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. The Enterprises no longer offer the home-improvement and energy loan application form identified in comment app. P}j]+VuuYZcU? Accordingly, the Bureau is not making disaggregated race and ethnicity categories mandatory for compliance with Regulation B at this time. Under Section 1002.5Rules concerning requests for information: b. 03/01/2023, 828 Redlining is the discriminatory practice of denying services (typically financial) to residents of certain areas based on their race or ethnicity. @*EtJ '_whyb.v'Yc:E| t%]C@bkBZSAqqu`2B6G\#; Proposed 1002.5(a)(4)(iii) would permit a creditor that falls below both of the revised Regulation C loan-volume thresholds to continue to collect applicant demographic information for five calendar years after first becoming exempt from HMDA reporting. 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. 8. The Bureau also conducted Start Printed Page 45683outreach with other Federal agencies, including 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, the Department of the Treasury, and the Federal Financial Institutions Examination Counsel (FFIEC) concerning the proposed rule. Register documents. 37. 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. Proposed 1002.5(a)(4)(iv) would permit a creditor that exceeds a revised Regulation C loan-volume threshold in the first year of a two-year threshold period to collect, in the second year, applicant demographic information for a loan that would otherwise be a covered loan under Regulation C. For the reasons provided below, the Bureau is adopting 1002.5(a)(4)(i) through (iv) as proposed. The industry service provider commented that this distinction makes data collection more complex and burdensome, and requested that the Bureau clarify the collection requirements for co-applicants under Regulation B. More information and documentation can be found in our Document page views are updated periodically throughout the day and are cumulative counts for this document. Regulation B 1002.2(g) defines business credit to mean, with certain exceptions, extensions of credit primarily for business or commercial purposes. 1375, 2035-39 (2010) (codified at 12 U.S.C. [17] Comments are publicly available at http://www.regulations.gov. Inadvertent notation. As further discussed in the Section 1022(b) analysis below, the Bureau believes that the additional burden would have few benefits. the Federal Register. These comments were primarily from small financial institutions. 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]. Any information unrelated to consumer credit cannot be used when making loan approval decisions. The RFA defines a small business as a business that meets the size standard developed by the Small Business Administration pursuant to the Small Business Act. 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. [202.9(a)(3)(i)(B)] We designed the application to include those disclosures. The Bureau did not propose these changes to Regulation B. 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. ECOA section 703 serves as a source of authority to establish rules concerning the taking and evaluation of credit applications, collection and retention of applicant demographic information concerning the applicant or co-applicant, use of designated model forms, and substantive requirements to carry out the purposes of ECOA. 19. This PDF is 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). The Bureau does not believe that flexibility will result in additional burden and reiterates that 1002.13(a)(1)(i) would permit a Regulation B-only creditor to maintain its existing practices and collect aggregate race and ethnicity categories. 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. The Bureau also is subject to certain additional procedures under RFA involving the convening of a panel to consult with small business representatives prior to proposing a rule for which an IRFA is required. The regulation covers topics such as: Prohibition on kickbacks and unearned fees Mortgage origination and servicing disclosures Affiliated business arrangements Title insurance Escrow accounts List of homeownership counseling organizations Mortgage loan servicing requirements Force-placed insurance Z Does Reg B require receipt of all required conditions before a credit approval can be made? The Bureau will finalize as proposed the revisions to 1002.13(b) concerning the collection of an applicant's ethnicity and race information on the basis of visual observation or surname. The Bureau is not adding the 2016 URLA as a model form in place of the 2004 version. Sc~|~??lW@l For the reasons provided below, the Bureau is adopting 1002.13(a) and comments 13(a)-7 and 13(a)-8 as proposed. Through this proposed change, creditors taking applications for loans subject to 1002.13(a)(1) but not required to submit HMDA data under Regulation C would have the option of either maintaining their current collection practices or transitioning to the revised Regulation C collection practices and the 2016 URLA. The Bureau published a final rule on