Home Mortgage Disclosure (Regulation C), 78465-78483 [2011-31712]

Agencies

• BUREAU OF CONSUMER FINANCIAL PROTECTION

[Federal Register Volume 76, Number 243 (Monday, December 19, 2011)]
[Rules and Regulations]
[Pages 78465-78483]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-31712]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
week.

========================================================================


Federal Register / Vol. 76, No. 243 / Monday, December 19, 2011 / 
Rules and Regulations

[[Page 78465]]



BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1003

[Docket No. CFPB-2011-0020]
RIN 3170-AA06


Home Mortgage Disclosure (Regulation C)

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Interim final rule with request for public comment.

-----------------------------------------------------------------------

SUMMARY: Title X of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Dodd-Frank Act) transferred rulemaking authority for a 
number of consumer financial protection laws from seven Federal 
agencies to the Bureau of Consumer Financial Protection (Bureau) as of 
July 21, 2011. The Bureau is in the process of republishing the 
regulations implementing those laws with technical and conforming 
changes to reflect the transfer of authority and certain other changes 
made by the Dodd-Frank Act. In light of the transfer to the Bureau of 
the Board of Governors of the Federal Reserve System's (Board's) 
rulemaking authority for the Home Mortgage Disclosure Act of 1975 
(HMDA), as amended, the Bureau is publishing for public comment an 
interim final rule establishing a new Regulation C (Home Mortgage 
Disclosure). This interim final rule does not impose any new 
substantive obligations on persons subject to the existing Regulation 
C, previously published by the Board.

DATES: This interim final rule is effective on December 30, 2011. 
Comments must be received on or before February 17, 2012.

ADDRESSES: You may submit comments, identified by Docket No. CFPB-2011-
0020 or RIN 3170-AA06, by any of the following methods:
     Electronic: https://www.regulations.gov. Follow the 
instructions for submitting comments.
     Mail: Monica Jackson, Office of the Executive Secretary, 
Bureau of Consumer Financial Protection, 1500 Pennsylvania Avenue NW., 
(Attn: 1801 L Street), Washington, DC 20220.
     Hand Delivery/Courier in Lieu of Mail: Monica Jackson, 
Office of the Executive Secretary, Bureau of Consumer Financial 
Protection, 1700 G Street NW., Washington, DC 20006.
    All submissions must include the agency name and docket number or 
Regulatory Information Number (RIN) for this rulemaking. In general, 
all comments received will be posted without change to  https://www.regulations.gov. In addition, comments will be available for public 
inspection and copying at 1700 G Street NW., Washington, DC 20006, on 
official business days between the hours of 10 a.m. and 5 p.m. Eastern 
Time. You can make an appointment to inspect the documents by 
telephoning (202) 435-7275.
    All comments, including attachments and other supporting materials, 
will become part of the public record and subject to public disclosure. 
Sensitive personal information, such as account numbers or social 
security numbers, should not be included. Comments will not be edited 
to remove any identifying or contact information.

FOR FURTHER INFORMATION CONTACT: Mitchell E. Hochberg or Gregory Evans, 
Office of Regulations, at (202) 435-7700.

SUPPLEMENTARY INFORMATION: 

I. Background

    The Home Mortgage Disclosure Act of 1975, as amended (HMDA; 12 
U.S.C. 2801 et seq.) requires most mortgage lenders located in 
metropolitan areas to collect data about their housing-related lending 
activity. Annually, lenders must report those data to the appropriate 
Federal agencies and make the data available to the public. 
Historically, HMDA has been implemented by Regulation C of the Board of 
Governors of the Federal Reserve System (Board), 12 CFR Part 203.
    The Dodd-Frank Wall Street Reform and Consumer Protection Act 
(Dodd-Frank Act) \1\ amended a number of consumer financial protection 
laws, including HMDA. In addition to various substantive amendments, 
the Dodd-Frank Act transferred rulemaking authority for HMDA to the 
Bureau of Consumer Financial Protection (Bureau), effective July 21, 
2011. See sections 1061 and 1094 of the Dodd-Frank Act. Pursuant to the 
Dodd-Frank Act and HMDA, as amended, the Bureau is publishing for 
public comment an interim final rule establishing a new Regulation C 
(Home Mortgage Disclosure), 12 CFR Part 1003, implementing HMDA.
---------------------------------------------------------------------------

    \1\ Pub. L. 111-203,124 Stat. 1376 (2010).
---------------------------------------------------------------------------

II. Summary of the Interim Final Rule

A. General

    The interim final rule substantially duplicates the Board's 
Regulation C as the Bureau's new Regulation C, 12 CFR Part 1003, making 
only certain non-substantive, technical, formatting, and stylistic 
changes. To minimize any potential confusion, the Bureau is preserving 
the past numbering of the Board's Regulation C, other than the new part 
number and the enumeration of the individual definitions in Sec.  
1003.2. While this interim final rule generally incorporates the 
Board's existing regulatory text, appendices (including model forms and 
clauses), and supplements, the rule has been edited as necessary to 
reflect nomenclature and other technical amendments required by the 
Dodd-Frank Act. Notably, this interim final rule does not impose any 
new substantive obligations on regulated entities. In future 
rulemakings, the Bureau expects to amend Regulation C to implement 
certain changes to HMDA made by the Dodd-Frank Act.

B. Specific Changes

    The rule has been changed to effect technical, non-substantive 
changes to the Board's existing regulatory text of Regulation C. 
References to the Board and its administrative structure have been 
replaced with references to the Bureau. Conforming edits have been made 
to internal cross-references and addresses for filing documentation. 
Paragraph lettering for definitions has been removed. Conforming edits 
have been made to reflect the scope of the Bureau's authority pursuant 
to HMDA, as amended by the Dodd-Frank Act. Historical references that 
are no longer applicable, and references to effective

[[Page 78466]]

dates that have passed, have been removed.
    Conforming edits have also been made to reflect new Office of 
Management and Budget (OMB) control numbers issued for information 
collections required by Regulation C. Specifically, Form FR HMDA-LAR, 
the Loan/Application Register Transmittal Sheet, has been edited to add 
OMB control numbers for the Bureau of Consumer Financial Protection and 
the National Credit Union Administration and to remove the control 
number formerly used by the Office of Thrift Supervision.
    This interim final rule modifies the current regulatory text by 
including the Bureau of Consumer Financial Protection as an appropriate 
Federal agency for receiving reports and removes the Office of Thrift 
Supervision as an entity to whom financial institutions may be required 
to report data under HMDA. The Bureau is issuing guidance concurrently 
with the issuance of this interim rule regarding the appropriate 
Federal agency to which each financial institution should report 2011 
data pursuant to HMDA.
    The Dodd-Frank Act amended HMDA to require covered financial 
institutions to report data with respect to, among other things, the 
age of mortgagors and mortgage applicants, points and fees payable at 
origination in connection with a mortgage, the difference between the 
annual percentage rate associated with a loan and a benchmark rates or 
rates for all loans, the term in months of any prepayment penalty or 
other fee or charge payable on repayment of some portion of principal 
or the entire principal in advance of scheduled payment, the value of 
the real property pledged or proposed to be pledged as collateral, the 
actual or proposed term in months of any introductory period after 
which the rates of interest may change for a loan, the presence of 
contractual terms or proposed contract terms that would allow the 
mortgagor or applicant to make payments other than fully amortizing 
payments during any portion of the loan term, the actual or proposed 
term in months of the mortgage, the channel through which the mortgage 
application was made, and the credit score of mortgage applicants and 
mortgagors.\2\ A change to the regulatory text to require collection of 
additional data pursuant to the Dodd-Frank Act is a substantive change 
that is beyond the scope of this interim final rule. Therefore, the 
Bureau will address those substantive amendments to the HMDA data 
elements in a future rulemaking.
---------------------------------------------------------------------------

