Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB
Federal Register, Volume 83 Issue 225 (Wednesday, November 21, 2018)
Federal Register Volume 83, Number 225 (Wednesday, November 21, 2018)
Notices
Pages 58773-58775
From the Federal Register Online via the Government Publishing Office www.gpo.gov
FR Doc No: 2018-25338
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FEDERAL RESERVE SYSTEM
Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB
AGENCY: Board of Governors of the Federal Reserve System.
SUMMARY: The Board of Governors of the Federal Reserve System (Board) is adopting a proposal to extend for three years, with revision, the Reporting, Recordkeeping, and Disclosure Requirements Associated with the Home Mortgage Disclosure Act (HMDA) and Loan/Application Register (LAR) required by Regulation C (FR HMDA LAR, OMB No. 7100-0247).
FOR FURTHER INFORMATION CONTACT: Federal Reserve Board Clearance Officer--Nuha Elmaghrabi--Office of the Chief Data Officer, Board of Governors of the Federal Reserve System, Washington, DC 20551 (202) 452-3829. Telecommunications Device for the Deaf (TDD) users may contact (202) 263-4869, Board of Governors of the Federal Reserve System, Washington, DC 20551.
OMB Desk Officer--Shagufta Ahmed--Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street NW, Washington, DC 20503 or by fax to (202) 395-6974.
SUPPLEMENTARY INFORMATION: On June 15, 1984, the Office of Management and Budget (OMB) delegated to the Board authority under the Paperwork Reduction Act (PRA) to approve and assign OMB control numbers to collection of information requests and requirements conducted or sponsored by the Board. Board-approved collections of information are incorporated into the official OMB inventory of currently approved collections of information. Copies of the Paperwork Reduction Act Submission, supporting statements and approved collection of information instrument(s) are placed into OMB's public docket files. The Board may not conduct or sponsor, and the respondent is not required to respond to, an information collection that has been extended, revised, or implemented on or after October 1, 1995, unless it displays a currently valid OMB control number.
Final approval under OMB delegated authority of the extension for three years, with revision, of the following information collection:
Report title: Reporting, Recordkeeping, and Disclosure Requirements Associated with the Home Mortgage Disclosure Act (HMDA) and Loan/
Application Register (LAR) required by Regulation C.
Agency form number: FR HMDA LAR.
OMB control number: 7100-0247.
Frequency: Annually and quarterly.
Respondents: State member banks (SMBs), their subsidiaries, subsidiaries of bank holding companies, U.S. branches and agencies of foreign banks (other than federal branches, federal agencies, and insured state branches of foreign banks), commercial lending companies owned or controlled by foreign banks, and organizations operating under section 25 or 25A of the Federal Reserve Act.
Estimated number of respondents: Update policies, procedures, and systems (one-time), 505 respondents; Reporting--Tier 1 (annual reporter), 2 respondents; Tier 1 (quarterly reporter), 1 respondent; Tier 2, 148 respondents; Tier 2 (Crapo), 300 respondents; and Tier 3 (Crapo), 54 respondents; Recordkeeping--Tier 1 (annual reporter), 2 respondents; Tier 1 (quarterly reporter), 1 respondent; Tier 2, 448 respondents; and Tier 3, 54 respondents; and Disclosure--Tier 1 (annual reporter), 2 respondents; and Tier 1 (quarterly reporter), 1 respondent.
Estimated average hours per response: Update policies, procedures, and systems (one-time), 176 hours; Reporting--Tier 1 (annual reporter), 5,969 hours; Tier 1 (quarterly reporter), 6,903 hours; Tier 2, 1,232 hours; Tier 2 (Crapo), 986 hours; and Tier 3 (Crapo), 64 hours; Recordkeeping--Tier 1 (annual reporter), 4,130 hours; Tier 1 (quarterly reporter), 4,130 hours; Tier 2, 83 hours; and Tier 3, 27 hours; and Disclosure--Tier 1 (annual reporter), 5 hours; and Tier 1 (quarterly reporter), 5 hours.
