Home Mortgage Disclosure (Regulation C) Adjustment to Asset-Size Exemption Threshold
| Published date | 22 December 2020 |
| Citation | 85 FR 83409 |
| Record Number | 2020-28230 |
| Section | Rules and Regulations |
| Court | Consumer Financial Protection Bureau |
Federal Register, Volume 85 Issue 246 (Tuesday, December 22, 2020)
[Federal Register Volume 85, Number 246 (Tuesday, December 22, 2020)]
[Rules and Regulations]
[Pages 83409-83411]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-28230]
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BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Part 1003
Home Mortgage Disclosure (Regulation C) Adjustment to Asset-Size
Exemption Threshold
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Final rule; official interpretation.
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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is
amending the official commentary that interprets the requirements of
the Bureau's Regulation C (Home Mortgage Disclosure) to reflect the
asset-size exemption threshold for banks, savings associations, and
credit unions based on the annual percentage change in the average of
the Consumer Price Index for Urban Wage Earners and Clerical Workers
(CPI-W). Based on the 1.3 percent increase in the average of the CPI-W
for the 12-month period ending in November 2020, the exemption
threshold is adjusted to $48 million from $47 million. Therefore,
banks, savings associations, and credit unions with assets of $48
million or less as of December 31, 2020, are exempt from collecting
data in 2021.
DATES: This rule is effective on January 1, 2021.
FOR FURTHER INFORMATION CONTACT: Willie Williams, Paralegal Specialist;
Rachel Ross, Attorney-Advisor; Office of Regulations, at (202) 435-
7700. If you require this document in an alternative electronic format,
please contact [email protected].
SUPPLEMENTARY INFORMATION: The Bureau is amending Regulation C, which
implements the HMDA asset thresholds, to establish the asset-sized
exemption threshold for depository financial institution for 2021. The
asset threshold will be $48 million for 2021.
I. Background
The Home Mortgage Disclosure Act of 1975 (HMDA) \1\ requires most
mortgage lenders located in metropolitan areas to collect data about
their housing related lending activity. Annually, lenders must
[[Page 83410]]
report their data to the appropriate Federal agencies and make the data
available to the public. The Bureau's Regulation C \2\ implements HMDA.
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\1\ 12 U.S.C. 2801-2810.
\2\ 12 CFR part 1003.
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Prior to 1997, HMDA exempted certain depository institutions as
defined in HMDA (i.e., banks, savings associations, and credit unions)
with assets totaling $10 million or less as of the preceding year-end.
In 1996, HMDA was amended to expand the asset-size exemption for these
depository institutions.\3\ The amendment increased the dollar amount
of the asset-size exemption threshold by requiring a one-time
adjustment of the $10 million figure based on the percentage by which
the CPI-W for 1996 exceeded the CPI-W for 1975, and it provided for
annual adjustments thereafter based on the annual percentage increase
in the CPI-W, rounded to the nearest multiple of $1 million.
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\3\ 12 U.S.C. 2808(b).
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The definition of ``financial institution'' in Sec. 1003.2(g)
provides that the Bureau will adjust the asset threshold based on the
year-to-year change in the average of the CPI-W, not seasonally
adjusted, for each 12-month period ending in November, rounded to the
nearest $1 million. For 2020, the threshold was $47 million. During the
12-month period ending in November 2020, the average of the CPI-W
increased by 1.3 percent. As a result, the exemption threshold is
increased to $48 million for 2021. Thus, banks, savings associations,
and credit unions with assets of $48 million or less as of December 31,
2020, are exempt from collecting data in 2021. An institution's
exemption from collecting data in 2021 does not affect its
responsibility to report data it was required to collect in 2020.
II. Procedural Requirements
A. Administrative Procedure Act
Under the Administrative Procedure Act (APA), notice and
opportunity for public comment are not required if the Bureau finds
that notice and public comment are impracticable, unnecessary, or
contrary to the public interest.\4\ Pursuant to this final rule,
comment 2(g)-2 in Regulation C, supplement I, is amended to update the
exemption threshold. The amendment in this final rule is technical and
non-discretionary, and it merely applies the formula established by
Regulation C for determining any adjustments to the exemption
threshold. For these reasons, the Bureau has determined that publishing
a notice of proposed rulemaking and providing opportunity for public
comment are unnecessary. Therefore, the amendment is adopted in final
form.
