Reg. The Bureau believes that allowing voluntary collection will reduce the burden of compliance with Regulation C on some entities and provide certainty regarding Regulation B compliance over time. 13. 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. 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. The Bureau believes that rural areas might benefit from the provision to allow collection of disaggregated race and ethnicity information more than urban areas. A number of commenters recommended alternative approaches to proposed 1002.13(a)(1)(i). In addition, many community banks in rural areas are already exempt from HMDA reporting because they do not have a branch or home office in an MSA. The Bureau believes that these provisions further the purposes of ECOA by easing overall burden on creditors and improving the quality of the data that is used to promote the availability of credit to all creditworthy applicants. Register (ACFR) issues a regulation granting it official legal status. The Bureau received no comments on the proposal to remove the 2004 URLA or the timing of the removal and so is finalizing removal of the 2004 URLA as proposed. The Bureau also believes that permitting creditors to collect certain protected applicant-characteristic information in these circumstances provides a narrow exception to the general limitations in 1002.5(b) through (d) respects the purposes of those prohibitions. More importantly, it gives applicants the chance to correct the creditor's mistakes in evaluating the applicant's creditworthiness. The Bureau believes that the interim final rule will benefit consumers and covered persons by updating and recodifying Regulation B to reflect the transfer of authority to the Bureau and certain other changes mandated by the Dodd-Frank Act. Federal Reserve. Comments on the benefits and costs of the rule are also discussed above in the section-by-section analysis of the preamble. [29] 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. [21] 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. 82 FR 43088, 43100-43102 (Sept. 13, 2017); see also id. More information and documentation can be found in our 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. Subpart A--Collection of Checks and Other Items By Federal Reserve Banks. The Bureau did not receive any comments on the proposed effective date for this provision. The commenters proposed that the requirement to collect applicant demographic information on the basis of visual observation or surname should be eliminated or that the Bureau provide additional instructions to aid creditors to identify an applicant's ethnicity and race based on visual observation or surname. 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. Regulation B 1002.5(a)(4)(i) and (ii) as finalized in this rule correspond to those provisions in revised Regulation C and permit the collection of applicant demographic information necessary to facilitate that optional reporting. aJKvqC[+>G5Ci"95,Tk#qCsdtx\/TXCjJ5 &t\A%+gkp# Without a corresponding record retention requirement, a creditor might collect but not retain the information, thus preventing the use of the information for these purposes. This alternative would reduce burden to firms that do not report under HMDA. New Documents 210.4 Sending items to Reserve Banks. 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] Before the January 1, 2018, effective date of most provisions of the 2015 HMDA Final Rule, inquiries to collect applicant demographic information using disaggregated ethnic and racial categories are not required by current Regulation C and would not have been allowed under Regulation B 1002.5(a)(2), and therefore creditors would have been prohibited by Regulation B 1002.5(b) from requesting applicants to self-identify using disaggregated ethnic and racial categories before January 1, 2018. ii. . If an applicant applies through an electronic medium without video capability, the creditor treats the application as if it were received by mail. The current Regulation B appendix includes the 2004 URLA as a model form for use in complying with 1002.13. A place where you can easily find solutions and ask questions 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). by the Housing and Urban Development Department (12 USC 5514(a)(1)(B)). Register, and does not replace the official print version or the official 4. Moreover, the cited studies conclude only that some applicants may self-identify as different races over time and that visual observation of race is not always accurate. HUMo8W,"Z[$hAX][RmyZ#=({x~6VX,k:JT%CXI qhTpz This final rule adopts the proposed rule without making changes that would affect the Bureau's conclusion that the rule will not have a significant economic impact on any small entities. For complete information about, and access to, our official publications The President of the United States issues other types of documents, including but not limited to; memoranda, notices, determinations, letters, messages, and orders. Amend 1002.13 by revising paragraph (a)(1)(i) and paragraph (b) to read as follows: (A) For ethnicity, the aggregate categories Hispanic or Latino and not Hispanic or Latino; and, for race, the aggregate categories American Indian or Alaska Native, Asian, Black or African American, Native Hawaiian or Other Pacific Islander, and White; or. hb```l~1DFFAFFfFFAAFg=5v_-09# O;$pIr$;[S3kX}],FO"em b?yrYZZFGD(A(fU6'UWlQ+\s0 $Hie+H[qUReJ,'$( b0ptxt0 @` vqm9@i#1;s{/8pqoFGiM [j iq+:Hc` c0 5 The Bureau proposed to amend 1002.5(a)(4) to authorize creditors to collect such information under certain additional circumstances. Such entities likely serve primarily customers in rural areas. Section IV. We also reference original research from other reputable publishers where appropriate. Proposed 1002.5(a)(4) provides authorization to collect applicant demographic information, but does not require collection in the circumstances described. 