Truth in Lending (Regulation Z): Adjustment to Asset-Size Exemption Threshold, 79286-79287 [2013-31225]

Download as PDF 79286 Federal Register / Vol. 78, No. 250 / Monday, December 30, 2013 / Rules and Regulations For these reasons, the Bureau has determined that publishing a notice of proposed rulemaking and providing opportunity for public comment are unnecessary and 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 for (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 U.S.C. 553(d). 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, 2014. The amendment in this notice is technical and non-discretionary, and it applies the method previously established in the agency’s regulations for determining adjustments to the threshold. 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. 5 U.S.C. 603(a), 604(a). 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 in the preamble, the Bureau of Consumer Financial Protection amends 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. In Supplement I to part 1003, under Section 1003.2—Definitions, under the definition ‘‘Financial institution’’, paragraph 2 is revised to read as follows: wreier-aviles on DSK5TPTVN1PROD with RULES ■ Supplement I to Part 1003—Staff Commentary * * * * * Section 1003.2—Definitions * * * * * Financial institution. * * * * * 2. Adjustment of exemption threshold for banks, savings associations, and credit VerDate Mar<15>2010 15:10 Dec 27, 2013 Jkt 232001 unions. For data collection in 2014, the assetsize exemption threshold is $43 million. Banks, savings associations, and credit unions with assets at or below $43 million as of December 31, 2013, are exempt from collecting data for 2014. * * * * * Dated: December 24, 2013. Richard Cordray, Director, Bureau of Consumer Financial Protection. [FR Doc. 2013–31223 Filed 12–26–13; 11:15 am] BILLING CODE 4810–AM–P BUREAU OF CONSUMER FINANCIAL PROTECTION 12 CFR Part 1026 Truth in Lending (Regulation Z): Adjustment to Asset-Size Exemption Threshold Bureau of Consumer Financial Protection. ACTION: Final rule; official commentary. AGENCY: The Bureau is amending the official commentary that interprets the requirements of the Bureau’s Regulation Z (Truth in Lending) to reflect a change in the asset size threshold for certain creditors to qualify for an exemption to the requirement to establish an escrow account for a higher-priced mortgage loan based on the annual percentage change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI–W) for the 12month period ending in November. The exemption threshold is adjusted to increase to $2.028 billion from $2 billion. The adjustment is based on the 1.4 percent increase in the average of the CPI–W for the 12-month period ending in November 2013. Therefore, creditors with assets of $2.028 billion or less as of December 31, 2013, are exempt, if other requirements of Regulation Z also are met, from establishing escrow accounts for higherpriced mortgage loans in 2014. DATES: This final rule is effective January 1, 2014. FOR FURTHER INFORMATION CONTACT: David Friend, Counsel, Office of Regulations, Consumer Financial Protection Bureau, 1700 G Street NW., Washington, DC 20552 at (202) 435– 7700. SUPPLEMENTARY INFORMATION: SUMMARY: I. Background The Dodd-Frank Wall Street Reform and Consumer Protection Act (DoddFrank Act) amended TILA section 129D(a) to contain a general requirement that an escrow account be PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 established by a creditor to pay for property taxes and insurance premiums for certain first-lien higher-priced mortgage loan transactions. Section 1461 of the Dodd-Frank Act also generally permits an exemption from the higher-priced mortgage loan escrow requirement for a creditor that: (1) Operates predominantly in rural or underserved areas; (2) together with all affiliates, has total annual mortgage loan originations that do not exceed a limit set by the Bureau; (3) retains its mortgage obligations in portfolio; and (4) meets any asset-size threshold and any other criteria as the Bureau may establish. In the 2013 Escrows Final Rule, 78 FR 4726 (January 22, 2013), the Bureau established such an asset-size threshold of $2,000,000,000, which will adjust automatically each year, based on the year-to year change in the average of the CPI–W for each 12-month period ending in November, with rounding to the nearest million dollars. See 12 CFR 1026.35(b)(2)(iii)(C). For 2013, the threshold was $2 billion. During the 12month period ending in November 2013, the average CPI–W increased by 1.4 percent. As a result, the exemption threshold is increased to $2.028 billion for 2014. Thus, loans made by creditors with assets of $2.028 billion or less as of December 31, 2013, that meet the other requirements of 12 CFR 1026.35(b)(2)(iii) will be exempt in 2014 from the escrow-accounts requirement for higher-priced mortgage loans. II. Procedural Requirements 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. 5 U.S.C. 553(b)(B). Pursuant to this final rule, supplement I and comment 35(b)(2)(iii)–1 in Regulation Z, are amended to update the exemption threshold. The amendment in this final rule is technical and nondiscretionary, and it merely applies the formulas established by Regulation X 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 and 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 for (1) a substantive rule which grants or recognizes an E:\FR\FM\30DER1.SGM 30DER1 Federal Register / Vol. 78, No. 250 / Monday, December 30, 2013 / Rules and Regulations 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 U.S.C. 553(d). 