Estimated annual burden hours: Update policies, procedures, and systems (one-time), 88,880 hours; Reporting--Tier 1 (annual reporter), 11,938 hours; Tier 1 (quarterly reporter), 27,612 hours; Tier 2, 182,336 hours; Tier 2: Crapo, 295,800 hours; and Tier 3: Crapo, 3,456 hours; Recordkeeping--Tier 1 (annual reporter), 8,260 hours; Tier 1 (quarterly reporter), 16,520 hours; Tier 2, 37,184 hours; and Tier 3, 1,458 hours; and Disclosure--Tier 1 (annual reporter), 10 hours; and Tier 1 (quarterly reporter), 20 hours.
General description of report: HMDA was enacted in 1975 and is implemented by Regulation C. Generally, HMDA requires certain depository and non-depository institutions that make certain mortgage loans to collect, report, and disclose data about originations and purchases of mortgage loans, as well as loan applications that do not result in originations (for example, applications that are denied or withdrawn). HMDA was enacted to provide regulators and the public with loan data that can be used to: (1) Help determine whether financial institutions are serving the housing needs of their communities, (2) assist public officials in distributing public-sector investments so as to attract private investment to areas where it is needed, and (3) assist in identifying possible discriminatory lending patterns and enforcing anti-discrimination statutes.\1\ Supervisory agencies, state and local public officials, and members of the public use the data to aid in the enforcement of the Community Reinvestment Act, the Equal Credit Opportunity Act, and the Fair Housing Act and to aid in identifying areas for residential redevelopment and rehabilitation.
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\1\ 12 CFR 1003.1(b).
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Legal authorization and confidentiality: The FR HMDA LAR is authorized pursuant to section 304(j) of HMDA (12 U.S.C. 2803(j)), which requires that the Bureau of Consumer Financial Protection (Bureau) prescribe by regulation the form of loan application register information that must be reported by covered financial institutions. Section 1003.5 of Regulation C implements this statutory provision, and requires covered financial institutions to submit reports
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to their appropriate federal agency. Section 304(h)(2)(A) of HMDA (12 U.S.C. 2803(h)(2)(A)) designates the Board as the appropriate agency with respect to the entities described above. The FR HMDA LAR is mandatory. HMDA requires the information collected on the FR HMDA LAR to be made available to the general public in the form proscribed by the Bureau. The Bureau is authorized to redact or modify the scope of the information before it is publicly disclosed to protect the privacy of loan applicants and to protect depository institutions from liability under any federal or state privacy law (12 U.S.C. 2803(j)(2)(B)). The redacted information may be kept confidential under exemption 6 of the Freedom and Information Act, which protects from release information that, if disclosed, would ``constitute a clearly unwarranted invasion of personal privacy'' (5 U.S.C. 552(b)(6)).
Current actions: On August 28, 2018, the Board published a notice in the Federal Register (83 FR 43868) requesting public comment for 60 days on the extension, with revision, of the Reporting, Recordkeeping, and Disclosure Requirements Associated with the Home Mortgage Disclosure Act (HMDA) and Loan/Application Register (LAR) required by Regulation C. Consistent with the Bureau's final rules amending Regulation C, effective January 1, 2018, as well as recent statutory amendments to HMDA that were enacted on May 24, 2018,\2\ the Board proposes to revise the FR HMDA LAR by expanding the data reported and by modifying the types of institutions required to report and the types of loans required to be reported. Beginning January 1, 2018, an institution that is otherwise not eligible for a partial exemption under section 104(a) of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), as discussed further below, is required to collect and report all required data points required under HMDA if it either originates 25 or more \3\ closed-end mortgage loans or 500 or more open-end lines of credit \4\ secured by a dwelling in each of the two preceding years, in addition to meeting other applicable coverage criteria.\5\ For these institutions, the final rules standardize the loan volume threshold used to determine coverage of both depository and non-depository institutions. An institution will only report a covered loan if it has met the loan origination threshold for that loan category (open-end or closed-end).
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\2\ On May 24, 2018, the President signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). In relevant part, section 104(a) of EGRRCPA amends HMDA to exempt certain insured depository institutions and insured credit unions from collecting and reporting those data fields that were required by HMDA sections 304(b)(5) and (6), as implemented by the Bureau's final rules.
\3\ Small depository institutions that originated fewer than 25 closed-end mortgage loans in either 2015 or 2016 ceased HMDA data collection on January 1, 2017.