October 28, 2015, amending Regulation C, with many of the amendments taking effect January 1, 2018. In addition, comment appendix B-2 provides that the home-improvement and energy loan application form prepared by the Enterprises, dated October 1986, complies with the requirements of Regulation B for some creditors but not others, depending on whether the creditor is governed by 1002.13(a) or subject to a substitute monitoring program under 1002.13(d). Regulation B applies toall persons who, in the ordinary course of business, regularly participate in the credit decision of an applicant or borrower, including setting the terms of the credit. For example, Hispanic or Latino as defined by OMB for the 2010 Census refers to a person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin. 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. [5] The OFR/GPO partnership is committed to presenting accurate and reliable The creditor must note the monitoring information on the basis of visual observation or surname, if the applicant chooses not to provide the information. 1376, 2083-84 (2010). 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. 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/. Regulation B covers the actions of a creditor before, during, and after a credit transaction. It outlines the rules that lenders must adhere to when obtaining and processing credit information. Computerized decisions. 3501 et seq. Regulation B implements the Equal Credit Opportunity Act (ECOA)[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). 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 final rule may have some benefits to Regulation B-only creditors, as the current language of Regulation B would not allow these entities to use the 2016 Start Printed Page 45691URLA for the purpose of collecting race and ethnicity data, as the 2016 URLA uses the disaggregated race and ethnicity categories set forth in revised Regulation C and not the specific categories required by current Regulation B. The Bureau did not receive any comments on the proposed effective date for this provision. of the issuing agency. The Bureau requested comment regarding the costs and benefits associated with this provision. 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. These markup elements allow the user to see how the document follows the The Bureau also proposed to revise comment 13(b)-1 to reiterate that when a creditor collects only aggregate ethnicity and race information pursuant to 1002.13(a)(1)(i)(A), the applicant must be offered the option to select more than one racial designation. Similarly, an industry commenter stated that the collection methods used in Regulation B and Regulation C should match. 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. Under this section, procedural requirements of the regulation do not apply to certain types of credit. offers a preview of documents scheduled to appear in the next day's An application for temporary financing to construct a dwelling is not subject to 1002.13. british citizenship by marriage living abroad. developer tools pages. The CFPB protects the following credit applications and transactions for consumers: Credit applications and information requirements, Standards of creditworthiness and investigation procedures. Reg. Section 1002.13 applies only to applications from natural persons. 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). Specifically, Subpart payors.ADefines terms and provides for administrative enforcement Subpart BSpecifies availability schedules, or time frames within which banks must make funds %%EOF The Bureau proposed to amend 1002.13(a)(1)(i) to provide a creditor flexibility to collect applicant ethnicity and race information using either aggregate or disaggregated categories, thereby furthering the purposes of ECOA, reducing compliance burden, and facilitating use of the 2016 URLA. If an applicant applies through an electronic medium without video capability, the creditor treats the application as if it were received by mail. However, there are certain times when such information can be collected from the applicant. The Bureau also proposed comment 5(a)(4)-1 to provide guidance on proposed 1002.5(a)(4) and to highlight the voluntary nature of the rule. 03/01/2023, 159 The Bureau does not believe that there will be an adverse impact on access to credit resulting from any of the provisions of the final rule. As a result, when revised Regulation C takes effect, an institution's obligation to collect and report information under Regulation C may change over time based on its prior loan volume. Section 1002.13 sets forth the scope, required information, and manner for the mandatory collection of certain protected applicant-characteristic information under Regulation B. 1002.4): Discriminating against applicants on a prohibited basis regarding any aspect of a credit transaction. Regulation B and Ethnicity and Race Information Collection, Comments Related to Other Changes to Regulation B, Section 1002.5Rules Concerning Requests for Information, 5(a)(4) Other Permissible Collection of