the current document as it appeared on Public Inspection on Rules for Taking Applications - 12 CFR 1002.5. Regulations B and C both contain an appendix B that provides model forms for use when collecting applicant demographic information required under the regulations. The Bureau received several additional comments about topics other than those raised by the Bureau in the 2017 ECOA Proposal. Z8m'POn0k6j'T]]>o:gzwzBOLLX6XaXDfB{cQftl9GTFS7_^W/nX6[ Under 1002.12(b)(1)(i), these records include any information required to be obtained concerning characteristics of credit applicants to monitor compliance with ECOA and Regulation B or other similar law. 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 15 U.S.C. [5] Both certain depository institutions and credit unions with less than $10 billion in assets and covered persons with more than $10 billion in assets currently report data under HMDA and thus will receive these benefits. 2. For example, an applicant who puts down his home as collateral will have additional information collected for monitoring compliance. Sec. i. headings within the legal text of Federal Register documents. A creditor can satisfy this requirement by recording on paper or by means of computer the information that the applicant provides orally and that the creditor normally considers in a credit decision. 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). The Bureau is therefore not requiring the collection of disaggregated categories for Regulation B-only creditors. Comments related to the data collection model forms and the 2016 URLA are addressed in the section-by-section analysis of the Regulation B appendix. Redlining is an unethical and illegal practice that denies loans or services to people living in majority-minority communities. 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. 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. 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. Data collection under Regulation C. For applications subject to 1002.13(a)(1), a creditor that collects information about the ethnicity, race, and sex of an applicant in compliance with the requirements of appendix B to 12 CFR part 1003 is acting in compliance with 1002.13 concerning the collection of an applicant's ethnicity, race, and sex information. 03/01/2023, 159 Reg. 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. [FR Doc. 6. Predatory Lending Laws: What You Need to Know, Discrimination in Insurance Underwriting Guidelines. 20. 5. 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. 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. Prior to Reg B, discriminatory lending practices such as redlining for mortgages was prevalent in the U.S. Regulation B makes such practices illegal. Industry commenters noted this potential conflict and expressed their support for the proposal. While use of the model forms is optional, if a creditor uses the appropriate model form, or modifies a form in accordance with the instructions provided in the Regulation B appendix, that creditor is deemed to be acting in compliance with 1002.5(b) through (d).[38]. 1. . Each document posted on the site includes a link to the ii. for fair lending practices. [11] [43] The regulation allows a bank to be exempt from having to send an adverse action notice to a small business loan applicant, as defined above, IF AT THE TIME OF APPLICATION, the bank provides certain disclosures to the customer IN A FORM THAT THE CUSTOMER CAN KEEP. Section 1002.12(b)(1) provides that creditors must retain records for 12 months for business credit, except as provided in 1002.12(b)(5). The same commenter also cited a report by health researchers discussing, among other topics, that observer-selected race, often used for death certificates, may not match self-selected race. The few commenters who specifically addressed the Bureau's proposed amendment to 1002.13(b) generally supported the modification, noting that it aligned with revised Regulation C and would facilitate consistent data collection. edition of the Federal Register. 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. If it appears that action is warranted, the Bureau will engage in further rulemaking as appropriate. As further discussed in the Section 1022(b) analysis below, the Bureau believes that the additional burden would have few benefits. Comments are publicly available at http://www.regulations.gov. The revisions and additions read as follows: 1. See Fannie Mae, Guide Forms, available at https://www.fanniemae.com/singlefamily/selling-servicing-guide-forms (last visited Sept. 6, 2017) (listing all selling and servicing guide forms); Freddie Mac, Forms and Documents, available at http://www.freddiemac.com/singlefamily/guide/ (last visited Sept. 6, 2017) (same). 80 FR 66128, 80 FR 66140, and 66144 (Oct. 28, 2015). Similarly, because the substance and form of section 7 of the 2016 URLA is substantially similar to the form the Bureau provides as a model form in Regulation C, the 2016 URLA may be used in complying with 1002.13. documents in the last year, 11 [18] should verify the contents of the documents against a final, official [12/09/14] (Reg AB Telephone Interpretation 17.06) 200.07 Rule 15Ga-1 Interagency guidance was issued in 2005. 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. 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. 2. Questions regarding ethnicity, race, sex, marital status, and age may be listed, at the creditor's option, on the application form or on a separate form that refers to the application. This feature is not available for this document. Regulatory Flexibility Act Analysis, PART 1002EQUAL CREDIT OPPORTUNITY ACT (REGULATION B), Supplement I to Part 1002Official Interpretations, Section 1002.5Rules Concerning Requests for Information, Section 1002.13Information for Monitoring Purposes, https://www.federalregister.gov/d/2017-20417, MODS: Government Publishing Office metadata, https://www.consumerfinance.gov/policy-compliance/guidance/, https://www.fanniemae.com/singlefamily/selling-servicing-guide-forms, http://www.freddiemac.com/singlefamily/guide/, http://www.census.gov/prod/cen2010/briefs/c2010br-02.pdf, https://www.fanniemae.com/content/guide/selling/b1/1/01.html;, http://www.freddiemac.com/singlefamily/guide/bulletins/snapshot.html, https://www.fanniemae.com/singlefamily/uniform-residential-loan-application, https://www.fanniemae.com/content/news/urla-announcement-august-2016.pdf, https://www.fanniemae.com/content/guide_form/urla-demographic-addendum.pdf, https://www.fanniemae.com/content/news/urla-announcement-november-2016.pdf;, https://www.fanniemae.com/content/faq/urla-ulad-faqs.pdf. 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. 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/. The applicant(s) shall be asked but not required to supply the requested information. 8. 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; and the fourth in transactions involving community property or occurring in community property States. In 2015, there were 1,178 institutions that reported HMDA data but had fewer than 25 originations and therefore would likely be exempt under the 2015 HMDA Final Rule if they continue to originate loans at a similar volume. Regulation B 1002.2(g) defines business credit to mean, with certain exceptions, extensions of credit primarily for business or commercial purposes. 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. Although some entities subject to Regulation B but not Regulation C may choose to voluntarily Start Printed Page 45694begin collecting disaggregated race and ethnicity information, the Bureau believes the most likely reason for this to occur is through adoption of the 2016 URLA, which is not part of the final rule. In the case of a two-to four-unit dwelling, the application is covered if the applicant intends to occupy one of the units as a principal residence. Start Printed Page 45687Thus, the Bureau concludes that retaining 1002.13 serves the purposes of ECOA to promote the availability of credit to all creditworthy applicants without regard to protected characteristics. Specifically, Subpart payors.ADefines terms and provides for administrative enforcement Subpart BSpecifies availability schedules, or time frames within which banks must make funds They must tell you the name of the creditor (company or person you owe), the amount you owe and how you can dispute the debt or seek verification of the debt. Copies. a. The commenter asserted the resulting data are never used by regulators, while the collection and retention imposes a substantial burden. Regulators, while the collection of disaggregated categories for Regulation B-only creditors never used by regulators while! 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