Appraisals for Higher-Priced Mortgage Loans Exemption Threshold Adjustment-Final Rule, 78296-78299 [2014-30419]
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78296
Federal Register / Vol. 79, No. 249 / Tuesday, December 30, 2014 / Rules and Regulations
order to facilitate the orderly resolution
of the defaulting counterparty; or
(ii) Where the agreement is subject by
its terms to, or incorporates, any of the
laws referenced in paragraph (2)(i) of
this definition;
(3) The agreement does not contain a
walkaway clause (that is, a provision
that permits a non-defaulting
counterparty to make a lower payment
than it otherwise would make under the
agreement, or no payment at all, to a
defaulter or the estate of a defaulter,
even if the defaulter or the estate of the
defaulter is a net creditor under the
agreement); and
(4) In order to recognize an agreement
as a qualifying master netting agreement
for purposes of this subpart, a Boardregulated institution must comply with
the requirements of § 217.3(d) with
respect to that agreement.
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Repo-style transaction means a
repurchase or reverse repurchase
transaction, or a securities borrowing or
securities lending transaction, including
a transaction in which the Boardregulated institution acts as agent for a
customer and indemnifies the customer
against loss, provided that:
(3) * * *
(ii) * * *
(A) The transaction is executed under
an agreement that provides the Boardregulated institution the right to
accelerate, terminate, and close-out the
transaction on a net basis and to
liquidate or set-off collateral promptly
upon an event of default, including
upon an event of receivership,
insolvency, liquidation, or similar
proceeding, of the counterparty,
provided that, in any such case, any
exercise of rights under the agreement
will not be stayed or avoided under
applicable law in the relevant
jurisdictions, other than in receivership,
conservatorship, or resolution under the
Federal Deposit Insurance Act, Title II
of the Dodd-Frank Act, or under any
similar insolvency law applicable to
GSEs, or laws of foreign jurisdictions
that are substantially similar 8 to the
U.S. laws referenced in this paragraph
(3)(ii)(a) in order to facilitate the orderly
resolution of the defaulting
counterparty; or
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8 The Board expects to evaluate jointly with the
OCC and Federal Deposit Insurance Corporation
whether foreign special resolution regimes meet the
requirements of this paragraph.
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PART 249—LIQUIDITY RISK
MEASUREMENT STANDARDS
(REGULATION WW)
7. The authority citation for part 249
continues to read as follows:
■
Authority: 12 U.S.C. 248(a), 321–338a,
481–486, 1467a(g)(1), 1818, 1828, 1831p–1,
1831o–1, 1844(b), 5365, 5366, 5368.
8. Section 249.3 is amended by:
a. Revising the definition of
‘‘qualifying master netting agreement’’;
and
■ b. In paragraph (2) of the definition of
‘‘regulated financial company’’,
redesignating footnote 1 as footnote 2.
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§ 249.3
Definitions.
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Qualifying master netting agreement
means a written, legally enforceable
agreement provided that:
(1) The agreement creates a single
legal obligation for all individual
transactions covered by the agreement
upon an event of default following any
stay permitted by paragraph (2) of this
definition, including upon an event of
receivership, conservatorship,
insolvency, liquidation, or similar
proceeding, of the counterparty;
(2) The agreement provides the Boardregulated institution the right to
accelerate, terminate, and close-out on a
net basis all transactions under the
agreement and to liquidate or set-off
collateral promptly upon an event of
default, including upon an event of
receivership, conservatorship,
insolvency, liquidation, or similar
proceeding, of the counterparty,
provided that, in any such case, any
exercise of rights under the agreement
will not be stayed or avoided under
applicable law in the relevant
jurisdictions, other than:
(i) In receivership, conservatorship, or
resolution under the Federal Deposit
Insurance Act, Title II of the DoddFrank Act, or under any similar
insolvency law applicable to GSEs, or
laws of foreign jurisdictions that are
substantially similar 1 to the U.S. laws
referenced in this paragraph (2)(i) in
order to facilitate the orderly resolution
of the defaulting counterparty; or
(ii) Where the agreement is subject by
its terms to, or incorporates, any of the
laws referenced in paragraph (2)(i) of
this definition;
(3) The agreement does not contain a
walkaway clause (that is, a provision
that permits a non-defaulting
counterparty to make a lower payment
1 The Board expects to evaluate jointly with the
OCC and Federal Deposit Insurance Corporation
whether foreign special resolution regimes meet the
requirements of this paragraph.
