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. As discussed above in Part V, the Bureau disagrees with the consumer advocacy group commenter that there would be little burden to Regulation B-only creditors from making the collection of disaggregated race and ethnicity categories mandatory. 19. This will allow the information to be available for monitoring and enforcing compliance with ECOA, Regulation B, and other Federal or State statutes or regulations. Two commenters opposed the collection of applicant demographic information on the basis of visual observation or surname under any circumstances. The proposed amendment would align 1002.13 collection of disaggregated information with the collection requirements of Regulation C. While the Bureau acknowledges that this limitation on the collection of applicant demographic information involves some complexity, the Bureau believes that, on balance, aligning 1002.13 collection methods with Regulation C will be less complex than introducing different rules for 1002.13(b) alone. Public Law 111-203, 124 Stat. Interagency guidance was issued in 2005. 1. Industry commenters supported the change, with several confirming the potential benefits noted above. The Bureau does not believe that consumers will experience any costs or benefits from this provision except to the extent that financial institutions achieve cost savings and pass any such cost savings on to their customers. The Bureau also proposed to remove the outdated 2004 URLA from the Regulation B appendix, add generic model forms for compliance with 1002.13, and maintain approval of the 2016 URLA through a freestanding approval notice. The revisions and additions read as follows: 1. Overdraft payment programs and consumer protection. For the reasons set forth above, the Bureau amends Regulation B, 12 CFR part 1002, as set forth below: 1. 03/01/2023, 828 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. The notice provides that, although the use of the 2016 URLA by creditors is not required under Regulation B, a creditor that uses the 2016 URLA without any modification that would violate 1002.5(b) through (d) acts in compliance with 1002.5(b) through (d). Prior to Reg B, discriminatory lending practices such as redlining for mortgages was prevalent in the U.S. Regulation B makes such practices illegal. 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. This compensation may impact how and where listings appear. 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. The rule makes certain changes to the Regulation B appendix. on Each document posted on the site includes a link to the 5. 8. i. 3 (a) Public-utilities credit. While every effort has been made to ensure that As noted above, the Bureau believes that consumers could suffer substantial harm if the requirement were removed. Forms for collecting data. As discussed in the Section 1022(b) analysis for the 2015 HMDA Final Rule, collection of disaggregated race and ethnicity data can enhance the ability of regulators, researchers and community groups to conduct fair lending analysis. To the extent that the provision benefits firms and consumers, consumers in rural areas will see the largest benefits. 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. See Fannie Mae, Uniform Residential Loan Application, https://www.fanniemae.com/singlefamily/uniform-residential-loan-application# (last visited Sept. 6, 2017); see also Press Release, Uniform Mortgage Data Program, Fannie Mae and Freddie Mac at the direction of the FHFA, The Redesigned URLA and ULAD Mapping Document Are Here!, (Aug. 23, 2016), available at https://www.fanniemae.com/content/news/urla-announcement-august-2016.pdf. Section 1002.5(a)(2) further provides that a creditor may obtain information required by a regulation, order, or agreement issued by, or entered into with, a court or an enforcement agency to monitor or enforce compliance with ECOA, Regulation B, or other Federal or State statutes and regulations. One industry commenter requested clarification that use of the 2016 URLA complies with Regulation B. [4], The HMDA requirement to collect and report applicant information was recently updated through a final rule amending Regulation C, published in October of 2015 (2015 HMDA Final Rule). 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. The Bureau acknowledges that the requirement to collect or provide applicant demographic information from co-applicants differs between 1002.13 and revised Regulation C. The Bureau concludes that these differences may create additional burden and complexity for creditors, who may need to modify their practices concerning co-applicant collection depending on whether collection is required under both Regulation B and revised Regulation C or only under revised Regulation C. The Bureau is therefore revising 1002.13(b) to clarify that a creditor is permitted, but is not required, to collect the information set forth in 1002.13(a) from a second or additional co-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. documents in the last year, 1479 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. 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. When originally enacted, ECOA gave the Federal Reserve Board responsibility for prescribing the implementing regulation. Such entities likely serve primarily customers in rural areas. This would lead to unnecessary burden from collecting both aggregate and disaggregated 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. Other commenters did not directly address this alternative, but several industry commenters supported the flexibility of the proposal with respect to collection of disaggregated race and ethnicity information, implicitly opposing making this collection mandatory. These proposed changes included establishing applicant demographic information collection, reporting, and public disclosure requirements for automobile creditors similar to HMDA, requiring adverse action notices in certain situations involving counteroffers, and adding record-keeping and applicant demographic information collection requirements for brokers and arrangers of credit. Accordingly, the Bureau has authority to issue regulations to administer ECOA. The Public Inspection page documents in the last year, 36 [16] A mortgage loan application must be documented using the URLA in the mortgage loan file for the loan to be eligible for sale to the Enterprises. This PDF is Adverse action is also a negative action that impacts employment. has no substantive legal effect. 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. Reg. Subpart A: Collection of Checks and Other Items by Federal Reserve Banks Section 210.1 Authority, purpose, and scope Subpart A governs the collection of checks and other items and the handling of returned checks by Reserve Banks. Sec. The offers that appear in this table are from partnerships from which Investopedia receives compensation. 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. 24. 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. B-2. 2011), available at http://www.census.gov/prod/cen2010/briefs/c2010br-02.pdf. 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). A person can have only one principal residence at a time. The rule does not add the 2016 URLA to the Regulation B appendix; that form is subject to a separate Federal Register notice issued by the Bureau acknowledging its compliance with certain provisions of Regulation B.[8]. publication in the future. 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. 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. 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. Certain of these categories include several more specific race, heritage, nationality, or country of origin groups. The requirement to collect, in certain circumstances, applicant demographic information on the basis of visual observation or surname where the applicant does not provide this information has been a longstanding requirement of 1002.13(b). Many HMDA reporters are also subject to the collection requirements of 1002.13. documents in the last year, by the Environmental Protection Agency Demographic information collected under Regulation B by those institutions with larger loan volumes may be used in statistical analysis that supports fair lending supervision and enforcement. The President of the United States communicates information on holidays, commemorations, special observances, trade, and policy through Proclamations. 82 FR 43088, 43100-43102 (Sept. 13, 2017); see also id. [18] 1. The documents posted on this site are XML renditions of published Federal Errors in credit reports are fairly common, and many people only find out about them after being denied credit. 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]. of the issuing agency. 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