    \2\ Public Law 111-203, section 1094(3)(A).
---------------------------------------------------------------------------

    Institutions are not required to report additional data required by 
section 304(b)(5) and (6) of HMDA, as amended, ``before the first 
January 1 that occurs after the end of the 9-month period beginning on 
the date on which regulations are issued by the Bureau in final form 
with respect to such disclosures.'' \3\ Further, financial institutions 
are unable to comply with the obligation to report data regarding the 
age of mortgagors and mortgage applicants, which is required pursuant 
to section 304(b)(4) of HMDA, until the Bureau provides the necessary 
guidance on the manner of such reporting, including modification of the 
HMDA Loan/Application Register (HMDA-LAR) form to accommodate the 
reporting of age data. Therefore, the Bureau believes that the 
requirements to report all of the new data elements under HMDA section 
304(b)(4)-(6) cannot be effective until the Bureau completes a future 
rulemaking with respect to the reporting of such data.
---------------------------------------------------------------------------

    \3\ Public Law 111-203, section 1094(3)(F).
---------------------------------------------------------------------------

III. Legal Authority

A. Rulemaking Authority

    The Bureau is issuing this interim final rule pursuant to its 
authority under HMDA and the Dodd-Frank Act. Effective July 21, 2011, 
section 1061 of the Dodd-Frank Act transferred to the Bureau the 
``consumer financial protection functions'' previously vested in 
certain other Federal agencies. The term ``consumer financial 
protection function'' is defined to include ``all authority to 
prescribe rules or issue orders or guidelines pursuant to any Federal 
consumer financial law, including performing appropriate functions to 
promulgate and review such rules, orders, and guidelines.'' \4\ The 
HMDA is a Federal consumer financial law.\5\ Accordingly, effective 
July 21, 2011, the authority of the Board to issue regulations pursuant 
to HMDA transferred to the Bureau.\6\
---------------------------------------------------------------------------

    \4\ Public Law 111-203, section 1061(a)(1). Effective on the 
designated transfer date, July 21, 2011, the Bureau was also granted 
``all powers and duties'' vested in each of the Federal agencies, 
relating to the consumer financial protection functions, on the day 
before the designated transfer date. Until this and other interim 
final rules take effect, existing regulations for which rulemaking 
authority transferred to the Bureau continue to govern persons 
covered by this rule. See 76 FR 43569 (July 21, 2011).
    \5\ Public Law 111-203, section 1002(14) (defining ``Federal 
consumer financial law'' to include the ``enumerated consumer 
laws''); id. section 1002(12) (defining ``enumerated consumer laws'' 
to include HMDA).
    \6\ section 1066 of the Dodd-Frank Act grants the Secretary of 
the Treasury interim authority to perform certain functions of the 
Bureau. Pursuant to that authority, Treasury is publishing this 
interim final rule on behalf of the Bureau.
---------------------------------------------------------------------------

B. Authority To Issue an Interim Final Rule Without Prior Notice and 
Comment

    The Administrative Procedure Act (APA) \7\ generally requires 
public notice and an opportunity to comment before promulgation of 
regulations.\8\ The APA provides exceptions to notice-and-comment 
procedures, however, where an agency for good cause finds that such 
procedures are impracticable, unnecessary, or contrary to the public 
interest or when a rulemaking relates to agency organization, 
procedure, and practice.\9\ The Bureau finds that there is good cause 
to conclude that providing notice and opportunity for comment would be 
unnecessary and contrary to the public interest under these 
circumstances. In addition, substantially all the changes made by this 
interim final rule, which were necessitated by the Dodd-Frank Act's 
transfer of HMDA authority from the Board to the Bureau, relate to 
agency organization, procedure, and practice and are thus exempt from 
the APA's notice-and-comment requirements.
---------------------------------------------------------------------------

    \7\ 5 U.S.C. 551 et seq.
    \8\ 5 U.S.C. 553(b), (c).
    \9\ 5 U.S.C. 553(b)(3)(A), (B).
---------------------------------------------------------------------------

    The Bureau's good cause findings are based on the following 
considerations. As an initial matter, the Board's existing regulation 
was a result of notice-and-comment rulemaking to the extent required. 
Moreover, the interim final rule published today does not impose any 
new, substantive obligations on regulated entities. Rather, the interim 
final rule makes only non-substantive, technical changes to the 
existing text of the regulation, such as renumbering, changing internal 
cross-references, replacing appropriate nomenclature to reflect the 
transfer of authority to the Bureau, and changing the addresses for 
filing applications and notices. Given the technical nature of these 
changes, and the fact that the interim final rule does not impose any 
additional substantive requirements on covered entities, an opportunity 
for prior public comment is unnecessary. In addition, recodifying the 
Board's regulations to reflect the transfer of authority to the Bureau 
will help facilitate compliance with HMDA and its implementing 
regulations, and the new regulations will help reduce uncertainty 
regarding the applicable regulatory framework. Using notice-and-comment 
procedures would delay this process and thus be contrary to the public 
interest.
    The APA generally requires that rules be published not less than 30 
days

[[Page 78467]]

before their effective dates. See 5 U.S.C. 553(d). As with the notice 
and comment requirement, however, the APA allows an exception when 
``otherwise provided by the agency for good cause found and published 
with the rule.'' 5 U.S.C. 553(d)(3). The Bureau finds that there is 
good cause for providing less than 30 days notice here. A delayed 
effective date would harm consumers and regulated entities by 
needlessly perpetuating discrepancies between the amended statutory 
text and the implementing regulation, thereby hindering compliance and 
prolonging uncertainty regarding the applicable regulatory 
framework.\10\
---------------------------------------------------------------------------

    \10\ This interim final rule is one of 14 companion rulemakings 
that together restate and recodify the implementing regulations 
under 14 existing consumer financial laws (part III.C, below, lists 
the 14 laws involved). In the interest of proper coordination of 
this overall regulatory framework, which includes numerous cross-
references among some of the regulations, the Bureau is establishing 
the same effective date of December 30, 2011 for those rules 
published on or before that date and making those published 
thereafter (if any) effective immediately.
---------------------------------------------------------------------------

    In addition, delaying the effective date of the interim final rule 
for 30 days would provide no practical benefit to regulated entities in 
this context and in fact could operate to their detriment. As discussed 
above, the interim final rule published today does not impose any new, 
substantive obligations on regulated entities. Instead, the rule makes 
only non-substantive, technical changes to the existing text of the 
regulation. Thus, regulated entities that are already in compliance 
with the existing rules will not need to modify business practices as a 
result of this rule. To the extent that one-time modifications to forms 
are required, the Bureau has provided an ample implementation period to 
allow appropriate advance notice and facilitate compliance without 
suspending the benefits of the interim final rule during the 
intervening period.