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, 2014. The amendment in this notice is technical and non-discretionary, and it applies the method previously established in the agency’s regulations for automatic adjustments to the threshold. 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. 5 U.S.C. 603(a), 604(a). iii. As of the end of the preceding calendar year, the creditor had total assets that are less than the asset threshold for the relevant calendar year. For calendar year 2014, the asset threshold is $2,028,000,000. Creditors that had total assets of less than $2,028,000,000 on December 31, 2013, satisfy this criterion for purposes of the exemption during 2014. This asset threshold shall adjust automatically each year based on the year-toyear change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers, not seasonally adjusted, for each 12-month period ending in November, with rounding to the nearest million dollars. The Bureau will publish notice of the asset threshold each year by amending this comment. For historical purposes, the prior asset threshold was: A. For calendar year 2013, the asset threshold was $2,000,000,000. Creditors that had total assets of less than $2,000,000,000 on December 31, 2012, satisfied this criterion for purposes of the exemption during 2013. * * * * * Dated: December 24, 2013. Richard Cordray, Director, Bureau of Consumer Financial Protection. List of Subjects in 12 CFR Part 1026 Advertising, Consumer protection, Credit, Credit unions, Mortgages, National banks, Reporting and recordkeeping requirements, Savings associations, Truth in lending. [FR Doc. 2013–31225 Filed 12–26–13; 11:15 am] BILLING CODE 4810–AM–P Authority and Issuance For the reasons set forth in the preamble, the Bureau amends Regulation Z, 12 CFR part 1026, as set forth below: DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 1. The authority citation for part 1026 continues to read as follows: ■ [Docket No. FAA–2013–0370; Directorate Identifier 2013–NM–034–AD; Amendment 39–17711; AD 2013–26–02] RIN 2120–AA64 Authority: 12 U.S.C. 2601, 2603–2605, 2607, 2609, 2617, 5511, 5512, 5532, 5581; 15 U.S.C. 1601 et seq. Airworthiness Directives; Bombardier, Inc. Airplanes 2. In Supplement I to part 1026— Official Interpretations, under Section 1026.35—Requirements for HigherPriced Mortgage Loans, 35(b)(2) Exemptions, Paragraph 35(b)(2)(iii), paragraph 1.iii is revised. The revision reads as follows: AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Final rule. ■ * * * * * Subpart E—Special Rules for Certain Home Mortgage Transactions wreier-aviles on DSK5TPTVN1PROD with RULES * * * * * Section 1026.35—Requirements for Higher-Priced Mortgage Loans * * * * * 35(b)(2) Exemptions. * * * * * Paragraph 35(b)(2)(iii) 1. Requirements for exemption. * * * * * * VerDate Mar<15>2010 * * 15:10 Dec 27, 2013 Jkt 232001 We are adopting a new airworthiness directive (AD) for certain Bombardier, Inc. Model CL–600–2C10 (Regional Jet Series 700, 701, & 702), CL–600–2D15 (Regional Jet Series 705), and CL–600–2D24 (Regional Jet Series 900) airplanes. This AD was prompted by a report that traces of oil could be found in the crew oxygen system due to the use of incorrect pressure testing procedures during manufacturing. This AD requires cleaning the crew oxygen system. We are issuing this AD to detect and correct oil contaminants, which could cause an ignition and result in a fire in the oxygen system. DATES: This AD becomes effective February 3, 2014. The Director of the Federal Register approved the incorporation by reference SUMMARY: Supplement I to Part 1026—Official Interpretations PO 00000 Frm 00005 Fmt 4700 of a certain publication listed in this AD as of February 3, 2014. ADDRESSES: You may examine the AD on the Internet at http:// www.regulations.gov/ #!docketDetail;D=FAA-2013-0370; or in person at the U.S. Department of Transportation, Docket Operations, M– 30, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue SE., Washington, DC. For service information identified in this AD, contact Bombardier, Inc., 400 ˆ ´ Cote-Vertu Road West, Dorval, Quebec H4S 1Y9, Canada; telephone 514–855– 5000; fax 514–855–7401; email thd.crj@ aero.bombardier.com; Internet http:// www.bombardier.com. You may review copies of the referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425–227–1221. FOR FURTHER INFORMATION CONTACT: Cesar Gomez, Aerospace Engineer, Airframe and Mechanical Systems Branch, ANE–171, FAA, New York Aircraft Certification Office, 1600 Stewart Avenue, Suite 410, Westbury, New York 11590; telephone (516) 228– 7318; fax (516) 794–5531. SUPPLEMENTARY INFORMATION: Discussion 14 CFR Part 39 PART 1026—TRUTH IN LENDING (REGULATION Z) 79287 Sfmt 4700 We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to the specified products. The NPRM published in the Federal Register on May 10, 2013 (78 FR 27314). The NPRM proposed to correct an unsafe condition for the specified products. Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF–2013–01, dated January 22, 2013 (referred to after this as the Mandatory Continuing Airworthiness Information, or ‘‘the MCAI’’), to correct an unsafe condition for the specified products. The MCAI states: It was found that traces of oil could be present in the crew oxygen system due to the use of incorrect pressure testing procedures during manufacturing. Field sampling of nine aeroplanes have confirmed this condition. When the oxygen system is used, oil contaminants can cause an ignition and result in a fire in the oxygen system. This [Canadian] AD mandates the cleaning of the crew oxygen system to reduce oil contaminants to a safe level. You may examine the MCAI in the AD docket on the Internet at http:// www.regulations.gov/ E:\FR\FM\30DER1.SGM 30DER1

