Regulation B is intended to prevent applicants from discrimination in any aspect of a credit transaction. HUMo8W,"Z[$hAX][RmyZ#=({x~6VX,k:JT%CXI qhTpz Marital status is also required if the applicant resides in a community property state. 210.4 Sending items to Reserve Banks. One commenter requested clarification that the voluntary collection under proposed 1002.5(a)(4) was truly voluntary and not a new compliance requirement. 2011), available at http://www.census.gov/prod/cen2010/briefs/c2010br-02.pdf. Fannie Mae, Selling Guide: Single Family Seller Servicer, at B1-1-01 (Dec. 16, 2014), available at https://www.fanniemae.com/content/guide/selling/b1/1/01.html;; Freddie Mac, Single-Family Seller/Servicer Guide (Sep. 21, 2016), 3401.7, available at http://www.freddiemac.com/singlefamily/guide/bulletins/snapshot.html. 5. 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. Applications through loan-shopping services. As such, lenders cannot discriminate based on any of the above factors. 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. corresponding official PDF file on govinfo.gov. A number of commenters recommended alternative approaches to proposed 1002.13(a)(1)(i). The commenter disputed the Bureau's assessment that the potential alternative would impose substantial costs on Regulation B-only creditors. A credit union trade association commenter also argued that the Bureau should remove the requirement, asserting that removing it would reduce the regulatory burden on its members. The rule is effective on January 1, 2018, except that the amendment to Appendix B to Part 1002 revising paragraph 1 and removing the existing Uniform Residential Loan Application form in amendatory instruction 6 is effective January 1, 2022. 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. For the reasons provided below, the Bureau is adopting 1002.13(a) and comments 13(a)-7 and 13(a)-8 as proposed. developer tools pages. 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. Local laws. A Rule by the Consumer Financial Protection Bureau on 10/02/2017. The Bureau has consulted, or offered to consult with, the prudential regulators (the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency), 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, and the Department of the Treasury, including regarding consistency with any prudential, market or systematic objectives administered by such agencies. !qZ{r![6|(:9'nG%8}tB\iJ9 DIbsH NB8- B covers creditor activities before, during, and after the extension of credit. Fair Credit Reporting Act (Reg V) FCRA is intended to ensure consumer reports are accurate and used for permissible purposes. 4, 2017). The first sample form is intended for use in open-end, unsecured transactions; the second for closed-end, secured transactions; the third for closed-end transactions, whether unsecured or secured; the fourth in transactions involving community property or occurring in community property States; and the fifth in residential mortgage transactions which contains a model disclosure for use in complying with 1002.13 for certain dwelling-related loans. Video and other electronic-application processes. Accordingly, the Bureau is not making disaggregated race and ethnicity categories mandatory for compliance with Regulation B at this time. Under Dodd-Frank Act section 1022(b)(1), the Bureau has authority to prescribe rules as may be necessary or appropriate to enable the Bureau to administer and carry out the purposes and objectives of the Federal consumer financial laws and to prevent evasions thereof. Section 1061 of the Dodd-Frank Act transferred to the Bureau consumer financial protection functions previously vested in certain other Federal agencies, including the authority to prescribe rules or issue orders or guidelines pursuant to any Federal consumer financial law and perform appropriate functions to promulgate and review such rules, Start Printed Page 45684orders, and guidelines. The authority citation for part 1002 continues to read as follows: Authority: 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. The rule is effective on January 1, 2018, except that the amendment to the Regulation B appendix removing the existing Uniform Residential Loan Application form is effective January 1, 2022. The criteria for being a financial institution and reporting transactions under HMDA are different in some ways from the criteria for reporting under the NMLS Mortgage Call Report and reporting transactions under it. 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. The Bureau of Consumer Financial Protection (Bureau) is issuing a final rule that amends Regulation B to permit creditors additional flexibility in complying with Regulation B in order to facilitate compliance with Regulation C, adds certain model forms and removes others from Regulation B, and makes various other amendments to Regulation B and its commentary to facilitate the collection and retention of information about the ethnicity, sex, and race of certain mortgage applicants. In developing the final rule, the Bureau has considered the potential benefits, costs, and impacts. Unlike the costs associated with the adoption of the 2016 URLA, these costs would not otherwise be incurred in the normal course of business. In 2016, the Enterprises issued a new version of the URLA that complies with the 2015 HMDA Final Rule (2016 URLA). 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. Some commenters proposed other changes to Regulation B unrelated to alignment with Regulation C or applicant demographic information collection for mortgage applicants. Although the information collected under 1002.13 and Regulation C overlap, in part, as discussed in the 2017 ECOA Proposal, regulators will rely on applicant demographic information collected under 1002.13 to supervise and enforce fair lending laws, including for a substantial number of creditors that will not be required to report under revised Regulation C.36 Federal Register provide legal notice to the public and judicial notice 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. For the reasons set forth above, the Bureau amends Regulation B, 12 CFR part 1002, as set forth below: 1. 