C. Section 1022(b)(2) of the Dodd-Frank Act

    In developing the interim final rule, the Bureau has conducted an 
analysis of potential benefits, costs, and impacts.\11\ The Bureau 
believes that the interim final rule will benefit consumers and covered 
persons by updating and recodifying Regulation C to reflect the 
transfer of authority to the Bureau and certain other changes mandated 
by the Dodd-Frank Act. This will help facilitate compliance with HMDA 
and its implementing regulations and help reduce any uncertainty 
regarding the applicable regulatory framework. The interim final rule 
will not impose any new substantive obligations on consumers or covered 
persons and is not expected to have any impact on consumers' access to 
consumer financial products and services.
---------------------------------------------------------------------------

    \11\ Section 1022(b)(2)(A) of the Dodd-Frank Act addresses the 
consideration of the potential benefits and costs of regulation to 
consumers and covered persons, including the potential reduction of 
access by consumers to consumer financial products or services; the 
impact on depository institutions and credit unions with $10 billion 
or less in total assets as described in section 1026 of the Dodd-
Frank Act; and the impact on consumers in rural areas. Section 
1022(b)(2)(B) requires that the Bureau ``consult with the 
appropriate prudential regulators or other Federal agencies prior to 
proposing a rule and during the comment process regarding 
consistency with prudential, market, or systemic objectives 
administered by such agencies.'' The manner and extent to which 
these provisions apply to interim final rules and to benefits, 
costs, and impacts that are compelled by statutory changes rather 
than discretionary Bureau action is unclear. Nevertheless, to inform 
this rulemaking more fully, the Bureau performed the described 
analyses and consultations.
---------------------------------------------------------------------------

    Although not required by the interim final rule, financial 
institutions may incur some costs in updating compliance manuals and 
related materials to reflect the new numbering and other technical 
changes reflected in the new Regulation C. The Bureau has worked to 
reduce any such burden by preserving the existing numbering to the 
extent possible and believes that such costs will likely be minimal. 
These changes could be handled in the short term by providing a short, 
standalone summary alerting users to the changes and in the long term 
could be combined with other updates at the creditor's convenience. The 
Bureau intends to continue investigating the possible costs to affected 
entities of updating manuals and related materials to reflect these 
changes and solicits comments on this and other issues discussed in 
this section.
    The interim final rule will have no unique impact on depository 
institutions or credit unions with $10 billion or less in assets as 
described in section 1026(a) of the Dodd-Frank Act. Also, the interim 
final rule will have no unique impact on rural consumers.
    In undertaking the process of recodifying Regulation C, as well as 
regulations implementing thirteen other existing consumer financial 
laws,\12\ the Bureau consulted the Federal Deposit Insurance 
Corporation, the Office of the Comptroller of the Currency, the 
National Credit Union Administration, the Board of Governors of the 
Federal Reserve System, the Federal Trade Commission, and the 
Department of Housing and Urban Development, including with respect to 
consistency with any prudential, market, or systemic objectives that 
may be administered by such agencies.\13\ The Bureau also has consulted 
with the Office of Management and Budget for technical assistance. The 
Bureau expects to have further consultations with the appropriate 
Federal agencies during the comment period.
---------------------------------------------------------------------------

    \12\ The fourteen laws implemented by this and its companion 
rulemakings are: the Consumer Leasing Act, the Electronic Fund 
Transfer Act (except with respect to section 920 of that Act), the 
Equal Credit Opportunity Act, the Fair Credit Reporting Act (except 
with respect to sections 615(e) and 628 of that act), the Fair Debt 
Collection Practices Act, Subsections (b) through (f) of section 43 
of the Federal Deposit Insurance Act, sections 502 through 509 of 
the Gramm-Leach-Bliley Act (except for section 505 as it applies to 
section 501(b)), the Home Mortgage Disclosure Act, the Real Estate 
Settlement Procedures Act, the S.A.F.E. Mortgage Licensing Act, the 
Truth in Lending Act, the Truth in Savings Act, section 626 of the 
Omnibus Appropriations Act, 2009, and the Interstate Land Sales Full 
Disclosure Act.
    \13\ In light of the technical but voluminous nature of this 
recodification project, the Bureau focused the consultation process 
on a representative sample of the recodified regulations, while 
making information on the other regulations available. The Bureau 
expects to conduct differently its future consultations regarding 
substantive rulemakings.
---------------------------------------------------------------------------

IV. Request for Comment

    Although notice and comment rulemaking procedures are not required, 
the Bureau invites comments on this notice. Commenters are specifically 
encouraged to identify any technical issues raised by the rule. The 
Bureau is also seeking comment in response to a notice published at 76 
FR 75825 (Dec. 5, 2011) concerning its efforts to identify priorities 
for streamlining regulations that it has inherited from other Federal 
agencies to address provisions that are outdated, unduly burdensome, or 
unnecessary.

V. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996, requires each 
agency to consider the potential impact of its regulations on small 
entities including small businesses, small governmental units, and 
small not-for-profit organizations.\14\ The RFA generally requires an 
agency to conduct an initial regulatory flexibility analysis (IRFA) and 
a final regulatory flexibility analysis (FRFA) of any rule subject to 
notice-and-comment rulemaking requirements, unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities.\15\ The Bureau also is subject to 
certain additional procedures under the RFA involving the convening of 
a panel to consult with small business

[[Page 78468]]

representatives regarding any rule for which an IRFA is required.\16\
---------------------------------------------------------------------------

    \14\ 5 U.S.C. 601 et seq.
    \15\ 5 U.S.C. 603; 5 U.S.C. 604; 5 U.S.C. 605(b).
    \16\ 5 U.S.C. 603(d).
---------------------------------------------------------------------------

    The IRFA and FRFA requirements described above apply only where a 
notice of proposed rulemaking is required,\17\ and the panel 
requirement applies only when a rulemaking requires an IRFA.\18\ As 
discussed above in Part III, a notice of proposed rulemaking is not 
required for this rulemaking.
---------------------------------------------------------------------------

    \17\ 5 U.S.C. 603(a), 604(a); 5 U.S.C. 553(b)(B).
    \18\ 5 U.S.C. 609(b).
---------------------------------------------------------------------------

    In addition, as discussed above, this interim final rule has only a 
minor impact on entities subject to Regulation C. The rule imposes no 
new, substantive obligations on covered entities. Accordingly, the 
undersigned certifies that this interim final rule will not have a 
significant economic impact on a substantial number of small entities.

