does reg b cover collection procedures
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. 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. Reg B is part of the Equal Credit Opportunity Act (ECOA), which is regulated and enforced by the Consumer Financial Protection Bureau (CFPB). [21] 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. Two commenters opposed the collection of applicant demographic information on the basis of visual observation or surname under any circumstances. 09/29/2017 at 8:45 am. 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 federal Fair Credit Reporting Act covers how debt collection is reported in credit reports. 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. Certain of these categories include several more specific race, heritage, nationality, or country of origin groups. [12/09/14] (Reg AB Telephone Interpretation 17.06) 200.07 Rule 15Ga-1 Regulation CC contains four subparts. Although these entities need not make any changes to their race and ethnicity collection procedures, they may desire to do so in the future by adopting the 2016 URLA. The disclosure to an applicant regarding the monitoring information may be provided in writing. "Federal Fair Lending Regulations and Statutes: Equal Credit Opportunity (Regulation B)," Page 1. In addition, the Bureau proposed amendments adding 1002.5(a)(4) to permit creditors to collect applicant demographic information when they would not otherwise be required to do so in certain scenarios where creditors may benefit from being able to adopt Regulation C compliance practices before they become required or maintain them when they are no longer required. establishing the XML-based Federal Register as an ACFR-sanctioned 15 U.S.C. 5. iii. In the Bureau Approval Notice, the Bureau determined that, while a creditor is not required to use the 2016 URLA, a creditor that uses the form without any modification that would violate 1002.5(b) through (d) would act in compliance with 1002.5(b) through (d). on To the extent that the provision benefits firms and consumers, consumers in rural areas will see the largest benefits. Federal Reserve. Reg. For data collected in or after 2018, the 2015 HMDA Final Rule amends the requirement for collection and reporting of applicant demographic information. 4, 2017). 29. This appendix contains four 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. Regulation B creditors will also be able to collect voluntarily certain information about applicants for certain mortgage loan scenarios as provided for in 1002.5(a)(4). documents in the last year. In addition, the Bureau proposed several revisions to 1002.13(b) and (c) and its commentary to align further the collection requirements of Regulation B with revised Regulation C. Section 1002.13(a) sets forth certain protected applicant-characteristic information a creditor must collect for applications on certain dwelling-secured loans. It is not required to store the complete written application, nor is it required to enter the remaining items of information into the system. The regulation requires written applications for the types of credit covered by 1002.13. The fifth model form, the 2004 URLA, is described in the Regulation B appendix as appropriate for residential mortgage transactions and contains a model disclosure for use in complying with current 1002.13. A refinancing occurs when an existing obligation is satisfied and replaced by a new obligation undertaken by the same borrower. 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. Section 1002.12(b)(1) provides that a creditor must retain certain records for 25 months, or 12 months for business credit. Potential Benefits and Costs to Consumers and Covered Persons, Providing an Option To Collect Disaggregated Race and Ethnicity for Regulation B, Model Forms for Collecting Race and Ethnicity Data, Allowing Voluntary Collection of Applicant Information, C. Impact on Depository Institutions and Credit Unions With $10 Billion or Less in Assets, as Described in Dodd-Frank Section 1026, VIII. Accordingly, the Bureau is finalizing the Regulation B appendix as proposed, without including the 2016 URLA. The permitted collection may also alleviate concerns about violating 1002.5(b) if a financial institution collects applicant demographic information for a particular dwelling-secured loan made primarily for a business or commercial purpose, based on the financial institution's belief that it is a home purchase loan, a refinancing, or a home improvement loan, but the financial institution later discovers that this belief was mistaken, and therefore collection of applicant demographic information was not required under Regulation C. The Bureau is adopting 1002.5(a)(4)(v) to address the commenter's suggestion. 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. Principal residence. 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. Marital status is also required if the applicant resides in a community property state. Creditors can ask about the number of children, their ages, and the borrower's financial obligations relating to the children. documents in the last year, by the Environmental Protection Agency B-2. headings within the legal text of Federal Register documents. As proposed, comment 13(a)-8 permitted a creditor to choose on an application-by-application basis whether to collect aggregate information pursuant to 1002.13(a)(1)(i)(A) or disaggregated information pursuant to 1002.13(a)(1)(i)(B). [6] The Public Inspection page Two commenters supported the proposal regarding record retention, noting that it would facilitate Start Printed Page 45686monitoring of fair lending laws and serve ECOA's purposes and that it seemed appropriate given the proposed amendments to 1002.5(a)(4). 1. c. Under Section 1002.13Information for monitoring purposes: i. Paragraph 13(a)Information to be requested is revised. The Bureau proposed an effective date of January 1, 2018, which aligns with the effective date for the bulk of the revisions to Regulation C in the 2015 HMDA Final Rule. Specifically, the Bureau proposed an amendment to 1002.13 to permit a creditor additional flexibility in how it collects applicant ethnicity and race information by allowing use of either aggregate or disaggregate ethnicity and race categories on an application-by-application basis. ii. 3. 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. In light of these inquiries, the Bureau determined that it would be beneficial to establish through rulemaking appropriate standards in Regulation B concerning the collection of an applicant's ethnicity and race information similar to those in revised Regulation C. Because many of the financial institutions most affected by this proposed rule are supervised by the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board (Board), and the National Credit Union Administration (NCUA), the Bureau conducted outreach to these agencies. Financial institutions that report under Regulation C, have reported in the prior five years, or may report in the near future may also be affected by this rule. 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. offers a preview of documents scheduled to appear in the next day's If the debt collector does not provide . on endstream endobj startxref Comments on the benefits and costs of the rule are also discussed above in the section-by-section analysis of the preamble. Paragraph 13(b)Obtaining of information is revised. 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. 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