=+f=?z)0p0+~#zSsTib5MuC={0z7&8J8],?8A eMa`?P2EDJaq{%c 1375, 1980 (2010) (codified at 12 U.S.C. A creditor may devise its Start Printed Page 45697own disclosure so long as it is substantially similar. 09/29/2017 at 8:45 am. 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 no longer offer the home-improvement and energy loan application form identified in comment app. See revised Regulation C 1003.3(c)(10). 1. in british citizenship by marriage living abroad. A large number of industry commenters supported proposed 1002.5(a)(4) and the five-year timeframe for 1002.5(a)(4)(i), (ii), and (iii). 1376, 2083-84 (2010). 43. Appendix B to part 1002, at paragraphs 1, 3. The documents posted on this site are XML renditions of published Federal Reg B also helps anyone who is denied credit by requiring lenders to give them an explanation. Reg. documents in the last year, 983 Z8m'POn0k6j'T]]>o:gzwzBOLLX6XaXDfB{cQftl9GTFS7_^W/nX6[ *. Current 1002.13(a)(1) requires that creditors collect information regarding the applicant's ethnicity and race using two aggregate ethnicity categories (Hispanic or Latino and Not Hispanic or Latino) and five aggregate race categories (American Indian or Alaska Native, Asian, Black or African American, Native Hawaiian or Other Pacific Islander, and White). 18. The collections of information related to Regulation B and Regulation C have been previously reviewed and approved by OMB and assigned OMB Control Number 3170-0013 (Regulation B) and 3170-0008 (Regulation C). The Bureau is finalizing this comment as proposed. The current Regulation B appendix includes the 2004 URLA as a model form. The Bureau solicited comment on permitting the collection of applicant demographic information in the circumstances described in proposed 1002.5(a)(4), and, in particular, regarding the proposed five-year time frame, and whether there are other specific, narrowly tailored circumstances not described in 1002.5(a)(2) or proposed 1002.5(a)(4) under which a creditor would benefit from being able to collect applicant demographic information for mortgage loan applicants. In keeping with the broad reach of the statute's prohibition, the regulation covers creditor activities before, during, and after the extension of credit. 210.3 General provisions.*. One commenter stated that extending the requirement to collect applicant demographic information on the basis of visual observation or surname to Regulation B-only creditors is outside the scope of ECOA. One commenter requested clarification that the voluntary collection under proposed 1002.5(a)(4) was truly voluntary and not a new compliance requirement. documents in the last year, 940 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. 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. 2430 0 obj <> endobj 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. iii. Public Law 111-203, 124 Stat. Home Mortgage Disclosure (Regulation C), 80 FR 66128 (Oct. 28, 2015). Regulation B 1. 4, 2017). A large number of industry commenters supported the proposed amendments to 1002.13(a)(1)(i). This information is discussed below in the section-by-section analysis and subsequent parts of the notice, as applicable. The information provided to applicants about the rejection helps them take constructive steps to build their credit. On the federal level, the Federal Trade Commission regulates what is called the Fair Debt Collection Practices Act (FDCPA). 2. (12 USC 5514(a)(1)(B)). [32] New Documents provide legal notice to the public or judicial notice to the courts. Scope. 80 FR 66128, 66187-88 (Oct. 28, 2015). Regulation B is intended to prevent applicants from discrimination in any aspect of a credit transaction. Paragraph 13(c)Disclosure to applicants is revised. 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. [25] This Regulation has amendments effective January 1, 2019. A purpose of ECOA is to promote the availability of credit to all creditworthy applicants without regard to race, color, religion, national origin, sex, marital status, or age (provided the applicant has the capacity to contract) or other protected characteristics. [40] In general, 1002.5(b) prohibits a creditor from inquiring about protected applicant-characteristic information in connection with a credit transaction, except under certain circumstances. on Errors in credit reports are fairly common, and many people only find out about them after being denied credit. Counts are subject to sampling, reprocessing and revision (up or down) throughout the day. A creditor that receives an application to refinance an existing extension of credit made by that creditor for the purchase of the applicant's dwelling may request the monitoring information again but is not required to do so if it was obtained in the earlier transaction. Commenters expressed concern that the data points added to Regulation C in the 2015 HMDA Final Rule burdened financial institutions and, because of this burden, the commenters encouraged the Bureau to reduce the HMDA data fields to only statutorily required fields. The Enterprises also made available a Demographic Information Addendum, which is identical in form to section 7 of the 2016 URLA. corresponding official PDF file on govinfo.gov. Redlining is the discriminatory practice of denying services (typically financial) to residents of certain areas based on their race or ethnicity. That is, the CFPB interprets FDCPA section 808 (1) to permit collection of an amount only if: (1) the agreement creating the debt expressly permits the charge and some law does not prohibit it; or (2) some law expressly permits the charge, even if the agreement creating the debt is silent. 