VI. Paperwork Reduction Act

    The Bureau may not conduct or sponsor, and a respondent is not 
required to respond to, an information collection unless it displays a 
currently valid Office of Management and Budget (OMB) control number. 
This rule contains information collection requirements under the 
Paperwork Reduction Act (PRA), which have been previously approved by 
OMB, and the ongoing PRA burden for which is unchanged by this rule. 
There are no new information collection requirements in this interim 
final rule. The Bureau's OMB control number for this information 
collection is: 3170-0008.

List of Subjects in 12 CFR Part 1003

    Banks, Banking, Credit unions, Mortgages, National banks, Savings 
associations, Reporting and recordkeeping requirements.

Authority and Issuance

    For the reasons set forth above, the Bureau of Consumer Financial 
Protection adds Part 1003 to Chapter X in Title 12 of the Code of 
Federal Regulations to read as follows:

PART 1003--HOME MORTGAGE DISCLOSURE (REGULATION C)

Sec.
1003.1 Authority, purpose, and scope.
1003.2 Definitions.
1003.3 Exempt institutions.
1003.4 Compilation of loan data.
1003.5 Disclosure and reporting.
1003.6 Enforcement.
Appendix A to Part 1003--Form and Instructions for Completion of 
HMDA Loan/Application Register
Appendix B to Part 1003--Form and Instructions for Data Collection 
on Ethnicity, Race, and Sex
Supplement I to Part 1003--Staff Commentary

    Authority:  12 U.S.C. 2803, 2804, 2805, 5512, 5581.


Sec.  1003.1  Authority, purpose, and scope.

    (a) Authority. This part, known as Regulation C, is issued by the 
Bureau of Consumer Financial Protection (Bureau) pursuant to the Home 
Mortgage Disclosure Act (HMDA) (12 U.S.C. 2801 et seq.), as amended. 
The information-collection requirements have been approved by the U.S. 
Office of Management and Budget (OMB) under 44 U.S.C. 3501 et seq. and 
have been assigned OMB numbers for institutions reporting data to the 
Office of the Comptroller of the Currency (1557-0159), the Federal 
Deposit Insurance Corporation (3064-0046), the Federal Reserve System 
(7100-0247), the Department of Housing and Urban Development (HUD) 
(2502-0529), the National Credit Union Administration (3133-0166), and 
the Bureau of Consumer Financial Protection (3170-0008).
    (b) Purpose. (1) This part implements the Home Mortgage Disclosure 
Act, which is intended to provide the public with loan data that can be 
used:
    (i) To help determine whether financial institutions are serving 
the housing needs of their communities;
    (ii) To assist public officials in distributing public-sector 
investment so as to attract private investment to areas where it is 
needed; and
    (iii) To assist in identifying possible discriminatory lending 
patterns and enforcing antidiscrimination statutes.
    (2) Neither the act nor this part is intended to encourage unsound 
lending practices or the allocation of credit.
    (c) Scope. This part applies to certain financial institutions, 
including banks, savings associations, credit unions, and other 
mortgage lending institutions, as defined in Sec.  1003.2. The 
regulation requires an institution to report data to the appropriate 
Federal agency about home purchase loans, home improvement loans, and 
refinancings that it originates or purchases, or for which it receives 
applications; and to disclose certain data to the public.


Sec.  1003.2  Definitions.

    In this part:
    Act means the Home Mortgage Disclosure Act (HMDA) (12 U.S.C. 2801 
et seq.), as amended.
    Application.--(1) In general. Application means an oral or written 
request for a home purchase loan, a home improvement loan, or a 
refinancing that is made in accordance with procedures used by a 
financial institution for the type of credit requested.
    (2) Preapproval programs. A request for preapproval for a home 
purchase loan is an application under this section if the request is 
reviewed under a program in which the financial institution, after a 
comprehensive analysis of the creditworthiness of the applicant, issues 
a written commitment to the applicant valid for a designated period of 
time to extend a home purchase loan up to a specified amount. The 
written commitment may not be subject to conditions other than:
    (i) Conditions that require the identification of a suitable 
property;
    (ii) Conditions that require that no material change has occurred 
in the applicant's financial condition or creditworthiness prior to 
closing; and
    (iii) Limited conditions that are not related to the financial 
condition or creditworthiness of the applicant that the lender 
ordinarily attaches to a traditional home mortgage application (such as 
certification of a clear termite inspection).
    Branch office means:
    (1) Any office of a bank, savings association, or credit union that 
is approved as a branch by a Federal or state supervisory agency, but 
excludes free-standing electronic terminals such as automated teller 
machines; and
    (2) Any office of a for-profit mortgage-lending institution (other 
than a bank, savings association, or credit union) that takes 
applications from the public for home purchase loans, home improvement 
loans, or refinancings. A for-profit mortgage-lending institution is 
also deemed to have a branch office in an MSA or in a Metropolitan 
Division, if, in the preceding calendar year, it received applications 
for, originated, or purchased five or more home purchase loans, home 
improvement loans, or refinancings related to property located in that 
MSA or Metropolitan Division, respectively.
    Dwelling means a residential structure (whether or not attached to 
real property) located in a state of the United States of America, the 
District of Columbia, or the Commonwealth of Puerto Rico. The term 
includes an individual condominium unit, cooperative unit, or mobile or 
manufactured home.
    Financial institution means:
    (1) A bank, savings association, or credit union that:
    (i) On the preceding December 31 had assets in excess of the asset 
threshold established and published annually by