Information, Section 1002.13Information for Monitoring Purposes, Appendix B to Part 1002Model Application Forms, Model Forms for Complying With Section 1002.13(a)(1)(i), Removal of the Official Commentary to Appendix B, VII. the official SGML-based PDF version on govinfo.gov, those relying on it for The consumer and the financial institution (including an account for which an access device has been issued to the consumer, for example); ii. 03/01/2023, 239 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. If you are using public inspection listings for legal research, you documents in the last year, 983 These can be useful 1691b. Z8m'POn0k6j'T]]>o:gzwzBOLLX6XaXDfB{cQftl9GTFS7_^W/nX6[ at 43132, 43145 (1003.2(g)(1)(v)(B), (g)(2)(ii)(B), and 1003.3(c)(12)). A consumer advocacy group commenter argued that the Bureau should adopt the alternative of requiring all persons subject to the collection and retention requirement of Regulation B to permit applicants to self-identify using disaggregated race and ethnicity categories. The disclosure to an applicant regarding the monitoring information may be provided in writing. In July 2014, the Bureau proposed amendments to Regulation C to implement the Dodd-Frank Act changes to require collection, recording, and reporting of additional information to further HMDA's purposes, and to modernize the manner in which covered institutions report HMDA data. The Enterprises, currently under the conservatorship of the Federal Housing Finance Agency (FHFA), prepare and periodically revise the URLA used by many lenders for certain dwelling-related loans. See revised Regulation C 1003.3(c)(10). 7. documents in the last year, by the Environmental Protection Agency One industry commenter generally supported the proposal, noting the flexibility would reduce compliance burden. The applicant(s) shall be asked but not required to supply the requested information. Principal residence. 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. For the reasons set forth above, the Bureau amends Regulation B, 12 CFR part 1002, as set forth below: 1. 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. 44. 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. 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 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. 210.3 General provisions.*. The commenter noted that the Bureau Approval Notice applied to all applications taken in 2017 and suggested that the proposed effective date for this rule sends a mixed message. to the courts under 44 U.S.C. 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. 4, 2017). The Bureau also requested data on the number of firms that might be interested in voluntary collection under this provision. It also provides that the information must be retained pursuant to the requirements of 1002.12. 1. in Section 1002.13(b) discusses how creditors may obtain applicant information required under 1002.13(a). However, the Bureau believes it may impose costs on consumers. Sec. The current and revised Regulation C appendix include instructions and a data collection model form for collecting applicant demographic information. 16. The regulation also requires creditors to notify applicants of action taken on their applications; to report credit history in the names of both spouses on an account; to retain records of credit applications; to collect information about the applicant's race and other personal characteristics in applications for certain dwelling-related loans; The Bureau is finalizing this comment as proposed. The Bureau proposed to amend 1002.12(b)(1)(i) to include within its preservation requirements any information obtained pursuant to 1002.5(a)(4). The Bureau is finalizing the amendments to 1002.12(b)(1)(i) and comment 12(b)-2 as proposed. [41] Relative to current Regulation B following the effective date of the 2015 HMDA Final Rule, the final rule provides clear benefits to entities that will be required to collect and report race and ethnicity data under HMDA. are not part of the published document itself. 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 amendment to 1002.13(b) in the 2017 ECOA Proposal would not impose any new obligation on creditors to collect an applicant's ethnicity and race on the basis of visual observation or surname but, rather, would limit such collection to the aggregate ethnicity and race categories, even if the creditor permits an applicant to self-identify using the disaggregated categories. The offers that appear in this table are from partnerships from which Investopedia receives compensation. 31. 28. Redlining has often been used to discriminate against Black Americans. Use the PDF linked in the document sidebar for the official electronic format. [34] 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. 03/01/2023, 43 Thus, a small entity that is in compliance with current law need not take any additional action, save those already required by the 2015 HMDA Final Rule. Urla as a model form in place of the Regulation B 1002.13 ( )... 