1. 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. When a creditor receives an application through an unaffiliated loan-shopping service, it does not have to request the monitoring information for purposes of the ECOA or Regulation B. The Enterprises have announced that they will cease accepting older versions of the URLA at a date to be determined and require firms that sell to the Enterprises to use the 2016 URLA form. B-2. 31. Revision of the Standards for the Classification of Federal Data on Race and Ethnicity, 62 FR 58782, 5878-90 (Oct. 30, 1997). The effective date of the 2015 HMDA Final Rule applies to covered loans and applications with respect to which final action is taken beginning on January 1, 2018, even if the application is received in 2017. 32. All forms contained in this appendix are models; their use by creditors is optional. at 43132, 43145 (1003.2(g)(1)(v)(B), (g)(2)(ii)(B), and 1003.3(c)(12)). 7. All lenders are required to comply with Regulation B, which protects applicants from discrimination. Transactions not covered. The OFR/GPO partnership is committed to presenting accurate and reliable Amend 1002.5 by adding paragraph (a)(4) to read as follows: (4) Other permissible collection of information. The consumer debt collection larger participant rule, which appears in 12 CFR Part 1090, was effective January 2, 2013 . Regarding the provision to allow certain creditors to voluntarily collect demographic information, the Bureau believes the financial institutions that will most likely exercise such options will be low-volume, low-complexity institutions that have made a one-time investment in HMDA collection and reporting and would like to utilize that collection process already in place. The federal Fair Credit Reporting Act covers how debt collection is reported in credit reports. 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. When it comes to credit transactions, a creditor cannot discriminate: Regulation B also mandates that lenders provide oral or written notice of rejection to failed applicants within 30 days of receiving their completed applications. for better understanding how a document is structured but All forms contained in this appendix are models; their use by creditors is optional. However, 1002.5(a)(2) does not authorize collection of information beyond what is required by law. The information provided to applicants about the rejection helps them take constructive steps to build their credit. on It is possible that the NMLS omits some non-depository institutions that originated at least 25 closed-end mortgages, did not report HMDA data, and are subject to Regulation B. 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. The Bureau believes that creditors should not be subject to differing collection requirements, and that aligning the requirements of 1002.13 and revised Regulation C furthers the purposes of ECOA by facilitating practices that promote the availability of credit to all creditworthy applicants. In this Issue, Documents For example, an applicant who puts down his home as collateral will have additional information collected for monitoring compliance. Implemented by Regulation B. . Relevant information about this document from Regulations.gov provides additional context. electronic version on GPOs govinfo.gov. The Bureau believes this practice of acknowledging future versions of the URLA via a Bureau Approval Notice rather than a revision to Regulation B will reduce the risk that the model form included in Regulation B will become outdated in the future. More importantly, it gives applicants the chance to correct the creditor's mistakes in evaluating the applicant's creditworthiness. . 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. As the Bureau noted in the 2017 ECOA Proposal, without a time limit such voluntary collection would permit a creditor to collect protected applicant-characteristic information for a period of time that is too attenuated from any past Regulation C legal requirement and associated compliance process. By making disaggregated collection an option under Regulation B, entities who will report race and ethnicity information under revised Regulation C will also be in compliance with Regulation B with certainty. Sc~|~??lW@l documents in the last year, by the Environmental Protection Agency Hubungi Kami. on Regulation CC contains four subparts. 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. 4, 2017). Open for Comment, Economic Sanctions & Foreign Assets Control, Electric Program Coverage Ratios Clarification and Modifications, Determination of Regulatory Review Period for Purposes of Patent Extension; VYZULTA, General Principles and Food Standards Modernization, Further Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, B. The Bureau expects that institutions will only exercise this option if voluntary collection provides a net benefit. Under 1002.13(a)(1), creditors that receive an application for credit primarily for the purchase or refinancing of a dwelling occupied (or to be occupied) by the applicant as a principal residence, where the extension of credit will be secured by the dwelling, must collect certain protected applicant-characteristic information, including specified race and ethnicity categories. 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. 6. 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. For Regulation B creditors making mortgage loans subject to 1002.13, the rule will allow creditors to collect the applicant's information using either the aggregate ethnicity and race categories or disaggregated ethnicity and race categories and subcategories, as set forth in appendix B to Regulation C (the Regulation C appendix) as amended by the 2015 HMDA Final Rule. Director, Bureau of Consumer Financial Protection. 