\4\ Under the 2015 final rules, financial institutions would have been required to report home-equity lines of credit if they made 100 or more such loans in each of the last two years. On August 24, 2017, the Bureau amended the final rules to increase the institutional coverage and loan threshold from 100 to 500 or more loans through calendar years 2018 and 2019. See 82 FR 43088 (Sept. 13, 2017). This temporary increase in the threshold will provide time for the Bureau to consider whether to initiate another rulemaking to address the appropriate level for the threshold for data collected beginning January 1, 2020.
\5\ Asset size and geographic location coverage tests also apply. See 12 CFR FR 1003.2(g).
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The final rules generally will require covered institutions to collect and report any mortgage loan secured by a dwelling, including open-end lines of credit, regardless of the loan's purpose. However, the final rules exclude unsecured home-improvement loans (which historically were required to be reported), dwelling-secured loans that are made principally for a commercial or business purpose, agricultural-purpose loans, and other specifically excluded loans.\6\
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\6\ 12 CFR 1003.2(e).
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The final rules also will require collection of additional data points. For covered institutions that are otherwise not eligible for the partial exemption under section 104(a) of EGRRCPA, as discussed further below, these additional data points will be reported in 2019. These new fields include
Additional information about the applicant or borrower, such as age and credit score
information about the loan pricing, such as the borrower's total cost to obtain a mortgage, temporary introductory rates, and borrower-paid origination charges
information about loan features, such as the loan term, prepayment penalties, or non-amortizing features (such as interest only or balloon payments)
additional information about property securing the loan, such as property value and property type
In addition, the Bureau's final rules amend several existing requirements, including the requirements for collection and reporting of information regarding an applicant's or borrower's ethnicity, race and sex.\7\
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\7\ For the complete list of data points, see 12 CFR 1003.4.
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Effective May 24, 2018, an institution that is eligible for the partial exemption under section 104(a) of EGRRCPA will only need to report a subset of the data points required under HMDA if it originates fewer than 500 closed-end mortgage loans in each of the two preceding calendar years.\8\ Consistent with section 104(a) of EGRRCPA and the Bureau's recent statement addressing the applicability of this statutory amendment to HMDA,\9\ the Board estimates that institutions eligible for the partial exemption will report approximately half the data points currently required by the Bureau's final rules on the loans described above.\10\
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\8\ Section 104(a) of EGRRCPA also provides a partial exemption to the data collection and reporting requirements under HMDA for institutions that originate fewer than 500 open-end lines of credit in each of the two preceding calendar years and otherwise meet the applicable performance evaluation rating standards under CRA. However, institutions eligible for this partial exemption are already completely exempt from all data collection and reporting requirements under the temporary exemption provided by the Bureau's final rules until January 1, 2020.
\9\ See Bureau Statement, which provides that for loans subject to the partial exemption, ``the requirements of HMDA section 304(b)(5) an (6) shall not apply . . . therefore, institutions are exempt from the collection, recording, and reporting requirements for some, but not all, of the data points specified in current Regulation C.''
\10\ Section 104(a) of EGRRCPA does not define the terms ``closed-end loan'' or ``open-end line of credit.'' However, for purposes of estimating burden, the Board is making the assumption that these terms will be used consistent with how they are currently defined in Regulation C. See 12 CFR 1002.2(d) and (o), which defines the term ``closed-end loan'' and ``open-end line of credit,'' respectively. Further, for purposes of estimating burden, the Board is making the assumption that the loan volume thresholds for closed-
end loans will be determined consistent with how such loan thresholds are currently used under Regulation C to determine if a transaction must be reported. See 12 CFR 1003.3(c)(11) and (12), which provides how to determine the loan threshold volume for closed-end loan reporters and open-end line of credit reporters, respectively.
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The Bureau will collect the HMDA/LAR data on behalf of the applicable Federal supervisory agency, and the data will be combined and aggregated for each Metropolitan Statistical Area (MSA). Certain aggregated data will continue to be publicly available, though the Bureau has yet to determine what the information collected in the new data fields will be disclosed once the final rules are fully effective. The comment period for this notice expired on October 29, 2018. The Board did not receive any comments. The revisions will be implemented as proposed.
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Board of Governors of the Federal Reserve System, November 15, 2018.
Yao-Chin Chao,
Assistant Secretary of the Board.
FR Doc. 2018-25338 Filed 11-20-18; 8:45 am
BILLING CODE 6210-01-P