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than it otherwise would make under the
agreement, or no payment at all, to a
defaulter or the estate of a defaulter,
even if the defaulter or the estate of the
defaulter is a net creditor under the
agreement); and
(4) In order to recognize an agreement
as a qualifying master netting agreement
for purposes of this subpart, a Boardregulated institution must comply with
the requirements of § 249.4(a) with
respect to that agreement.
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Dated: December 16, 2014.
Thomas J. Curry,
Comptroller of the Currency.
By order of the Board of Governors of the
Federal Reserve System, December 16, 2014.
Margaret McCloskey Shanks,
Deputy Secretary of the Board.
[FR Doc. 2014–30218 Filed 12–29–14; 8:45 am]
BILLING CODE P
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 34
[Docket No. OCC–2014–0027]
RIN 1557–AD90
BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM
12 CFR Part 226
[Docket No. R–1443]
RIN 7100–AD 90
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1026
RIN 3170–AA11
Appraisals for Higher-Priced Mortgage
Loans Exemption Threshold
Adjustment—Final Rule
Board of Governors of the
Federal Reserve System (Board); Bureau
of Consumer Financial Protection
(Bureau); and Office of the Comptroller
of the Currency, Treasury (OCC).
ACTION: Final rule; official staff
interpretations; technical amendment.
AGENCY:
The OCC, the Board and the
Bureau are publishing final rules
amending the official staff
interpretations for their regulations that
implement section 129H of the Truth in
Lending Act (TILA). Section 129H of
TILA establishes special appraisal
requirements for ‘‘higher-risk
SUMMARY:
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mortgages,’’ termed ‘‘higher-priced
mortgages’’ or ‘‘HPMLs’’ in the agencies’
regulations. The OCC, the Board, the
Bureau, the Federal Deposit Insurance
Corporation (FDIC), the National Credit
Union Administration (NCUA) and the
Federal Housing Finance Agency
(FHFA) (collectively, the Agencies)
issued joint final rules implementing
these requirements, effective January 18,
2014. The Agencies’ rules exempted,
among other loan types, transactions of
$25,000 or less, and required that this
loan amount be adjusted annually based
on any annual percentage increase in
the Consumer Price Index for Urban
Wage Earners and Clerical Workers
(CPI–W). Based on the annual
percentage increase in the CPI–W as of
June 1, 2014, the OCC, the Board and
the Bureau are adjusting the exemption
threshold to $25,500, effective January
1, 2015.
DATES: This final rule is effective
January 1, 2015.
FOR FURTHER INFORMATION CONTACT:
OCC: Beth Knickerbocker, Counsel,
Legislative & Regulatory Activities
Division, at (202) 649–5490; for persons
who are deaf and hard of hearing, TTY,
(202) 649–5597.
Board: Lorna M. Neill, Counsel,
Division of Consumer and Community
Affairs, Board of Governors of the
Federal Reserve System, at (202) 452–
3667; for users of Telecommunications
Device for the Deaf (TDD) only, contact
(202) 263–4869.
Bureau: James Wylie, Counsel, Office
of Regulations, Bureau of Consumer
Financial Protection, at (202) 435–7700.