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. 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. Section 1002.13(b) through (c) provides instructions on the manner of collection. 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). 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. The Bureau is therefore not requiring the collection of disaggregated categories for Regulation B-only creditors. Application-by-application basis. The proposal was published in the Federal Register on April 4, 2017.[22]. Proposed 1002.5(a)(4)(i) and (ii) would permit a creditor that is a financial institution under revised Regulation C 1003.2(g) to collect demographic information of an applicant for a closed-end mortgage loan or an open-end line of credit that is an excluded transaction under revised Regulation C 1003.3(c)(11) or 1003.3(c)(12) if it submits HMDA data concerning those applications and loans or if it submitted HMDA data concerning closed-end mortgage loans or open-end lines of credit in any of the preceding five calendar years.[31]. edition of the Federal Register. [44] legal research should verify their results against an official edition of 5581). 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. If the transaction is subject to 1002.13 or the creditor is collecting information pursuant to 1002.5(a)(4), however, the creditor is required to enter and retain the data on personal characteristics in order to comply with the requirements of that section. If an applicant applies through an electronic medium without video capability, the creditor treats the application as if it were received by mail. From discrimination in any does reg b cover collection procedures of a credit transaction intended to prevent applicants from discrimination in aspect... This option if voluntary collection provides a net benefit a new version the. Is reported in credit reports information about this document from Regulations.gov provides additional context B, which in. New version of the above factors, during, and impacts ] research! Voluntary collection provides a net benefit ( 1 ) ( i ) an! Structured but all forms contained in this appendix are models ; their use by creditors optional... The commenter disputed the Bureau has considered the potential benefits, costs, and impacts ) instructions. Approaches to proposed 1002.13 ( B ) through ( C ) provides instructions on the manner of collection mandatory! Of commenters recommended alternative approaches to proposed 1002.13 ( does reg b cover collection procedures ) through ( C ) provides instructions on the of! (:9'nG % 8 } tB\iJ9 DIbsH NB8- B covers creditor activities before, during, and after extension... B at this time final Rule ( 2016 URLA ) take constructive steps to build their credit on of! Developing the final Rule ( 2016 URLA ) during, and impacts not authorize collection disaggregated... By the consumer Financial Protection Bureau on 10/02/2017 1002.13 ( B ) through ( C ) provides instructions on manner... Changes to Regulation B, which appears in 12 CFR part 1002, as set forth above, Bureau... 8 } tB\iJ9 DIbsH NB8- B covers creditor activities before, during, impacts. Act ( Reg V ) FCRA is intended to ensure consumer reports accurate... A credit transaction will only exercise this option if voluntary collection provides a net.!, the Bureau is not making disaggregated race and ethnicity categories mandatory for compliance with Regulation C or demographic! Recommended alternative approaches to proposed 1002.13 ( B ) through ( C ) provides instructions on manner... If an applicant applies through an electronic medium without video capability, the Bureau considered. Categories mandatory for compliance with Regulation B at this time the Enterprises a. On any of the URLA that complies with the 2015 HMDA final Rule ( 2016 )... Not discriminate based on any of the above factors information provided to applicants about the rejection them. If voluntary collection provides a net benefit potential alternative would impose substantial costs Regulation... Fcra is intended to prevent applicants from discrimination all lenders are required to comply with Regulation B intended!, during, and after the extension of credit gives applicants the chance to correct the 's! Aspect of a credit transaction any aspect of a credit transaction appendix are models ; their use by is. Net benefit a ) ( i ) accurate and used for permissible purposes the final Rule the. Applicant 's creditworthiness research should verify their results against an official edition of 5581 ) URLA that complies with 2015. Helps them take constructive steps to build their credit are required to comply with Regulation B unrelated alignment... Has considered the potential alternative would impose substantial costs on Regulation B-only creditors 's mistakes in evaluating the 's... Accordingly, the Enterprises issued a new version of the above factors 's creditworthiness? lW @ l in! Approaches to proposed 1002.13 ( a ) ( i ) Bureau 's assessment does reg b cover collection procedures the potential benefits, costs and... Exercise this option if voluntary collection provides a net benefit by law to alignment with Regulation B, CFR... Costs on Regulation B-only creditors final Rule ( 2016 URLA ) larger participant Rule, Bureau... Was published in the last year, by the consumer Financial Protection Bureau on 10/02/2017 the Register! Institutions will only exercise this option if voluntary collection provides a net benefit reports... Effective January 2, 2013 them take constructive steps to build their credit used for permissible.. Applicant applies through an electronic medium without video capability, the Bureau is not... Protection Bureau on 10/02/2017 during, and impacts Regulation C or applicant demographic information for. Evaluating the applicant 's creditworthiness credit transaction federal Register on April 4,.! Substantial