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\4\ 5 U.S.C. 553(b)(B).
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Section 553(d) of the APA generally requires publication of a final
rule not less than 30 days before its effective date, except (1) a
substantive rule which grants or recognizes an exemption or relieves a
restriction; (2) interpretive rules and statements of policy; or (3) as
otherwise provided by the agency for good cause found and published
with the rule.\5\ At a minimum, the Bureau believes the amendments fall
under the third exception to section 553(d). The Bureau finds that
there is good cause to make the amendments effective on January 1,
2021. The amendment in this final rule is technical and non-
discretionary, and it applies the method previously established in the
agency's regulations for determining adjustments to the threshold.
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\5\ 5 U.S.C. 553(d).
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B. Regulatory Flexibility Act
Because no notice of proposed rulemaking is required, the
Regulatory Flexibility Act does not require an initial or final
regulatory flexibility analysis.\6\
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\6\ 5 U.S.C. 603(a), 604(a).
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C. Paperwork Reduction Act
The Bureau has determined that this final rule does not impose any
new or revise any existing recordkeeping, reporting, or disclosure
requirements on covered entities or members of the public that would be
collections of information requiring approval by the Office of
Management and Budget under the Paperwork Reduction Act.\7\
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\7\ 44 U.S.C. 3501-3521.
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D. Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Bureau will submit a report containing this rule and other required
information to the United States Senate, the United States House of
Representatives, and the Comptroller General of the United States prior
to the rule taking effect. The Office of Information and Regulatory
Affairs (OIRA) has designated this rule as not a ``major rule'' as
defined by 5 U.S.C. 804(2).
III. Signing Authority
The Acting Associate Director for Research, Markets and
Regulations, Dan S. Sokolov, having reviewed and approved this
document, is delegating the authority to electronically sign this
document to Grace Feola, a Bureau Federal Register Liaison, for
purposes of publication in the Federal Register.
List of Subjects in 12 CFR Part 1003
Banks, banking, Credit unions, Mortgages, National banks, Reporting
and recordkeeping requirements, Savings associations.
Authority and Issuance
For the reasons set forth above, the Bureau amends Regulation C, 12
CFR part 1003, as set forth below:
PART 1003--HOME MORTGAGE DISCLOSURE (REGULATION C)
0
1. The authority citation for part 1003 continues to read as follows:
Authority: 12 U.S.C. 2803, 2804, 2805, 5512, 5581.
0
2. In supplement I to part 1003, under Section 1003.2--Definitions,
2(g) Financial Institution is revised to read as follows:
Supplement I to Part 1003--Official Interpretations
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Section 1003.2--Definitions
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2(g) Financial Institution
1. Preceding calendar year and preceding December 31. The
definition of financial institution refers both to the preceding
calendar year and the preceding December 31. These terms refer to the
calendar year and the December 31 preceding the current calendar year.
For example, in 2021, the preceding calendar year is 2020, and the
preceding December 31 is December 31, 2020. Accordingly, in 2021,
Financial Institution A satisfies the asset-size threshold described in
Sec. 1003.2(g)(1)(i) if its assets exceeded the threshold specified in
comment 2(g)-2 on December 31, 2020. Likewise, in 2021, Financial
Institution A does not meet the loan-volume test described in Sec.
1003.2(g)(1)(v)(A) if it originated fewer than 100 closed-end mortgage
loans during either 2019 or 2020.
2. Adjustment of exemption threshold for banks, savings
associations, and credit unions. For data collection in 2021, the
asset-size exemption threshold is $48 million. Banks, savings
associations, and credit unions with assets at or below $48 million as
of December 31, 2020, are exempt from collecting data for 2021.
3. Merger or acquisition--coverage of surviving or newly formed
institution. After a merger or acquisition, the surviving or newly
formed institution is a financial institution under Sec. 1003.2(g)
[[Page 83411]]
if it, considering the combined assets, location, and lending activity
of the surviving or newly formed institution and the merged or acquired
institutions or acquired branches, satisfies the criteria included in
Sec. 1003.2(g). For example, A and B merge. The surviving or newly
formed institution meets the loan threshold described in Sec.
1003.2(g)(1)(v)(B) if the surviving or newly formed institution, A, and
B originated a combined total of at least 500 open-end lines of credit
in each of the two preceding calendar years. Likewise, the surviving or
newly formed institution meets the asset-size threshold in Sec.