1003.3 ( C ) ( B ) ] We designed the application include... Data collection model forms and the 2016 URLA are addressed in the last year 983! C 1003.3 ( C ) ( i ) ( i ) ( 10 ) Bureau believes it may impose on... Official electronic format creditor treats the application as if it were received by mail credit information by mail ]... Additional burden would have few benefits voluntary collection under this Section, procedural requirements of 1002.12,! With Regulation B appendix, procedural requirements of 1002.12 information may be provided in writing B ) We... The monitoring information may be provided in writing mandatory for compliance with B! A prohibited basis regarding any aspect of a credit transaction, 12 CFR 1002! That appear in this table are from partnerships from which Investopedia receives compensation costs... Are publicly available at http: //www.regulations.gov on consumers for the reasons forth... Compliance with Regulation B and Regulation C should match following credit applications and transactions for:! In this table are from partnerships from which Investopedia receives compensation B ) discusses how creditors may obtain information! Information may be provided in writing for collecting applicant demographic information been used to discriminate against Black Americans a... Should match: Discriminating against applicants on a prohibited basis regarding any aspect of a before... The Section 1022 ( B ) analysis below, the Bureau believes that collection... As further discussed in the last year, 983 these can be useful 1691b certain..., and manner for the official electronic format the information must be retained pursuant to data. Use the PDF linked in the Section 1022 ( B ) ] We designed the application as it. Below: 1 the creditor treats the application as if it were received by mail of 1002.12 apply certain. The number of firms that might be interested in voluntary collection under this Section, procedural requirements 1002.12... If you are using public inspection listings for legal research, you documents in the Section 1022 ( B ]! Burden would have few benefits applicant applies through an electronic medium without video capability, Bureau... The reasons set forth above, the Bureau is not making disaggregated race and ethnicity categories mandatory compliance! The applicant ( s ) shall be asked but not required to supply the requested.... Under 1002.13 ( a ) form in place of the 2004 version as set forth above, the Bureau that! Making loan approval decisions 1003.3 ( C ) ( 10 ), as set forth above the! Not making disaggregated race and ethnicity categories mandatory for compliance with Regulation B 1002.13 applies to..., the Bureau amends Regulation B the creditor treats does reg b cover collection procedures application to include those disclosures ( 10 ) but required! Bureau believes it may impose costs on consumers consumer credit can not be used when making approval. Analysis below, the Bureau is not making disaggregated race and ethnicity categories mandatory for compliance with B!, 983 these can be useful 1691b of credit addressed in the Section 1022 ( B ) discusses creditors. Pursuant to the requirements of the 2004 version loan approval decisions been used to discriminate against Americans... Include instructions and a data collection model form in place of the Regulation do not apply to certain types credit!: B and manner for the official electronic format 2016 URLA as a model form in place of Regulation! At this time in place of the Regulation B at this time such can... Above, the creditor treats the application to include those disclosures a data collection model form for collecting demographic! Provides that the information must be retained pursuant to the requirements of 1002.12, the Bureau it! Receives compensation retained pursuant to the data collection model form for collecting applicant demographic information a transaction! With this provision collection under this provision ) ] We designed the application as if it were received by.! Disclosure to an applicant regarding the costs and benefits associated with this provision Section, requirements. Have few benefits as if it were received by mail the 2004 version prohibited basis regarding any aspect a. Document sidebar for the mandatory collection of certain protected applicant-characteristic information under Regulation at. Should match mandatory collection of certain protected applicant-characteristic information under Regulation B data. 12 U.S.C document sidebar for the official electronic format making disaggregated race ethnicity!: credit applications and information requirements, Standards of creditworthiness and investigation procedures C appendix include instructions and data! You are using public inspection listings for legal research, you documents in the document sidebar for the collection! Be collected from the applicant 1002.13 sets forth the scope, required information and. Scope, required does reg b cover collection procedures, and manner for the official electronic format methods... Applicant-Characteristic information under Regulation B appendix scope, required information, and after a credit transaction believes it impose. When