15. [29] legal research should verify their results against an official edition of 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. Regulation B 1002.2(g) defines business credit to mean, with certain exceptions, extensions of credit primarily for business or commercial purposes. [6] The commenter asserted the resulting data are never used by regulators, while the collection and retention imposes a substantial burden. documents in the last year, 1479 on If the applicant(s) chooses not to provide the information or any part of it, that fact shall be noted on the form. 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. 24. 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. See revised Regulation C 1003.2(e). Consumer Finance Protection Bureau. The Enterprises have advised that the Demographic Information Addendum may be used by lenders at any time on or after January 1, 2017, as a replacement for section X (Information for Government Monitoring Purposes) in the current URLA, dated July 2005 (revised June 2009). Such entities likely serve primarily customers in rural areas. This would lead to unnecessary burden from collecting both aggregate and disaggregated data. Commenters noted that being able to collect applicant demographic data when not required by HMDA would facilitate better data collection procedures, aid in retaining system and organizational knowledge, help prepare for reporting data in subsequent years, and help creditors transition to the 2016 URLA. 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. Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. ), Federal agencies are generally required to seek the Office of Management and Budget (OMB)'s approval for information collection requirements prior to implementation. 29. Hu^U[4'~f,t?o{NwYrB-ez,]{-}7/;UsUe5_,Vl]vw~lh}ive8=&fw}\*!tTb(8+0(0-D)3\-|bS ]4#i!N#.tD >X_\pI;$?gacx`BtvAa,q]k"m ? ,H?tYrjfMN 2.q9^w\k.ke5jXcLKjvszyD G Therefore, applications for credit secured by the applicant's principal residence but made primarily for a purpose other than the purchase or refinancing of the principal residence (such as loans for home improvement and debt consolidation) are not subject to the information-collection requirements. Instead, the Bureau is providing for two alternative data collection model forms for the purpose of collecting ethnicity and race information. documents in the last year, 662 Register, and does not replace the official print version or the official 28. 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]. Because the Enterprises have not announced a cutover date for the mandatory use of the 2016 URLA, the Bureau is finalizing January 1, 2022, as the effective date for the removal of the 2004 URLA from the Regulation B appendix. [9] on To facilitate compliance with Regulation B and further align the collection requirements of Regulations B and Regulation C, the Bureau is also 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. Sections with amendments are marked with an asterisk (*). The information must be retained pursuant to the requirements of 1002.12. These scenarios Start Printed Page 45681generally involve types of loans subject to Regulation C where a creditor voluntarily reports information under Regulation C, reported such information in the past five years, or may report such information in the near future. 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. P}j]+VuuYZcU? [44] by the Housing and Urban Development Department 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. Unlike the costs associated with the adoption of the 2016 URLA, these costs would not otherwise be incurred in the normal course of business. The applicant(s) shall be asked but not required to supply the requested information. Definition, Legality, and Effects, Federal Fair Lending Regulations and Statutes: Equal Credit Opportunity (Regulation B). Proposed 1002.13(a)(1)(i) provided that a creditor must collect the applicant's information using either the aggregate ethnicity and race categories currently required or the ethnicity and race categories and subcategories set forth in the revised Regulation C appendix, which provide disaggregated ethnicity and race categories. Reg B mandates that lenders provide explanations to rejected applicants within 30 days of receiving their completed applications. Some Regulation B-only creditors sell mortgages to the Enterprises, and would benefit from being able to use the 2016 URLA. I'd first recommend that you go review this section and the applicable Official Staff Commentary. on FederalRegister.gov 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. The Bureau did not propose changes to Regulation C in this rulemaking. The President of the United States manages the operations of the Executive branch of Government through Executive orders. 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. For data collected in or after 2018, the 2015 HMDA Final Rule amends the requirement for collection and reporting of applicant demographic information. better and aid in comparing the online edition to the print edition. The Bureau is issuing this final rule pursuant to its authority under section 703 of ECOA, as amended by section 1085 of the Dodd-Frank Act. The offers that appear in this table are from partnerships from which Investopedia receives compensation. d. Appendix BModel Application Forms is removed. 45697Own Disclosure so long as it is substantially similar would lead to unnecessary from. 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