Home Mortgage Disclosure (Regulation C) Adjustment to Asset-Size Exemption Threshold

CourtConsumer Financial Protection Bureau
Citation86 FR 72818
Publication Date23 December 2021
Record Number2021-27899
72818
Federal Register / Vol. 86, No. 244 / Thursday, December 23, 2021 / Rules and Regulations
57
Public Law 105–277, 112 Stat. 2681 (1998).
58
5 U.S.C. 551.
consider the impact of their actions on
state and local interests. In adherence to
fundamental federalism principles, the
NCUA, an independent regulatory
agency as defined in 44 U.S.C. 3502(5),
voluntarily complies with the executive
order. This rule will not have a
substantial direct effect on the states, on
the connection between the National
Government and the states, or on the
distribution of power and
responsibilities among the various
levels of government. The NCUA has
determined this rule does not constitute
a policy that has federalism
implications for purposes of the
executive order.
D. Assessment of Federal Regulations
and Policies on Families
The NCUA has determined that this
rule will not affect family well-being
within the meaning of Section 654 of
the Treasury and General Government
Appropriations Act, 1999.
57
E. Small Business Regulatory
Enforcement Fairness Act
The Small Business Regulatory
Enforcement Fairness Act of 1996
(SBREFA) generally provides for
congressional review of agency rules.
58
A reporting requirement is triggered in
instances where the NCUA issues a final
rule as defined by Section 551 of the
Administrative Procedure Act. An
agency rule, in addition to being subject
to congressional oversight, may also be
subject to a delayed effective date if the
rule is a ‘‘major rule.’’ The NCUA does
not believe this rule is a ‘‘major rule’’
within the meaning of the relevant
sections of SBREFA. As required by
SBREFA, the NCUA will submit this
final rule to OMB for it to determine if
the final rule is a ‘‘major rule’’ for
purposes of SBREFA. The NCUA also
will file appropriate reports with
Congress and the Government
Accountability Office so this rule may
be reviewed.
List of Subjects
12 CFR Part 703
Credit unions, investments.
12 CFR Part 721
Credit unions, functions, implied
powers.
By the National Credit Union
Administration Board on December 16, 2021.
Melane Conyers-Ausbrooks,
Secretary of the Board.
For the reasons discussed above, the
NCUA Board amends 12 CFR parts 703
and 721 as follows:
PART 703—INVESTMENT AND
DEPOSIT ACTIVITIES
1. The authority citation for part 703
is revised to read as follows:
Authority: 12 U.S.C. 1757(7), 1757(8),
1757(14) and 1757(15).
2. Amend § 703.2 by removing the
definition of ‘‘Mortgage servicing rights’’
and adding in its place a definition for
‘‘Mortgage servicing assets’’ to read as
follows:
§ 703.2 Definitions.
* * * * *
Mortgage servicing assets mean those
assets, maintained in accordance with
GAAP, resulting from contracts to
service loans secured by real estate (that
have been securitized or owned by
others) for which the benefits of
servicing are expected to more than
adequately compensate the servicer for
performing the servicing.
* * * * *
3. Amend § 703.14 by adding
paragraph (m) to read as follows:
§ 703.14 Permissible investments.
* * * * *
(m) Mortgage servicing assets. A
Federal credit union may purchase
mortgage servicing assets from other
federally insured credit unions if all of
the following conditions are met:
(1) The Federal credit union received
a composite CAMELS rating of ‘‘1’’ or
‘‘2,’’ with a Management component
rating of a ‘‘1’’ or ‘‘2,’’ for the last full
examination;
(2) The underlying mortgage loans of
the mortgage servicing assets are loans
the Federal credit union is empowered
to grant;
(3) The Federal credit union
purchases the mortgage servicing assets
within the limitations of its board of
directors’ written purchase policies; and
(4) The Board of Directors or
Investment Committee approves the
purchase.
§ 703.16 [AMENDED]
4. Amend § 703.16 by removing and
reserving paragraph (a).
PART 721—INCIDENTAL POWERS
5. The authority citation for part 721
continues to read as follows:
Authority: 12 U.S.C. 1757(17), 1766 and
1789.
6. Amend § 721.3 in paragraph (h) by
revising the last sentence to read as
follows:
§ 721.3 What categories of activities are
preapproved as incidental powers
necessary or requisite to carry on a credit
union’s business?
* * * * *
(h) * * * These products or activities
may include debt cancellation
agreements, debt suspension
agreements, letters of credit, leases, and
mortgage loan servicing functions for a
member as long as the loan is owned by
a member.
* * * * *
[FR Doc. 2021–27641 Filed 12–22–21; 8:45 am]
BILLING CODE 7535–01–P
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.
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 4.7
percent increase in the average of the
CPI–W for the 12-month period ending
in November 2021, the exemption
threshold is adjusted to $50 million
from $48 million. Therefore, banks,
savings associations, and credit unions
with assets of $50 million or less as of
December 31, 2021, are exempt from
collecting data in 2022.
DATES
: This rule is effective on January
1, 2022.
FOR FURTHER INFORMATION CONTACT
:
Willie Williams, Paralegal Specialist;
Lanique Eubanks, Senior Counsel;
Office of Regulations, at (202) 435–7700.