[[Page 78469]]

the Bureau for coverage by the act, based on the year-to-year change in 
the average of the Consumer Price Index for Urban Wage Earners and 
Clerical Workers, not seasonally adjusted, for each twelve month period 
ending in November, with rounding to the nearest million;
    (ii) On the preceding December 31, had a home or branch office in 
an MSA;
    (iii) In the preceding calendar year, originated at least one home 
purchase loan (excluding temporary financing such as a construction 
loan) or refinancing of a home purchase loan, secured by a first lien 
on a one-to four-family dwelling; and
    (iv) Meets one or more of the following three criteria:
    (A) The institution is Federally insured or regulated;
    (B) The mortgage loan referred to in paragraph (1)(iii) of this 
definition was insured, guaranteed, or supplemented by a Federal 
agency; or
    (C) The mortgage loan referred to in paragraph (1)(iii) of this 
definition was intended by the institution for sale to Fannie Mae or 
Freddie Mac; and
    (2) A for-profit mortgage-lending institution (other than a bank, 
savings association, or credit union) that:
    (i) In the preceding calendar year, either:
    (A) Originated home purchase loans, including refinancings of home 
purchase loans, that equaled at least 10 percent of its loan-
origination volume, measured in dollars; or
    (B) Originated home purchase loans, including refinancings of home 
purchase loans, that equaled at least $25 million; and
    (ii) On the preceding December 31, had a home or branch office in 
an MSA; and
    (iii) Either:
    (A) On the preceding December 31, had total assets of more than $10 
million, counting the assets of any parent corporation; or
    (B) In the preceding calendar year, originated at least 100 home 
purchase loans, including refinancings of home purchase loans.
    Home-equity line of credit means an open-end credit plan secured by 
a dwelling as defined in Regulation Z (Truth in Lending), 12 CFR part 
1026.
    Home improvement loan means:
    (1) A loan secured by a lien on a dwelling that is for the purpose, 
in whole or in part, of repairing, rehabilitating, remodeling, or 
improving a dwelling or the real property on which it is located; and
    (2) A non-dwelling secured loan that is for the purpose, in whole 
or in part, of repairing, rehabilitating, remodeling, or improving a 
dwelling or the real property on which it is located, and that is 
classified by the financial institution as a home improvement loan.
    Home purchase loan means a loan secured by and made for the purpose 
of purchasing a dwelling.
    Manufactured home means any residential structure as defined under 
regulations of the Department of Housing and Urban Development 
establishing manufactured home construction and safety standards (24 
CFR 3280.2).
    Metropolitan Statistical Area or MSA and Metropolitan Division or 
MD. (1) Metropolitan Statistical Area or MSA means a metropolitan 
statistical area as defined by the U.S. Office of Management and 
Budget.
    (2) Metropolitan Division or MD means a metropolitan division of an 
MSA, as defined by the U.S. Office of Management and Budget.
    Refinancing means a new obligation that satisfies and replaces an 
existing obligation by the same borrower, in which:
    (1) For coverage purposes, the existing obligation is a home 
purchase loan (as determined by the lender, for example, by reference 
to available documents; or as stated by the applicant), and both the 
existing obligation and the new obligation are secured by first liens 
on dwellings; and
    (2) For reporting purposes, both the existing obligation and the 
new obligation are secured by liens on dwellings.


Sec.  1003.3  Exempt institutions.

    (a) Exemption based on state law. (1) A state-chartered or state-
licensed financial institution is exempt from the requirements of this 
part if the Bureau determines that the institution is subject to a 
state disclosure law that contains requirements substantially similar 
to those imposed by this part and that contains adequate provisions for 
enforcement.
    (2) Any state, state-chartered or state-licensed financial 
institution, or association of such institutions, may apply to the 
Bureau for an exemption under paragraph (a) of this section.
    (3) An institution that is exempt under paragraph (a) of this 
section shall use the disclosure form required by its state law and 
shall submit the data required by that law to its state supervisory 
agency for purposes of aggregation.
    (b) Loss of exemption. An institution losing a state-law exemption 
under paragraph (a) of this section shall comply with this part 
beginning with the calendar year following the year for which it last 
reported loan data under the state disclosure law.


Sec.  1003.4  Compilation of loan data.

    (a) Data format and itemization. A financial institution shall 
collect data regarding applications for, and originations and purchases 
of, home purchase loans, home improvement loans, and refinancings for 
each calendar year. An institution is required to collect data 
regarding requests under a preapproval program (as defined in Sec.  
1003.2) only if the preapproval request is denied or results in the 
origination of a home purchase loan. All reportable transactions shall 
be recorded, within thirty calendar days after the end of the calendar 
quarter in which final action is taken (such as origination or purchase 
of a loan, or denial or withdrawal of an application), on a register in 
the format prescribed in Appendix A of this part. The data recorded 
shall include the following items:
    (1) An identifying number for the loan or loan application, and the 
date the application was received.
    (2) The type of loan or application.
    (3) The purpose of the loan or application.
    (4) Whether the application is a request for preapproval and 
whether it resulted in a denial or in an origination.
    (5) The property type to which the loan or application relates.
    (6) The owner-occupancy status of the property to which the loan or 
application relates.
    (7) The amount of the loan or the amount applied for.
    (8) The type of action taken, and the date.
    (9) The location of the property to which the loan or application 
relates, by MSA or by Metropolitan Division, by state, by county, and 
by census tract, if the institution has a home or branch office in that 
MSA or Metropolitan Division.
    (10) The ethnicity, race, and sex of the applicant or borrower, and 
the gross annual income relied on in processing the application.
    (11) The type of entity purchasing a loan that the institution 
originates or purchases and then sells within the same calendar year 
(this information need not be included in quarterly updates).
    (12)(i) For originated loans subject to Regulation Z, 12 CFR part 
1026, the difference between the loan's annual percentage rate (APR) 
and the average prime offer rate for a comparable transaction as of the 
date the interest rate is set, if that difference is equal to or 
greater than 1.5 percentage points for loans secured by a first lien on 
a

[[Page 78470]]

dwelling, or equal to or greater than 3.5 percentage points for loans 
secured by a subordinate lien on a dwelling.
    (ii) ``Average prime offer rate'' means an annual percentage rate 
that is derived from average interest rates, points, and other loan 
pricing terms currently offered to consumers by a representative sample 
of creditors for mortgage loans that have low-risk pricing 
characteristics. The Bureau publishes average prime offer rates for a 
broad range of types of transactions in tables updated at least weekly, 
as well as the methodology the Bureau uses to derive these rates.
    (13) Whether the loan is subject to the Home Ownership and Equity 
Protection Act of 1994, as implemented in Regulation Z (12 CFR 
1026.32).
    (14) The lien status of the loan or application (first lien, 
subordinate lien, or not secured by a lien on a dwelling).
    (b) Collection of data on ethnicity, race, sex, and income. (1) A 
financial institution shall collect data about the ethnicity, race, and 
sex of the applicant or borrower as prescribed in Appendix B of this 
part.
    (2) Ethnicity, race, sex, and income data may but need not be 
collected for loans purchased by the financial institution.
    (c) Optional data. A financial institution may report:
    (1) The reasons it denied a loan application;
    (2) Requests for preapproval that are approved by the institution 
but not accepted by the applicant; and
    (3) Home-equity lines of credit made in whole or in part for the 
purpose of home improvement or home purchase.
    (d) Excluded data. A financial institution shall not report:
    (1) Loans originated or purchased by the financial institution 
acting in a fiduciary capacity (such as trustee);
    (2) Loans on unimproved land;
    (3) Temporary financing (such as bridge or construction loans);
    (4) The purchase of an interest in a pool of loans (such as 
mortgage-participation certificates, mortgage-backed securities, or 
real estate mortgage investment conduits);
    (5) The purchase solely of the right to service loans; or
    (6) Loans acquired as part of a merger or acquisition, or as part 
of the acquisition of all of the assets and liabilities of a branch 
office as defined in Sec.  1003.2.
    (e) Data reporting for banks and savings associations that are 
required to report data on small business, small farm, and community 
development lending under CRA. Banks and savings associations that are 
required to report data on small business, small farm, and community 
development lending under regulations that implement the Community 
Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.) shall also collect 
the location of property located outside MSAs and Metropolitan 
Divisions in which the institution has a home or branch office, or 
outside any MSA.