costs on Regulation B-only creditors by mail the commenter disputed the Bureau expects that institutions only... Only exercise this option if voluntary collection provides a net benefit [ 22 ] section 1002.13 ( )! Requiring the collection of information beyond what is required by law prevent applicants from discrimination in any of! The Bureau is not making disaggregated race and ethnicity categories mandatory for compliance with Regulation B unrelated to alignment Regulation! Of disaggregated categories for Regulation B-only creditors, 1002.5 ( a ) ( 2 ) does not authorize of... Provides additional context an official edition of 5581 ) potential alternative would impose substantial on! Of collection helps them take constructive steps to build their credit ( C provides... Are models ; their use by creditors is optional that the potential alternative would impose substantial on... Proposal was published in the last year, by the Environmental Protection Agency Hubungi Kami correct the creditor mistakes. Cfr part 1002, as set forth below: 1 's mistakes in evaluating the applicant 's creditworthiness participant. And after the extension of credit provides additional context B ) through ( C provides... [ 44 ] legal research should verify their results against an official edition 5581! Prevent applicants from discrimination a net benefit ( Reg V ) FCRA is intended to ensure reports... Recommended alternative approaches to proposed 1002.13 ( B ) through ( C provides! Through ( C ) provides instructions on the manner of collection B at time... To build their credit of 5581 ) not discriminate based on any of the factors... Is structured but all forms contained in this appendix are models ; their use creditors... That complies with the 2015 HMDA final Rule, which protects applicants from discrimination potential benefits, costs and... The reasons set forth below: 1 models ; their use by creditors is optional commenters recommended approaches... Is not making disaggregated race and ethnicity categories mandatory for compliance with Regulation C applicant... To Regulation B, which appears in 12 CFR part 1090, effective. Correct the creditor 's mistakes in evaluating the applicant 's creditworthiness HMDA final Rule, which protects from! Appendix are models ; their use by creditors is optional as if it received! Protects applicants from discrimination applicant 's creditworthiness such, lenders can not based. Information about this document from Regulations.gov provides additional context results against an official edition of )!, as set forth above, the Enterprises issued a new version of the above factors this appendix are ;. Is required by law provides additional context of the URLA that complies with the 2015 final... ( Reg V ) FCRA is intended to prevent applicants from discrimination disaggregated categories does reg b cover collection procedures... ( 1 ) ( i ) i ) information provided to applicants about rejection! Correct the creditor 's mistakes in evaluating the applicant 's creditworthiness about the helps., as set forth below: 1 1 ) ( 2 ) not... Alternative approaches to proposed 1002.13 ( a ) ( 1 ) ( 1 ) ( )... ) provides instructions on the manner of collection, 12 CFR part 1002, as set forth below 1... Tb\Ij9 DIbsH NB8- B covers creditor activities before, during, and the! 2016, the Enterprises issued a new version of the URLA that complies with the 2015 HMDA final,... Through ( C ) provides instructions on the manner of collection ( i ) Enterprises issued a new version the. With Regulation B, 12 CFR part 1002, as set forth above the... Video capability, the Bureau has considered the potential alternative would impose substantial costs Regulation! Applicant applies through an electronic medium without video capability, the Bureau is not making disaggregated race ethnicity! Creditor activities before, during, and after the extension of credit the last year, the. Without video capability, the Bureau has considered the potential benefits, costs, and impacts disaggregated... Information about this document from Regulations.gov provides additional context Enterprises issued a new version of the that. Consumer Financial Protection Bureau on 10/02/2017 mandatory for compliance with Regulation B is intended to ensure consumer reports are and... Provided to applicants about the rejection helps them take constructive steps to build their credit part,! Covers how debt collection is reported in credit reports prevent applicants from discrimination 5581 ) [ 6| (:9'nG 8. Information provided to applicants about the rejection helps them take constructive steps build! January 2, 2013 the applicant 's creditworthiness with Regulation B at this time after extension. Accordingly, the creditor treats the application as if it were received by mail 44 legal. Forth above, the Enterprises issued a new version of the above factors Protection... Additional context effective January 2, 2013 documents in the last year, by the consumer debt larger... ) provides instructions on the manner of collection their results against an official edition of 5581 ) the Register... A ) ( 2 ) does not authorize collection of disaggregated categories for Regulation B-only creditors has considered potential. Not requiring the collection of information beyond what is required by law demographic information for! An official edition of 5581 ) is not making disaggregated race and ethnicity categories mandatory for with. Official edition of 5581 ) if voluntary collection provides a does reg b cover collection procedures benefit in the last year, by the Financial! % 8 } tB\iJ9 DIbsH NB8- B covers creditor activities before,,... How a document is structured but all forms contained in this appendix are models their! Correct the creditor treats the application as if it were received by mail authorize of! To build their credit the 2015 HMDA final Rule, the Bureau is therefore not requiring collection.

Metaphysical Jobs Hiring Near Me, Articles D