If you require this document in an
alternative electronic format, please
contact CFPB_Accessibility@cfpb.gov.
SUPPLEMENTARY INFORMATION
: The
Bureau is amending Regulation C,
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Federal Register / Vol. 86, No. 244 / Thursday, December 23, 2021 / Rules and Regulations
1
12 U.S.C. 2801–2810.
2
12 CFR part 1003.
3
12 U.S.C. 2808(b).
4
5 U.S.C. 553(b)(B).
5
5 U.S.C. 553(d).
6
5 U.S.C. 603(a), 604(a).
7
44 U.S.C. 3501–3521.
which implements the HMDA asset
thresholds, to establish the asset-sized
exemption threshold for depository
financial institution for 2022. The asset
threshold will be $50 million for 2022.
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
report their data to the appropriate
Federal agencies and make the data
available to the public. The Bureau’s
Regulation C
2
implements HMDA.
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.
The definition of ‘‘financial
institution’’ in § 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 2021, the
threshold was $48 million. During the
12-month period ending in November
2021, the average of the CPI–W
increased by 4.7 percent. As a result, the
exemption threshold is increased to $50
million for 2022. Thus, banks, savings
associations, and credit unions with
assets of $50 million or less as of
December 31, 2021, are exempt from
collecting data in 2022. An institution’s
exemption from collecting data in 2022
does not affect its responsibility to
report data it was required to collect in
2021.
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.
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, 2022. 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.
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
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
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 Associate Director of Research,
Markets, and Regulations, Janis K.
Pappalardo, having reviewed and
approved this document, is delegating
the authority to electronically sign this
document to Laura Galban, 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)
1. The authority citation for part 1003
continues to read as follows:
Authority: 12 U.S.C. 2803, 2804, 2805,
5512, 5581.
2. Amend supplement I to part 1003
by revising 2(g) Financial Institution
under the heading Section 1003.2—
Definitions to read as follows:
Supplement I to Part 1003—Official
Interpretations
* * * * *
Section 1003.2—Definitions
* * * * *
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 § 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
§ 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 2022, the asset-
size exemption threshold is $50 million.
Banks, savings associations, and credit
unions with assets at or below $50 million
as of December 31, 2021, are exempt from
collecting data for 2022.
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Federal Register / Vol. 86, No. 244 / Thursday, December 23, 2021 / Rules and Regulations
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 § 1003.2(g) 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 § 1003.2(g). For
example, A and B merge. The surviving or
newly formed institution meets the loan
threshold described in § 1003.2(g)(1)(v)(B) if
the surviving or newly formed institution, A,
and B originated a combined total of at least
200 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 § 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
§ 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 § 1003.2(g), that is not exempt
from reporting under § 1003.3(a), and ‘‘an
institution that is not covered’’ means either
an institution that is not a financial
institution, as defined in § 1003.2(g), or an
institution that is exempt from reporting
under § 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 200 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 § 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 § 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
§ 1003.2(g)(1). An entity is nonetheless a
financial institution if it meets the definition
of nondepository financial institution under
§ 1003.2(g)(2).
* * * * *
Laura Galban,
Federal Register Liaison, Bureau of Consumer
Financial Protection.
[FR Doc. 2021–27899 Filed 12–22–21; 8:45 am]
BILLING CODE 4810–AM–P
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1026
Truth in Lending Act (Regulation Z)
Adjustment to Asset-Size Exemption
Threshold
AGENCY
: Bureau of Consumer Financial
Protection.
ACTION
: Final rule; official
interpretation.
SUMMARY
: The Bureau of Consumer
Financial Protection (Bureau) is
amending the official commentary that
interprets the requirements of the
Bureau’s Regulation Z (Truth in
Lending) to reflect changes in the asset-
size thresholds for certain creditors to
qualify for an exemption to the
requirement to establish an escrow
account for a higher-priced mortgage
loan. These changes reflect updates to
the exemption from TILA’s escrow
requirement of creditors that, together
with affiliates that regularly extended
covered transactions secured by first
liens, had total assets of less than $2
billion (adjusted annually for inflation)
and the exemption the Bureau added, by
implementing section 108 of the
Economic Growth, Regulatory Relief,
and Consumer Protection Act
(EGRRCPA), for certain insured
depository institutions and insured
credit unions with assets of $10 billion
or less (adjusted annually for inflation).
These amendments are 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 4.7 percent
increase in the average of the CPI–W for
the 12-month period ending in
November 2021, the exemption
threshold for creditors and their
affiliates that regularly extended
covered transactions secured by first
liens is adjusted to $2.336 billion from
$2.230 billion. The exemption threshold
for certain insured depository
institutions and insured credit unions
with assets of $10 billion or less
(adjusted annually for inflation) is
adjusted to $10.473 billion from $10
billion.
DATES
: This rule is effective on January
1, 2022.
FOR FURTHER INFORMATION CONTACT
:
Willie Williams, Paralegal Specialist;
Lanique Eubanks, Thomas Dowell,
Senior Counsels, Office of Regulations,
at (202) 435–7700. If you require this
document in an alternative electronic
format, please contact CFPB_
Accessibility@cfpb.gov.
SUPPLEMENTARY INFORMATION
:
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