Agencies

[Federal Register Volume 78, Number 250 (Monday, December 30, 2013)]
[Rules and Regulations]
[Pages 79286-79287]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-31225]


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BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1026


Truth in Lending (Regulation Z): Adjustment to Asset-Size 
Exemption Threshold

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Final rule; official commentary.

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

SUMMARY: The Bureau is amending the official commentary that interprets 
the requirements of the Bureau's Regulation Z (Truth in Lending) to 
reflect a change in the asset size threshold for certain creditors to 
qualify for an exemption to the requirement to establish an escrow 
account for a higher-priced mortgage loan based on the annual 
percentage change in the average of the Consumer Price Index for Urban 
Wage Earners and Clerical Workers (CPI-W) for the 12-month period 
ending in November. The exemption threshold is adjusted to increase to 
$2.028 billion from $2 billion. The adjustment is based on the 1.4 
percent increase in the average of the CPI-W for the 12-month period 
ending in November 2013. Therefore, creditors with assets of $2.028 
billion or less as of December 31, 2013, are exempt, if other 
requirements of Regulation Z also are met, from establishing escrow 
accounts for higher-priced mortgage loans in 2014.

DATES: This final rule is effective January 1, 2014.

FOR FURTHER INFORMATION CONTACT: David Friend, Counsel, Office of 
Regulations, Consumer Financial Protection Bureau, 1700 G Street NW., 
Washington, DC 20552 at (202) 435-7700.