SUPPLEMENTARY INFORMATION:
I. Background
The Dodd-Frank Wall Street Reform
and Consumer Protection Act of 2010
(Dodd-Frank Act) amended the Truth in
Lending Act (TILA) to add special
appraisal requirements for ‘‘higher-risk
mortgages.’’ 1 In January 2013, the
Agencies issued a joint final rule
implementing these requirements and
adopted the term ‘‘higher-priced
mortgage loan’’ (HPML) instead of
‘‘higher-risk mortgage’’ (the January
2013 Final Rule).2 In December 2013,
the Agencies issued a supplemental
final rule with additional exemptions
from the January 2013 Final Rule (the
December 2013 Supplemental Final
Rule).3 Among other exemptions, the
Agencies adopted an exemption from
the new HPML appraisal rules for
1 Public Law 111–203 section 1471, 124 Stat.
1376 (2010), codified at TILA section 129H, 15
U.S.C. 1639h.
2 78 FR 10368 (Feb. 13, 2013).
3 78 FR 78520 (Dec. 26, 2013)
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transactions of $25,000 or less, to be
adjusted annually for inflation.
The Bureau’s, the OCC’s, and the
Board’s versions of the January 2013
Final Rule and December 2013
Supplemental Final Rule and
corresponding official interpretations
are substantively identical. The FDIC,
NCUA, and FHFA adopted the Bureau’s
version of the regulations under the
January 2013 Final Rule and December
2013 Supplemental Final Rule.4
Section 34.203(b)(2) of Subpart G of
part 34 of the OCC’s regulations,
§ 226.43(b)(2) of the Board’s Regulation
Z, and § 1026.35(c)(2)(ii) of the Bureau’s
Regulation Z, and their accompanying
interpretations, provide that the
exemption threshold for smaller loans
will be adjusted effective January 1 of
each year based on any annual
percentage increase in the Consumer
Price Index for Urban Wage Earners and
Clerical Workers (CPI–W) that was in
effect on the preceding June 1. Any
increase in the threshold amount will be
rounded to the nearest $100 increment.
For example, if the annual percentage
increase in the CPI–W would result in
a $950 increase in the threshold
amount, the threshold amount will be
increased by $1,000. However, if the
annual percentage increase in the CPI–
W would result in a $949 increase in the
threshold amount, the threshold amount
will be increased by $900.5
II. Adjustment and Commentary
Revision
Effective January 1, 2015, the adjusted
exemption threshold amount is $25,500.
This adjustment is based on the CPI–W
index in effect on June 1, 2014, which
was reported on May 15, 2014. The
Bureau of Labor Statistics publishes
consumer-based indices monthly, but
does not report a CPI change on June 1;
adjustments are reported in the middle
of the month. The CPI–W is a subset of
the CPI–U index (based on all urban
consumers) and represents
approximately 28 percent of the U.S.
population. The adjustment reflects a 2
percent increase in the CPI–W from
April 2013 to April 2014. Accordingly,
the OCC, the Board, and the Bureau are
revising the interpretations to their
respective regulations to add new
comments as follows:
4 See NCUA: 12 CFR 722.3; FHFA: 12 CFR part
1222. Although the FDIC adopted the Bureau’s
version of the regulation, the FDIC did not issue its
own regulation containing a cross-reference to the
Bureau’s version. See 78 FR 10368, 10370 (Feb. 13,
2013).
5 See 12 CFR part 34, Appendix C to Subpart G,
comment 203(b)(2)–1 (OCC); 12 CFR part 226,
Supplement I, comment 43(b)(2)–1 (Board); and 12
CFR part 1026, Supplement I, comment 35(c)(2)(ii)–
1 (Bureau).
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78297
• Comment 203(b)(2)–1.ii to 12 CFR
part 34, Appendix C to Subpart G
(OCC);
• Comment 43(b)(2)–1.ii to
Supplement I of 12 CFR part 226
(Board); and
• Comment 35(c)(2)(ii)–1.ii in
Supplement I of 12 CFR part 1026
(Bureau).
These new comments state that, from
January 1, 2015 through December 31,
2015, the threshold amount is $25,500.
These revisions are effective January 1,
2015.