Sec.  1003.5  Disclosure and reporting.

    (a) Reporting to agency. (1) By March 1 following the calendar year 
for which the loan data are compiled, a financial institution shall 
send its complete loan/application register to the agency office 
specified in Appendix A of this part. The institution shall retain a 
copy for its records for at least three years.
    (2) A subsidiary of a bank or savings association shall complete a 
separate loan/application register. The subsidiary shall submit the 
register, directly or through its parent, to the same agency as its 
parent.
    (b) Public disclosure of statement. (1) The Federal Financial 
Institutions Examination Council (FFIEC) will prepare a disclosure 
statement from the data each financial institution submits.
    (2) An institution shall make its disclosure statement (prepared by 
the FFIEC) available to the public at the institution's home office no 
later than three business days after receiving the disclosure statement 
from the FFIEC.
    (3) In addition, an institution shall either:
    (i) Make its disclosure statement available to the public, within 
ten business days of receiving it, in at least one branch office in 
each other MSA and each other Metropolitan Division where the 
institution has offices (the disclosure statement need only contain 
data relating to the MSA or Metropolitan Division where the branch is 
located); or
    (ii) Post the address for sending written requests in the lobby of 
each branch office in other MSAs and Metropolitan Divisions where the 
institution has offices; and mail or deliver a copy of the disclosure 
statement within fifteen calendar days of receiving a written request 
(the disclosure statement need only contain data relating to the MSA or 
Metropolitan Division for which the request is made). Including the 
address in the general notice required under paragraph (e) of this 
section satisfies this requirement.
    (c) Public disclosure of modified loan/application register. A 
financial institution shall make its loan/application register 
available to the public after removing the following information 
regarding each entry: The application or loan number, the date that the 
application was received, and the date action was taken. An institution 
shall make its modified register available following the calendar year 
for which the data are compiled, by March 31 for a request received on 
or before March 1, and within thirty calendar days for a request 
received after March 1. The modified register need only contain data 
relating to the MSA or Metropolitan Division for which the request is 
made.
    (d) Availability of data. A financial institution shall make its 
modified register available to the public for a period of three years 
and its disclosure statement available for a period of five years. An 
institution shall make the data available for inspection and copying 
during the hours the office is normally open to the public for 
business. It may impose a reasonable fee for any cost incurred in 
providing or reproducing the data.
    (e) Notice of availability. A financial institution shall post a 
general notice about the availability of its HMDA data in the lobby of 
its home office and of each branch office located in an MSA and 
Metropolitan Division. An institution shall provide promptly upon 
request the location of the institution's offices where the statement 
is available for inspection and copying, or it may include the location 
in the lobby notice.
    (f) Loan aggregation and central data depositories. Using the loan 
data submitted by financial institutions, the FFIEC will produce 
reports for individual institutions and reports of aggregate data for 
each MSA and Metropolitan Division, showing lending patterns by 
property location, age of housing stock, and income level, sex, 
ethnicity, and race. These reports will be available to the public at 
central data depositories located in each MSA and Metropolitan 
Division. A listing of central data depositories can be obtained from 
the Federal Financial Institutions Examination Council, Washington, DC 
20006.


Sec.  1003.6  Enforcement.

    (a) Administrative enforcement. A violation of the Act or this part 
is subject to administrative sanctions as provided in section 305 of 
the Act, including the imposition of civil money penalties, where 
applicable. Compliance is enforced by the agencies listed in section 
305 of the Act (12 U.S.C. 2804).
    (b) Bona fide errors. (1) An error in compiling or recording loan 
data is not a violation of the act or this part if the error was 
unintentional and occurred despite the maintenance of procedures 
reasonably adapted to avoid such errors.

[[Page 78471]]

    (2) An incorrect entry for a census tract number is deemed a bona 
fide error, and is not a violation of the act or this part, provided 
that the institution maintains procedures reasonably adapted to avoid 
such errors.
    (3) If an institution makes a good-faith effort to record all data 
concerning covered transactions fully and accurately within thirty 
calendar days after the end of each calendar quarter, and some data are 
nevertheless inaccurate or incomplete, the error or omission is not a 
violation of the act or this part provided that the institution 
corrects or completes the information prior to submitting the loan/
application register to its regulatory agency.

Appendix A to Part 1003--Form and Instructions for Completion of HMDA 
Loan/Application Register

Paperwork Reduction Act Notice

    This report is required by law (12 U.S.C. 2801-2810 and 12 CFR 
1003). An agency may not conduct or sponsor, and an organization is 
not required to respond to, a collection of information unless it 
displays a valid Office of Management and Budget (OMB) Control 
Number. See 12 CFR 1003.1(a) for the valid OMB Control Numbers 
applicable to this information collection. Send comments regarding 
this burden estimate or any other aspect of this collection of 
information, including suggestions for reducing the burden, to the 
respective agencies and to OMB, Office of Information and Regulatory 
Affairs, Paperwork Reduction Project, Washington, DC 20503. Be sure 
to reference the applicable agency and the OMB Control Number, as 
found in 12 CFR 1003.1(a), when submitting comments to OMB.

I. Instructions for Completion of Loan/Application Register

A. Application or Loan Information

    1. Application or Loan Number. Enter an identifying loan number 
that can be used later to retrieve the loan or application file. It 
can be any number of your institution's choosing (not exceeding 25 
characters). You may use letters, numerals, or a combination of 
both.
    2. Date Application Received. Enter the date the loan 
application was received by your institution by month, day, and 
year. If your institution normally records the date shown on the 
application form you may use that date instead. Enter ``NA'' for 
loans purchased by your institution. For paper submissions only, use 
numerals in the form MM/DD/YYYY (for example, 01/15/2003). For 
submissions in electronic form, the proper format is YYYYMMDD.
    3. Type of Loan or Application. Indicate the type of loan or 
application by entering the applicable Code from the following:

Code 1--Conventional (any loan other than FHA, VA, FSA, or RHS 
loans)
Code 2--FHA-insured (Federal Housing Administration)
Code 3--VA-guaranteed (Veterans Administration)
Code 4--FSA/RHS-guaranteed (Farm Service Agency or Rural Housing 
Service)