SUPPLEMENTARY INFORMATION:

I. Background

    The Dodd-Frank Wall Street Reform and Consumer Protection Act 
(Dodd-Frank Act) amended TILA section 129D(a) to contain a general 
requirement that an escrow account be established by a creditor to pay 
for property taxes and insurance premiums for certain first-lien 
higher-priced mortgage loan transactions. Section 1461 of the Dodd-
Frank Act also generally permits an exemption from the higher-priced 
mortgage loan escrow requirement for a creditor that: (1) Operates 
predominantly in rural or underserved areas; (2) together with all 
affiliates, has total annual mortgage loan originations that do not 
exceed a limit set by the Bureau; (3) retains its mortgage obligations 
in portfolio; and (4) meets any asset-size threshold and any other 
criteria as the Bureau may establish.
    In the 2013 Escrows Final Rule, 78 FR 4726 (January 22, 2013), the 
Bureau established such an asset-size threshold of $2,000,000,000, 
which will adjust automatically each year, based on the year-to year 
change in the average of the CPI-W for each 12-month period ending in 
November, with rounding to the nearest million dollars. See 12 CFR 
1026.35(b)(2)(iii)(C). For 2013, the threshold was $2 billion. During 
the 12-month period ending in November 2013, the average CPI-W 
increased by 1.4 percent. As a result, the exemption threshold is 
increased to $2.028 billion for 2014. Thus, loans made by creditors 
with assets of $2.028 billion or less as of December 31, 2013, that 
meet the other requirements of 12 CFR 1026.35(b)(2)(iii) will be exempt 
in 2014 from the escrow-accounts requirement for higher-priced mortgage 
loans.

II. Procedural Requirements

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. 5 U.S.C. 553(b)(B). Pursuant to this 
final rule, supplement I and comment 35(b)(2)(iii)-1 in Regulation Z, 
are amended to update the exemption threshold. The amendment in this 
final rule is technical and nondiscretionary, and it merely applies the 
formulas established by Regulation X 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 and 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 for (1) a 
substantive rule which grants or recognizes an

[[Page 79287]]

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 U.S.C. 553(d). 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, 2014. The amendment in 
this notice is technical and non-discretionary, and it applies the 
method previously established in the agency's regulations for automatic 
adjustments to the threshold.

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. 5 U.S.C. 603(a), 604(a).

List of Subjects in 12 CFR Part 1026

    Advertising, Consumer protection, Credit, Credit unions, Mortgages, 
National banks, Reporting and recordkeeping requirements, Savings 
associations, Truth in lending.

Authority and Issuance

    For the reasons set forth in the preamble, the Bureau amends 
Regulation Z, 12 CFR part 1026, as set forth below:

PART 1026--TRUTH IN LENDING (REGULATION Z)

0
1. The authority citation for part 1026 continues to read as follows:

    Authority: 12 U.S.C. 2601, 2603-2605, 2607, 2609, 2617, 5511, 
5512, 5532, 5581; 15 U.S.C. 1601 et seq.


0
2. In Supplement I to part 1026--Official Interpretations, under 
Section 1026.35--Requirements for Higher-Priced Mortgage Loans, 
35(b)(2) Exemptions, Paragraph 35(b)(2)(iii), paragraph 1.iii is 
revised.
    The revision reads as follows:

Supplement I to Part 1026--Official Interpretations

* * * * *

Subpart E--Special Rules for Certain Home Mortgage Transactions

* * * * *

Section 1026.35--Requirements for Higher-Priced Mortgage Loans

* * * * *
    35(b)(2) Exemptions.
* * * * *

Paragraph 35(b)(2)(iii)

    1. Requirements for exemption. * * *
* * * * *
    iii. As of the end of the preceding calendar year, the creditor 
had total assets that are less than the asset threshold for the 
relevant calendar year. For calendar year 2014, the asset threshold 
is $2,028,000,000. Creditors that had total assets of less than 
$2,028,000,000 on December 31, 2013, satisfy this criterion for 
purposes of the exemption during 2014. This asset threshold shall 
adjust automatically each year 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 12-month period 
ending in November, with rounding to the nearest million dollars. 
The Bureau will publish notice of the asset threshold each year by 
amending this comment. For historical purposes, the prior asset 
threshold was:
    A. For calendar year 2013, the asset threshold was 
$2,000,000,000. Creditors that had total assets of less than 
$2,000,000,000 on December 31, 2012, satisfied this criterion for 
purposes of the exemption during 2013.
* * * * *

    Dated: December 24, 2013.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2013-31225 Filed 12-26-13; 11:15 am]
BILLING CODE 4810-AM-P