III. Administrative Law Matters
Administrative Procedure Act
Under the Administrative Procedure
Act (APA), notice and opportunity for
public comment are not required if an
agency finds that notice and public
comment are impracticable,
unnecessary, or contrary to the public
interest.6 This annual adjustment is
required by the December 2013
Supplemental Final Rule. The
amendment in this notice is technical
and non-discretionary, and it applies
the method previously established,
through notice and comment, in the
Agencies’ regulations for determining
adjustments to the exemption threshold.
For these reasons, the OCC, the Board
and the Bureau have determined that
publishing a notice of proposed
rulemaking and providing opportunity
for public comment are unnecessary.
Therefore, the amendments are adopted
in final form.
The effective date of this final rule is
January 1, 2015. Under the APA, the
required publication or service of a
substantive rule shall be made not less
than 30 days before its effective date,
except, among other things, as provided
by the agency for good cause found and
published with the rule.7 Because this
rule adjusts the exemption threshold
consistent with the procedural
requirements of the official staff
interpretations, the OCC, the Board and
the Bureau conclude that it is not
substantive within the meaning of the
APA’s delayed effective date provision.
Moreover, the agencies find that there is
good cause for dispensing with the
delayed effective date requirement, even
if it applied, because their current rules
already provide notice that the
exemption threshold will be adjusted
effective January 1 based on any annual
percentage increase in the CPI–W that
was in effect on the preceding June 1.
65
75
U.S.C. 553(b)(B).
U.S.C. 553(d)(3).
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Federal Register / Vol. 79, No. 249 / Tuesday, December 30, 2014 / Rules and Regulations
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA)
does not apply to a rulemaking where a
general notice of proposed rulemaking
is not required.8 As noted previously,
the agencies have determined that it is
unnecessary to publish a general notice
of proposed rulemaking for this joint
final rule. Accordingly, the RFA’s
requirements relating to an initial and
final regulatory flexibility analysis do
not apply.
PART 34—REAL ESTATE LENDING
AND APPRAISALS
43(b) Exemptions
1. The authority citation for part 34
continues to read as follows:
Paragraph 43(b)(2)
■
Authority: 12 U.S.C. 1 et seq., 25b, 29, 93a,
371, 1463, 1464, 1465,1701j–3, 1828(o), 3331
et seq., 5101 et seq., 5412(b)(2)(B) and 15
U.S.C. 1639h.
Subpart G—Appraisals for HigherPriced Mortgage Loans
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1. Threshold amount. * * *
ii. From January 1, 2015 through December
31, 2015, the threshold amount is $25,500.
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Bureau of Consumer Financial
Protection
Authority and Issuance
■
2. In Appendix C to Subpart G, under
Section 34.203—Appraisals for HigherPriced Mortgage Loans, paragraph
34.203(b)(2)–1.ii is added to read as
follows:
For the reasons set forth in the
preamble, the Bureau amends
Regulation Z, 12 CFR part 1026, as set
forth below:
Appendix C to Subpart G—OCC
Interpretations
PART 1026—TRUTH IN LENDING
(REGULATION Z)
Unfunded Mandates Reform Act
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The OCC analyzes proposed rules for
the factors listed in Section 202 of the
Unfunded Mandates Reform Act of
1995, before promulgating a final rule
for which a general notice of proposed
rulemaking was published.10 As
discussed above, the OCC had
determined that the publication of a
general notice of proposed rulemaking
is unnecessary.
Section 34.203—Appraisals for Higher-Priced
Mortgage Loans
Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act of 1995,9 the agencies
reviewed this final rule. No collections
of information pursuant to the
Paperwork Reduction Act are contained
in the final rule.
List of Subjects
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34.203(b) Exemptions
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Paragraph 34.203(b)(2)
1. Threshold amount. * * *
ii. From January 1, 2015 through December
31, 2015, the threshold amount is $25,500.
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Board of Governors of the Federal
Reserve System
12 CFR Part 34
Appraisal, Appraiser, Banks, Banking,
Consumer protection, Credit, Mortgages,
National banks, Reporting and
recordkeeping requirements, Savings
associations, Truth in lending.