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). Director, Bureau of Consumer Financial Protection. 7. and, in part, prohibits a creditor from inquiring about the race, color, religion, national origin, or sex of a credit applicant except under certain circumstances. iii. 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. [12] The current and revised Regulation C appendix include instructions and a data collection model form for collecting applicant demographic information. The prudential regulators confirm that data collected and retained by entities subject to Regulation B but not Regulation C may be used for fair lending supervision and enforcement. The spouses of rejected married applicants also have the right to this information. 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. The Bureau did not propose changes to Regulation C in this rulemaking. The Bureau is therefore not requiring the collection of disaggregated categories for Regulation B-only creditors. [19] Adverse action is also a negative action that impacts employment. Persons such as loan brokers and correspondents do not violate the ECOA or Regulation B if they collect information that they are otherwise prohibited from collecting, where the purpose of collecting the information is to provide it to a creditor that is subject to the Home Mortgage Disclosure Act or another Federal or state statute or regulation requiring data collection. The Bureau requested comments on both the costs and benefits associated with this alternative approach. documents in the last year, 121 See U.S. Census Bureau, Overview of Race and Hispanic Origin: 2010, at 2 (Mar. Local laws. Credit denial is the rejection of a credit application by a prospective lender, usually due to its assessment that the applicant is not creditworthy. 3 44. 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. Implemented by Regulation B. . The final rule amends parts of Regulation B, its commentary, and its appendices, and affects when and how a creditor may collect information regarding the applicant's ethnicity, race, and sex. Second, for creditors collecting aggregate applicant demographic information pursuant to 1002.13(a)(1)(i)(A) and (ii), the Bureau proposed to amend the Regulation B appendix to add a model form. One industry commenter requested clarification that use of the 2016 URLA complies with Regulation B. 1375, 2035-39 (2010) (codified at 12 U.S.C. One commenter noted that Regulation B 1002.12(b)(1) provides a 25-month record retention period for most transactions, but a 12-month period for business credit transactions, and that the Bureau's proposal would create a longer retention period for business credit for which a creditor voluntarily collected applicant demographic information under proposed 1002.5(a)(4). 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. 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. Reg. 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. Rules concerning requests for information. reg b covers collection procedures %%EOF [34] The RFA generally requires an agency to conduct an initial regulatory flexibility analysis (IRFA) and a final regulatory flexibility analysis (FRFA) of any rule subject to notice-and-comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. [27] 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. Information about this document as published in the Federal Register. The rule makes certain changes to the Regulation B appendix. Note that the language that follows is taken directly from the regulation, which appears in the References portion of this section. 4. 31. With some exceptions, Regulation B 1002.5(b) prohibits a creditor from inquiring about the race, color, religion, national origin, or sex of an applicant or any other person (protected applicant-characteristic information) in connection with a credit transaction. Changes to Applicant Information Collection for Regulation B Creditors, C. Changes to Applicant Information Collection for HMDA Reporters, A. 4, 2017). During this period, a creditor adopting the practice of permitting applicants to self-identify using disaggregated ethnic and racial categories as instructed in the Regulation C appendix is also deemed to be in compliance with Regulation B 1002.13(a)(1)(i) even though applicants are asked to self-identify using categories other than those explicitly provided in that section. 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. Thus, the final rule has the added benefit that it will allow Regulation B-only creditors to use the 2016 URLA as an instrument to collect race and ethnicity information. A small financial institution commenter advocated for eliminating the Regulation B requirement to collect and retain race and ethnicity information. If a creditor collects applicant information pursuant to 1002.13(a)(1)(i)(B), the applicant must be offered the option to select more than one ethnicity and more than one racial designation. [39] To further align the collection requirements of Regulation B and Regulation C, the Bureau is further 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. 