 FR 43088, 43100-43102 (Sept. 13, 2017); see also id. 1375, 1980 (2010) (codified at 12 U.S.C. ii. 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. What Is the Equal Credit Opportunity Act (ECOA)? 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 concluded that the proposal, if adopted, would not have a significant economic impact on any small entities and that an IRFA was therefore not required. 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. Effective January 1, 2022, amend Appendix B to Part 1002 by revising paragraph 1 and under paragraph 3 removing the form Uniform Residential Loan Application. 1375, 2035-39 (2010) (codified at 12 U.S.C. The Regulation B creditors affected by this rule are primarily those creditors making mortgage loans subject to 1002.13, which applies to purchase and refinance transactions involving an applicant's primary residence. @*EtJ '_whyb.v'Yc:E| t%]C@bkBZSAqqu`2B6G\#; The Bureau proposed as an effective date for the removal of the 2004 URLA from Regulation B appendix either the cutover date designated by the Enterprises for the mandatory use of the 2016 URLA or January 1, 2022. Accordingly, the Bureau is not making disaggregated race and ethnicity categories mandatory for compliance with Regulation B at this time. The commenter noted that the Bureau Approval Notice applied to all applications taken in 2017 and suggested that the proposed effective date for this rule sends a mixed message. on Sec. One industry commenter also noted that the 2016 URLA includes a form for the collection of applicant demographic information for additional borrowers and does not necessarily limit the collection to the applicant and the first co-applicant, even though Regulation C requires financial institutions to provide the ethnicity, race and sex information only for the applicant and first co-applicant. The Bureau is therefore not requiring the collection of disaggregated categories for Regulation B-only creditors. 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. 3. Reg. One industry commenter requested clarification that use of the 2016 URLA complies with Regulation B. 03/01/2023, 43 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. To the extent that the provision benefits firms and consumers, consumers in rural areas will see the largest benefits. FDIC Consumer Compliance Examination Manual provides information and examination procedures to assist institutions with understanding and complying with fair lending-related requirements. 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. An industry service provider asked the Bureau to provide guidance regarding whether the term natural person as used in Regulation B and Regulation C includes living trusts or sole proprietorships. A creditor may only request information from a loan applicants spouse if: The most important benefit of Regulation B is that it helps to prevent discrimination against women and minorities. Section 1002.13(b) through (c) provides instructions on the manner of collection. Sc~|~??lW@l The Fair Debt Collection Practices Act (FDCPA) is a federal law that provides limitations on what debt collectors can do when collecting certain types of debt. c. Under Section 1002.13Information for monitoring purposes: i. Paragraph 13(a)Information to be requested is revised. 23. 5. P}j]+VuuYZcU? Counts are subject to sampling, reprocessing and revision (up or down) throughout the day. 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. 1376, 2083-84 (2010). Accordingly, 1002.5(a)(4)(vi) permits a creditor that is collecting information regarding the ethnicity, race, and sex of an applicant or first co-applicant to collect information regarding the ethnicity, race, and sex of a second or additional co-applicant for a covered loan under Regulation C 1003.2(e), or for a loan described in paragraphs (a)(4)(i) through (v). 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. Proposed 1002.5(a)(4) provides authorization to collect applicant demographic information, but does not require collection in the circumstances described. 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. [41] However, 1002.5(a)(2) does not authorize collection of information beyond what is required by law. regulation prescribes rules for taking, evaluating, and acting on applications aswell rules for furnishing and maintaining credit information. The Bureau did not propose changes to Regulation C in this rulemaking. 2. "Federal Fair Lending Regulations and Statutes: Equal Credit Opportunity (Regulation B)," Page 3. Appendix B to this part provides for two alternative data collection model forms for use in complying with the requirements of 1002.13(a)(1)(i) and (ii) to collect information concerning an applicant's ethnicity, race, and sex. 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. Regulations B and C both contain an appendix B that provides model forms for use when collecting applicant demographic information required under the regulations. 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). 82 FR 43088, 43093-43096 (Sept. 13, 2017); see also id. 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. However, the Bureau believes it may impose costs on consumers. Amend 1002.13 by revising paragraph (a)(1)(i) and paragraph (b) to read as follows: (A) For ethnicity, the aggregate categories Hispanic or Latino and not Hispanic or Latino; and, for race, the aggregate categories American Indian or Alaska Native, Asian, Black or African American, Native Hawaiian or Other Pacific Islander, and White; or. A creditor that uses a computerized or mechanized system Start Printed Page 45696need not keep a paper copy of a document (for example, of an adverse action notice) if it can regenerate all pertinent information in a timely manner for examination or other purposes. Many of these commenters stated that the proposal would simplify the collection process and reduce regulatory burden by ensuring that creditors are not subject to differing collection requirements under Regulation B and Regulation C. Commenters also expressed the view that the proposal would ease compliance burden because it would provide creditors the flexibility to use the method most suitable for them. 2. 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. Under Regulation B, a creditor may request any information. documents in the last year, 861 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. Under the PRA, the Bureau may not conduct or sponsor and, notwithstanding any other provision of law, a person is not required to respond to an information collection unless the information collection displays a valid control number assigned by OMB. 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. Credit denial is the rejection of a credit application by a prospective lender, usually due to its assessment that the applicant is not creditworthy. The Enterprises also made available a Demographic Information Addendum, which is identical in form to section 7 of the 2016 URLA. The Bureau received no comments opposing and one comment supporting the proposed amendments and so is finalizing the Regulation B appendix to provide alternative model forms as proposed. Industry commenters supported the change, with several confirming the potential benefits noted above. 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). documents in the last year, 983 the official SGML-based PDF version on govinfo.gov, those relying on it for A version of the URLA dated January 2004 (2004 URLA) is included in the Regulation B appendix as a model form for use in complying with 1002.13. Z8m'POn0k6j'T]]>o:gzwzBOLLX6XaXDfB{cQftl9GTFS7_^W/nX6[ For the reasons set forth above, the Bureau amends Regulation B, 12 CFR part 1002, as set forth below: 1. headings within the legal text of Federal Register documents. The commenter suggested that the Bureau revise 1002.5(b) to permit collection of demographic information for any additional co-applicants using the 2016 URLA.