    4. Property Type. Indicate the property type by entering the 
applicable Code from the following:

Code 1--One-to four-family dwelling (other than manufactured 
housing)
Code 2--Manufactured housing
Code 3--Multifamily dwelling

    a. Use Code 1, not Code 3, for loans on individual condominium 
or cooperative units.
    b. If you cannot determine (despite reasonable efforts to find 
out) whether the loan or application relates to a manufactured home, 
use Code 1.
    5. Purpose of Loan or Application. Indicate the purpose of the 
loan or application by entering the applicable Code from the 
following:

Code 1--Home purchase
Code 2--Home improvement
Code 3--Refinancing

    a. Do not report a refinancing if, under the loan agreement, you 
were unconditionally obligated to refinance the obligation, or you 
were obligated to refinance the obligation subject to conditions 
within the borrower's control.
    6. Owner Occupancy. Indicate whether the property to which the 
loan or loan application relates is to be owner-occupied as a 
principal residence by entering the applicable Code from the 
following:

Code 1--Owner-occupied as a principal dwelling
Code 2--Not owner-occupied as a principal dwelling
Code 3--Not applicable

    a. For purchased loans, use Code 1 unless the loan documents or 
application indicate that the property will not be owner-occupied as 
a principal residence.
    b. Use Code 2 for second homes or vacation homes, as well as for 
rental properties.
    c. Use Code 3 if the property to which the loan relates is a 
multifamily dwelling; is not located in an MSA; or is located in an 
MSA or an MD in which your institution has neither a home nor a 
branch office. Alternatively, at your institution's option, you may 
report the actual occupancy status, using Code 1 or 2 as applicable.
    7. Loan Amount. Enter the amount of the loan or application. Do 
not report loans below $500. Show the amount in thousands, rounding 
to the nearest thousand (round $500 up to the next $1,000). For 
example, a loan for $167,300 should be entered as 167 and one for 
$15,500 as 16.
    a. For a home purchase loan that you originated, enter the 
principal amount of the loan.
    b. For a home purchase loan that you purchased, enter the unpaid 
principal balance of the loan at the time of purchase.
    c. For a home improvement loan, enter the entire amount of the 
loan--including unpaid finance charges if that is how such loans are 
recorded on your books--even if only a part of the proceeds is 
intended for home improvement.
    d. If you opt to report home-equity lines of credit, report only 
the portion of the line intended for home improvement or home 
purchase.
    e. For a refinancing, indicate the total amount of the 
refinancing, including both the amount outstanding on the original 
loan and any amount of ``new money.''
    f. For a loan application that was denied or withdrawn, enter 
the amount for which the applicant applied.
    8. Request for Preapproval of a Home Purchase Loan. Indicate 
whether the application or loan involved a request for preapproval 
of a home purchase loan by entering the applicable Code from the 
following:

Code 1--Preapproval requested
Code 2--Preapproval not requested
Code 3--Not applicable

    a. Enter Code 2 if your institution has a covered preapproval 
program but the applicant does not request a preapproval.
    b. Enter Code 3 if your institution does not have a preapproval 
program as defined in Sec.  1003.2.
    c. Enter Code 3 for applications or loans for home improvement 
or refinancing, and for purchased loans.

B. Action Taken

    1. Type of Action. Indicate the type of action taken on the 
application or loan by using one of the following Codes.

Code 1--Loan originated
Code 2--Application approved but not accepted
Code 3--Application denied
Code 4--Application withdrawn
Code 5--File closed for incompleteness
Code 6--Loan purchased by your institution
Code 7--Preapproval request denied
Code 8--Preapproval request approved but not accepted (optional 
reporting)

    a. Use Code 1 for a loan that is originated, including one 
resulting from a request for preapproval.
    b. For a counteroffer (your offer to the applicant to make the 
loan on different terms or in a different amount from the terms or 
amount applied for), use Code 1 if the applicant accepts. Use Code 3 
if the applicant turns down the counteroffer or does not respond.
    c. Use Code 2 when the application is approved but the applicant 
(or the loan broker or correspondent) fails to respond to your 
notification of approval or your commitment letter within the 
specified time. Do not use this Code for a preapproval request.
    d. Use Code 4 only when the application is expressly withdrawn 
by the applicant before a credit decision is made. Do not use Code 4 
if a request for preapproval is withdrawn; preapproval requests that 
are withdrawn are not reported under HMDA.
    e. Use Code 5 if you sent a written notice of incompleteness 
under Sec.  1002.9(c)(2) of Regulation B (Equal Credit Opportunity) 
and the applicant did not respond to your request for additional 
information within the period of time specified in your notice. Do 
not use this Code for requests for preapproval that are incomplete; 
these preapproval requests are not reported under HMDA.
    2. Date of Action. For paper submissions only, enter the date by 
month, day, and year,

[[Page 78472]]

using numerals in the form MM/DD/YYYY (for example, 02/22/2003). For 
submissions in electronic form, the proper format is YYYYMMDD.
    a. For loans originated, enter the settlement or closing date.
    b. For loans purchased, enter the date of purchase by your 
institution.
    c. For applications and preapprovals denied, applications and 
preapprovals approved but not accepted by the applicant, and files 
closed for incompleteness, enter the date that the action was taken 
by your institution or the date the notice was sent to the 
applicant.
    d. For applications withdrawn, enter the date you received the 
applicant's express withdrawal, or enter the date shown on the 
notification from the applicant, in the case of a written 
withdrawal.
    e. For preapprovals that lead to a loan origination, enter the 
date of the origination.

C. Property Location

    Except as otherwise provided, enter in these columns the 
applicable Codes for the MSA, or the MD if the MSA is divided into 
MDs, state, county, and census tract to indicate the location of the 
property to which a loan relates.
    1. MSA or Metropolitan Division.--For each loan or loan 
application, enter the MSA, or the MD number if the MSA is divided 
into MDs. MSA and MD boundaries are defined by OMB; use the 
boundaries that were in effect on January 1 of the calendar year for 
which you are reporting. A listing of MSAs and MDs is available from 
the appropriate Federal agency to which you report data or the 
FFIEC.
    2. State and County. Use the Federal Information Processing 
Standard (FIPS) two-digit numerical code for the state and the 
three-digit numerical code for the county. These codes are available 
from the appropriate Federal agency to which you report data or the 
FFIEC.
    3. Census Tract.--Indicate the census tract where the property 
is located. Notwithstanding paragraph 6, if the property is located 
in a county with a population of 30,000 or less in the 2000 Census, 
enter ``NA'' (even if the population has increased above 30,000 
since 2000), or enter the census tract number. County population 
data can be obtained from the U.S. Census Bureau.
    4. Census Tract Number.--For the census tract number, consult 
the resources provided by the U.S. Census Bureau or the FFIEC.
    5. Property Located Outside MSAs or Metropolitan Divisions.--For 
loans on property located outside the MSAs and MDs in which an 
institution has a home or branch office, or for property located 
outside of any MSA or MD, the institution may choose one of the 
following two options. Under option one, the institution may enter 
the MSA or MD, state and county codes and the census tract number; 
and if the property is not located in any MSA or MD, the institution 
may enter ``NA'' in the MSA or MD column. (Codes exist for all 
states and counties and numbers exist for all census tracts.) Under 
this first option, the codes and census tract number must accurately 
identify the property location. Under the second option, which is 
not available if paragraph 6 applies, an institution may enter 
``NA'' in all four columns, whether or not the codes or numbers 
exist for the property location.
    6. Data Reporting for Banks and Savings Associations Required To 
Report Data on Small Business, Small Farm, and Community Development 
Lending Under the CRA Regulations.--If your institution is a bank or 
savings association that is required to report data under the 
regulations that implement the CRA, you must enter the property 
location on your HMDA/LAR even if the property is outside the MSAs 
or MDs in which you have a home or branch office, or is not located 
in any MSA.
    7. Requests for Preapproval. Notwithstanding paragraphs 1 
through 6, if the application is a request for preapproval that is 
denied or that is approved but not accepted by the applicant, you 
may enter ``NA'' in all four columns.