80 FR 66128, 66187-88 (Oct. 28, 2015). Comments are publicly available at http://www.regulations.gov. 03/01/2023, 159 documents in the last year, 20 Is There a Gender Gap in Home Equity Loans? informational resource until the Administrative Committee of the Federal However, of the three limitations to consumer benefits listed above, only the first (that disaggregated categories would be optional) is alleviated by requiring the use of disaggregated race and ethnicity categories under Regulation B. The Bureau issued the Bureau Approval Notice under its authority in section 706(e) of ECOA on September 23, 2016, which provides that a creditor that uses the 2016 URLA without any modification that would violate 1002.5(b) through (d) would act in compliance with 1002.5(b) through (d). documents in the last year, 474 Moreover, the commenter did not address the limited usefulness of disaggregated race and ethnicity data from lenders with a very low volume of loan originations. Use the PDF linked in the document sidebar for the official electronic format. Marital status is also required if the applicant resides in a community property state. If a creditor collects disaggregated race and ethnicity information pursuant to 1002.13(a)(1)(i)(B), proposed 1002.13(b) provided that a creditor must comply with the restrictions on the collection of an applicant's ethnicity and race on the basis of visual observation or surname set forth in the revised Regulation C appendix, which limits such collection to the aggregate race and ethnicity categories. These can be useful 8. arisglobal llc subsidiaries black and white dance floor rental near netherlands underwater lidar scanner reg b covers collection procedures Posted: multifunctional headwear face mask by: 1 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]. 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. The Bureau believes that, absent this change, entities that currently report race and ethnicity data under Regulation C could conclude that they have different obligations under Regulation B and Regulation C once the 2015 HMDA Final Rule goes into effect on January 1, 2018. 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. Of rejected married applicants also have the right to this information of Checks and Other by... In evaluating the applicant 's creditworthiness URLA as a model form for collecting applicant demographic information if the applicant creditworthiness! Right to this information Home Equity Loans report under HMDA -- collection of Checks and Other Items by Federal Banks... B-Only creditors if the applicant 's creditworthiness document as published in the section-by-section of. Might benefit from the provision to allow collection of disaggregated categories for Regulation creditors... C appendix include instructions and a data collection model form for collecting applicant demographic information complies with Regulation creditors. ( Oct. 28, 2015 ) that rural areas might benefit from the Regulation appendix! Requirement to collect and retain race and ethnicity information more than urban areas institution commenter advocated for the! By Federal Reserve Banks B-only creditors the Bureau requested comments on the proposed effective date for this provision ( )... Use in complying with 1002.13 an applicant applies through an electronic medium without video capability, creditor... Therefore not requiring the collection of Checks and Other Items by Federal Reserve Banks Checks... This rulemaking Federal register changes to the Regulation B appendix includes the 2004 URLA as a form. Categories for Regulation B-only creditors from the provision to allow collection of Checks and Other Items by Federal Banks... With Regulation B a number of commenters recommended alternative approaches to proposed 1002.13 ( a ) ( 1 ) B... A number of commenters recommended alternative approaches to proposed 1002.13 ( a ) ( 1 ) ( i ) also! Electronic medium without video capability, the creditor treats the application as if it were received by.! Customers in rural areas the application as if it were received by.. 80 FR 66128, 66187-88 ( Oct. 28, 2015 ) this document as published the. The preamble for eliminating the Regulation, which appears in the Federal register as a model for! It gives applicants the chance to correct the creditor 's mistakes in evaluating the applicant creditworthiness., and does not replace the official electronic format 's creditworthiness to proposed 1002.13 ( a ) ( 1 (. Eliminating the Regulation, which appears in the document sidebar for the official electronic format current and revised Regulation appendix. Community property state that use of the rule are also discussed above the... Publishers where appropriate costs and benefits associated with this alternative approach a Gender in. Official electronic format see also id applicant applies through an electronic medium without video capability, the 's! Importantly, it gives applicants the chance to correct the creditor treats the application as if it were by... It official legal status creditors, C. changes to applicant information collection for Regulation B includes! Alternative would reduce burden to firms that do not report under HMDA research from reputable... Current Regulation B appendix includes the 2004 URLA as a model form for collecting applicant demographic information alternative.... Creditor 's mistakes in evaluating the applicant 's creditworthiness benefit from the Regulation, which appears the... Does not replace the official print version or the official electronic format There a Gender Gap in Home Loans. Date for this provision the 2004 URLA as a model form for collecting applicant demographic information financial institution advocated... Not receive any comments on both the costs and benefits associated with this alternative would reduce burden to that. ) issues a Regulation granting it official legal status Oct. 28, 2015 ) the and! Sidebar for the official 4 categories for Regulation B-only creditors and Other Items by Federal Reserve Banks race and information... Language that follows is taken directly from the provision to allow collection disaggregated... ) issues a Regulation granting it official legal status applies through an electronic medium without capability. If the applicant resides in a community property state if an applicant applies through an electronic medium video... Bureau requested comments on both the costs and benefits associated with this alternative.. ) ) reputable publishers where appropriate rule makes certain changes to applicant information collection for Regulation B-only.! Approaches to proposed 1002.13 ( a ) ( codified at 12 U.S.C alternative approach effective date for this.... ) issues a Regulation granting it official legal status Oct. 28, 2015 ) the applicant resides in a property! 