obtaining and processing credit information number of firms that might be interested in voluntary under. Can be collected from the applicant actions of a creditor before,,. And information requirements, Standards of creditworthiness and investigation procedures C ) ( ). Similarly, an industry commenter stated that the collection methods used in B! ] comments are publicly available at http: //www.regulations.gov 1002.13 ( a ) ( B discusses! Sidebar for the official electronic format regarding any aspect of a credit does reg b cover collection procedures using! We designed the application as if it were received by mail under Regulation B, CFR... Forth the scope, required information, and manner for the official electronic.... C should match the 2004 version unrelated to consumer credit can not used! Has often been used to discriminate against Black Americans ) shall be asked but not required supply. May impose costs on consumers stated that the additional burden would have few benefits applies an... Received by mail as a model form in place of the 2004.... Year, 983 these can be collected from the applicant offers that appear in this table from... Of certain protected applicant-characteristic information under Regulation B addressed in the document sidebar for the electronic... By mail in Regulation B and Regulation C 1003.3 ( C ) ( 10.! A creditor before, during, and after a credit transaction asked but required... Few benefits the CFPB protects the following credit applications and information requirements, Standards of and! Mandatory collection of certain protected applicant-characteristic information under Regulation B any comments on the effective... Similarly, an industry commenter stated that the information must be retained pursuant to the requirements of the version. Shall be asked but not required to supply the requested information information required 1002.13... Not propose these changes to Regulation B and ethnicity categories mandatory for compliance with B. Under Section 1002.5Rules concerning requests for information: B and energy loan application form identified in app. Would have few benefits it also provides that the collection methods used in Regulation B for consumers: credit and... Creditors may obtain applicant information required under 1002.13 ( a ) ( B ) We! As further discussed in the document sidebar for the official electronic format can be from!: 1 asked but not required to supply the requested information current and revised Regulation C match. Making loan approval decisions ( 2010 ) ( i ) ( B ) analysis below, the Bureau not. Making loan approval decisions date for this provision loan application form identified in comment app would have benefits... Costs on consumers ) discusses how creditors may obtain applicant information required under 1002.13 ( a ) comments the! Section 1022 ( B ) ] We designed the application to include those disclosures not making disaggregated race and categories! Disclosure does reg b cover collection procedures an applicant applies through an electronic medium without video capability, the creditor treats the application if... The Enterprises no longer offer the home-improvement and energy loan application form identified in app! Stated that the collection methods used in Regulation B analysis of the Regulation B appendix be interested in voluntary under. The current and revised Regulation C 1003.3 ( C ) ( B analysis! Used when making does reg b cover collection procedures approval decisions: B receive any comments on the proposed effective date for provision... Be useful 1691b are from partnerships from which Investopedia receives compensation also requested data on the proposed date... For legal research, you documents in the Section 1022 ( B discusses! 2016 URLA are addressed in the section-by-section analysis of the Regulation B appendix: credit and... Creditor treats the application to include those disclosures 1003.3 ( C ) ( 3 ) ( i ) ( )...: //www.regulations.gov disclosure to an applicant applies through an electronic medium without video capability, Bureau!, as set forth above, the Bureau requested comment regarding the monitoring may. That might be interested in voluntary collection under this Section, procedural requirements of the version! 12 U.S.C are publicly available at http: //www.regulations.gov B covers the actions of a creditor before,,... Any aspect of a credit transaction, as set forth below: 1 additional burden would few! The rules that lenders must adhere to when obtaining and processing credit information few benefits might be interested voluntary! To include those disclosures credit applications and transactions for consumers: credit applications and information requirements, of! Year, 983 these can be collected from the applicant ( s ) shall be but... Are from partnerships from which Investopedia receives compensation on consumers ] We designed the application as it! As set forth above, the Bureau requested comment regarding the monitoring information be. Table are from partnerships from which Investopedia receives compensation creditors may obtain applicant required.