D. Applicant Information--Ethnicity, Race, Sex, and Income

    Appendix B contains instructions for the collection of data on 
ethnicity, race, and sex, and also contains a sample form for data 
collection.
    1. Applicability. Report this information for loans that you 
originate as well as for applications that do not result in an 
origination.
    a. You need not collect or report this information for loans 
purchased. If you choose not to report this information, use the 
Codes for ``not applicable.''
    b. If the borrower or applicant is not a natural person (a 
corporation or partnership, for example), use the Codes for ``not 
applicable.''
    2. Mail, Internet, or Telephone Applications.--All loan 
applications, including applications taken by mail, internet, or 
telephone must use a collection form similar to that shown in 
Appendix B regarding ethnicity, race, and sex. For applications 
taken by telephone, the information in the collection form must be 
stated orally by the lender, except for information that pertains 
uniquely to applications taken in writing. If the applicant does not 
provide these data in an application taken by mail or telephone or 
on the internet, enter the Code for ``information not provided by 
applicant in mail, internet, or telephone application'' specified in 
paragraphs I.D.3., 4., and 5. of this appendix. (See Appendix B for 
complete information on the collection of these data in mail, 
Internet, or telephone applications.)
    3. Ethnicity of Borrower or Applicant. Use the following Codes 
to indicate the ethnicity of the applicant or borrower under column 
``A'' and of any co-applicant or co-borrower under column ``CA.''

Code 1--Hispanic or Latino
Code 2--Not Hispanic or Latino
Code 3--Information not provided by applicant in mail, internet, or 
telephone application
Code 4--Not applicable
Code 5--No co-applicant

    4. Race of Borrower or Applicant. Use the following Codes to 
indicate the race of the applicant or borrower under column ``A'' 
and of any co-applicant or co-borrower under column ``CA.''

Code 1--American Indian or Alaska Native
Code 2--Asian
Code 3--Black or African American
Code 4--Native Hawaiian or Other Pacific Islander
Code 5--White
Code 6--Information not provided by applicant in mail, internet, or 
telephone application
Code 7--Not applicable
Code 8--No co-applicant

    a. If an applicant selects more than one racial designation, 
enter all Codes corresponding to the applicant's selections.
    b. Use Code 4 (for ethnicity) and Code 7 (for race) for ``not 
applicable'' only when the applicant or co-applicant is not a 
natural person or when applicant or co-applicant information is 
unavailable because the loan has been purchased by your institution.
    c. If there is more than one co-applicant, provide the required 
information only for the first co-applicant listed on the 
application form. If there are no co-applicants or co-borrowers, use 
Code 5 (for ethnicity) and Code 8 (for race) for ``no co-applicant'' 
in the co-applicant column.
    5. Sex of Borrower or Applicant. Use the following Codes to 
indicate the sex of the applicant or borrower under column ``A'' and 
of any co-applicant or co-borrower under column ``CA.''

Code 1--Male
Code 2--Female
Code 3--Information not provided by applicant in mail, internet, or 
telephone application
Code 4--Not applicable
Code 5--No co-applicant or co-borrower

    a. Use Code 4 for ``not applicable'' only when the applicant or 
co-applicant is not a natural person or when applicant or co-
applicant information is unavailable because the loan has been 
purchased by your institution.
    b. If there is more than one co-applicant, provide the required 
information only for the first co-applicant listed on the 
application form. If there are no co-applicants or co-borrowers, use 
Code 5 for ``no co-applicant'' in the co-applicant column.
    6. Income. Enter the gross annual income that your institution 
relied on in making the credit decision.
    a. Round all dollar amounts to the nearest thousand (round $500 
up to the next $1,000), and show in thousands. For example, report 
$35,500 as 36.
    b. For loans on multifamily dwellings, enter ``NA.''
    c. If no income information is asked for or relied on in the 
credit decision, enter ``NA.''
    d. If the applicant or co-applicant is not a natural person or 
the applicant or co-applicant information is unavailable because the 
loan has been purchased by your institution, enter ``NA.''

E. Type of Purchaser

    Enter the applicable Code to indicate whether a loan that your 
institution originated or purchased was then sold to a secondary 
market entity within the same calendar year:


[[Page 78473]]


Code 0--Loan was not originated or was not sold in calendar year 
covered by register
Code 1--Fannie Mae
Code 2--Ginnie Mae
Code 3--Freddie Mac
Code 4--Farmer Mac
Code 5--Private securitization
Code 6--Commercial bank, savings bank, or savings association
Code 7--Life insurance company, credit union, mortgage bank, or 
finance company
Code 8--Affiliate institution
Code 9--Other type of purchaser

    a. Use Code 0 for applications that were denied, withdrawn, or 
approved but not accepted by the applicant; and for files closed for 
incompleteness.
    b. Use Code 0 if you originated or purchased a loan and did not 
sell it during that same calendar year. If you sell the loan in a 
succeeding year, you need not report the sale.
    c. Use Code 2 if you conditionally assign a loan to Ginnie Mae 
in connection with a mortgage-backed security transaction.
    d. Use Code 8 for loans sold to an institution affiliated with 
you, such as your subsidiary or a subsidiary of your parent 
corporation.

F. Reasons for Denial

    1. You may report the reason for denial, and you may indicate up 
to three reasons, using the following Codes. Leave this column blank 
if the ``action taken'' on the application is not a denial. For 
example, do not complete this column if the application was 
withdrawn or the file was closed for incompleteness.

Code 1--Debt-to-income ratio
Code 2--Employment history
Code 3--Credit history
Code 4--Collateral
Code 5--Insufficient cash (downpayment, closing costs)
Code 6--Unverifiable information
Code 7--Credit application incomplete
Code 8--Mortgage insurance denied
Code 9--Other

    2. If your institution uses the model form for a