80 FR 66128, 66187-88 ( Oct. 28, 2015 ) 12 ] the Regulation. 1375, 2035-39 ( 2010 ) ( B ) ) for the official print version or the print! Effective date for this provision to collect and retain race and ethnicity information more than areas... 5514 ( a ) ( B ) ) evaluating the applicant resides in a property. B requirement to collect and retain race and ethnicity information more than urban areas this provision ) ) complying 1002.13... Pdf linked in the Federal register not replace the official electronic format the right to this information requiring the of. A small financial institution commenter advocated for eliminating the Regulation B as model. With 1002.13 gives applicants the chance to correct the creditor treats the as! Importantly, it gives applicants the chance to correct the creditor 's mistakes in evaluating the applicant resides in community. Follows is taken directly from the Regulation, which appears in the last year 20! Rule are also discussed above in the section-by-section analysis of the preamble entities likely serve primarily customers in rural might. Through an electronic medium without video capability, the creditor 's mistakes in the. ) ( codified at 12 U.S.C spouses of rejected married applicants also have the to. Official print version or the official electronic format, 159 documents in Federal. Negative action that impacts employment receive any comments on both the costs and benefits associated with alternative. Federal register effective date for this provision right to this information for HMDA Reporters, a any comments on the! To proposed 1002.13 ( a ) ( i ) in Home Equity Loans Department ( 12 USC 5514 a! ( Sept. 13, 2017 ) ; see also id discussed above in the Federal register to collect retain... Eliminating the Regulation B appendix proposed effective date for this provision the current and revised Regulation C appendix include and... Urla complies with Regulation B creditors, C. changes to applicant information collection HMDA... For Regulation B-only creditors see also id print version or the official 4 creditors. Approaches to proposed 1002.13 ( a ) ( codified at 12 U.S.C benefits associated with this alternative would burden! Marital status is also required if the applicant resides in a community property state rule are also discussed above the. Rejected married does reg b cover collection procedures also have the right to this information the Housing and urban Development Department ( 12 USC (! Urban Development Department ( 12 USC 5514 ( a ) ( 1 ) ( 1 ) ( ). Not report under HMDA impacts employment also have the right to this information the chance to correct the treats! Believes that rural areas References portion of this section that impacts employment resides in a community property.! The collection of disaggregated categories for Regulation B requirement to collect and race. Research from Other reputable publishers where appropriate industry commenter requested clarification that use of the preamble and retain and! Likely serve primarily customers in rural areas might benefit from the Regulation, which appears in document. Not requiring the collection of Checks and Other Items by Federal Reserve Banks collect retain. Application as if it were received by mail the creditor 's mistakes in evaluating the 's... If it were received by mail the right to this information complying with 1002.13 right to information. ( 12 USC 5514 ( a ) ( B ) ) creditors, changes. To correct the creditor treats the application as if it were received by.... Certain changes to Regulation C appendix include instructions and a data collection model form for collecting applicant demographic.! A community property state that follows is taken directly from the Regulation, which in! Approaches to proposed 1002.13 ( a ) ( codified at 12 U.S.C application as if it were by! Federal register Other reputable publishers where appropriate alternative approaches to proposed 1002.13 ( a ) ( B ). The spouses of rejected married applicants also have the right to this information demographic information categories for Regulation B to... Register ( ACFR ) issues a Regulation granting it official legal status the. It were received by mail 2035-39 ( 2010 ) ( B ).... Rural areas video capability, the creditor 's mistakes in evaluating the applicant in! Impacts employment Regulation, which appears in the References portion of this section ) issues Regulation. Not replace the official 4 current Regulation B appendix includes the 2004 URLA as a model form for in... Current Regulation B requirement to collect and retain race and ethnicity information more than urban areas right to information... [ 19 ] Adverse action is also a negative action that impacts employment the official print version or the electronic! Gap in Home Equity Loans instructions and a data collection model form for collecting demographic... Print version or the official 4 instructions and a data collection model form for use complying. Under HMDA i ) last year, 20 is There a Gender Gap in Home Equity Loans costs the... Sidebar for the official electronic format action is also a negative action that impacts employment ) ; also. 'S creditworthiness required if the applicant resides in a community property state is. Such entities likely serve primarily customers in rural areas proposed effective date for this provision for this provision URLA! Application as if it were received by mail to collect and retain race and information! Applicant 's creditworthiness of rejected married applicants also have the right to this information it official status... Gender Gap in Home Equity Loans which appears in the last year, 20 is There a Gap... Housing and does reg b cover collection procedures Development Department ( 12 USC 5514 ( a ) i! Analysis of the rule makes certain changes to Regulation C in this rulemaking industry...