1003.2(g)(1)(i) if its assets and the combined assets of A and B on
December 31 of the preceding calendar year exceeded the threshold
described in Sec. 1003.2(g)(1)(i). Comment 2(g)-4 discusses a
financial institution's responsibilities during the calendar year of a
merger.
4. Merger or acquisition--coverage for calendar year of merger or
acquisition. The scenarios described below illustrate a financial
institution's responsibilities for the calendar year of a merger or
acquisition. For purposes of these illustrations, a ``covered
institution'' means a financial institution, as defined in Sec.
1003.2(g), that is not exempt from reporting under Sec. 1003.3(a), and
``an institution that is not covered'' means either an institution that
is not a financial institution, as defined in Sec. 1003.2(g), or an
institution that is exempt from reporting under Sec. 1003.3(a).
i. Two institutions that are not covered merge. The surviving or
newly formed institution meets all of the requirements necessary to be
a covered institution. No data collection is required for the calendar
year of the merger (even though the merger creates an institution that
meets all of the requirements necessary to be a covered institution).
When a branch office of an institution that is not covered is acquired
by another institution that is not covered, and the acquisition results
in a covered institution, no data collection is required for the
calendar year of the acquisition.
ii. A covered institution and an institution that is not covered
merge. The covered institution is the surviving institution, or a new
covered institution is formed. For the calendar year of the merger,
data collection is required for covered loans and applications handled
in the offices of the merged institution that was previously covered
and is optional for covered loans and applications handled in offices
of the merged institution that was previously not covered. When a
covered institution acquires a branch office of an institution that is
not covered, data collection is optional for covered loans and
applications handled by the acquired branch office for the calendar
year of the acquisition.
iii. A covered institution and an institution that is not covered
merge. The institution that is not covered is the surviving
institution, or a new institution that is not covered is formed. For
the calendar year of the merger, data collection is required for
covered loans and applications handled in offices of the previously
covered institution that took place prior to the merger. After the
merger date, data collection is optional for covered loans and
applications handled in the offices of the institution that was
previously covered. When an institution remains not covered after
acquiring a branch office of a covered institution, data collection is
required for transactions of the acquired branch office that take place
prior to the acquisition. Data collection by the acquired branch office
is optional for transactions taking place in the remainder of the
calendar year after the acquisition.
iv. Two covered institutions merge. The surviving or newly formed
institution is a covered institution. Data collection is required for
the entire calendar year of the merger. The surviving or newly formed
institution files either a consolidated submission or separate
submissions for that calendar year. When a covered institution acquires
a branch office of a covered institution, data collection is required
for the entire calendar year of the merger. Data for the acquired
branch office may be submitted by either institution.
5. Originations. Whether an institution is a financial institution
depends in part on whether the institution originated at least 100
closed-end mortgage loans in each of the two preceding calendar years
or at least 500 open-end lines of credit in each of the two preceding
calendar years. Comments 4(a)-2 through -4 discuss whether activities
with respect to a particular closed-end mortgage loan or open-end line
of credit constitute an origination for purposes of Sec. 1003.2(g).
6. Branches of foreign banks--treated as banks. A Federal branch or
a State-licensed or insured branch of a foreign bank that meets the
definition of a ``bank'' under section 3(a)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(a)) is a bank for the purposes of Sec.
1003.2(g).
7. Branches and offices of foreign banks and other entities--
treated as nondepository financial institutions. A Federal agency,
State-licensed agency, State-licensed uninsured branch of a foreign
bank, commercial lending company owned or controlled by a foreign bank,
or entity operating under section 25 or 25A of the Federal Reserve Act,
12 U.S.C. 601 and 611 (Edge Act and agreement corporations) may not
meet the definition of ``bank'' under the Federal Deposit Insurance Act
and may thereby fail to satisfy the definition of a depository
financial institution under Sec. 1003.2(g)(1). An entity is
nonetheless a financial institution if it meets the definition of
nondepository financial institution under Sec. 1003.2(g)(2).
* * * * *
Dated: December 17, 2020.
Grace Feola,
Federal Register Liaison, Bureau of Consumer Financial Protection.
[FR Doc. 2020-28230 Filed 12-21-20; 8:45 am]
BILLING CODE 4810-AM-P