Authority and Issuance
12 CFR Part 226
PART 226—TRUTH IN LENDING
(REGULATION Z)
Advertising, Appraisal, Appraiser,
Consumer protection, Credit, Federal
Reserve System, Mortgages, Reporting
and recordkeeping requirements, Truth
in lending.
12 CFR Part 1026
Advertising, Appraisal, Appraiser,
Banking, Banks, Consumer protection,
Credit, Credit unions, Mortgages,
National banks, Reporting and
recordkeeping requirements, Savings
associations, Truth in lending.
For the reasons set forth in the
preamble, the Board amends Regulation
Z, 12 CFR part 226, as set forth below:
Supplement I to Part 1026—Official
Interpretations
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Subpart E—Special Rules for Certain Home
Mortgage Transactions
Section 1026.35—Requirements for HigherPriced Mortgage Loans
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35(c)(2) Exemptions
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1. Threshold amount. * * *
ii. From January 1, 2015 through December
31, 2015, the threshold amount is $25,500.
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Dated: December 11, 2014.
Amy Friend,
Senior Deputy Comptroller and Chief
Counsel.
By order of the Board of Governors of the
Federal Reserve System, acting through the
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35(c) Appraisals
Section 226.43—Appraisals for Higher-Priced
Mortgage Loans
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*
Paragraph 35(c)(2)(ii)
For the reasons set forth in the
preamble, the OCC amends 12 CFR part
34 as set forth below:
U.S.C. 603 and 604.
U.S.C. 3506; 5 CFR 1320.
10 2 U.S.C. 1532.
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Subpart A—General
Authority and Issuance
9 44
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Subpart E—Special Rules for Certain Home
Mortgage Transactions
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Supplement I to Part 226—Official Staff
Interpretations
85
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Authority: 12 U.S.C. 3806; 15 U.S.C. 1604,
1637(c)(5), 1639(l), and 1639h; Pub. L. 111–
24 § 2, 123 Stat. 1734; Pub. L. 111–203, 124
Stat. 1376.
Office of the Comptroller of the
Currency
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6. In Supplement I to part 1026, under
Section 1026.35—Requirements for
Higher-Priced Mortgage Loans, under
Paragraph 35(c)(2)(ii), paragraph
35(c)(2)(ii)–1.ii is added to read as
follows:
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Department of the Treasury
17:00 Dec 29, 2014
Authority: 12 U.S.C. 2601, 2603–2605,
2607, 2609, 2617, 5511, 5512, 5532, 5581; 15
U.S.C. 1601 et seq.
3. The authority citation for part 226
continues to read as follows:
■
4. In Supplement I to part 226, under
Section 226.43—Appraisals for HigherPriced Mortgage Loans, under Paragraph
43(b)(2), paragraph 43(b)(2)–1.ii is
added to read as follows:
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5. The authority citation for part 1026
continues to read as follows:
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Federal Register / Vol. 79, No. 249 / Tuesday, December 30, 2014 / Rules and Regulations
Secretary of the Board under delegated
authority, December 19, 2014.
Robert deV. Frierson,
Secretary of the Board.
Dated: December 18, 2014.
Richard Cordray,
Director, Bureau of Consumer Financial
Protection.
Independence Avenue SW.,
Washington, DC 20591; telephone: 202–
267–8166; email: will.gonzalez@faa.gov.
For legal questions concerning this
action, contact: Robert Frenzel, Office of
the Chief Counsel, AGC–200, Federal
Aviation Administration, 800
Independence Avenue SW.,
Washington, DC 20591; telephone (202)
267–7638.
SUPPLEMENTARY INFORMATION:
[FR Doc. 2014–30419 Filed 12–29–14; 8:45 am]
BILLING CODE 4810–33–P; 6210–01–P; 4810–AM–P
Federal Aviation
Administration (FAA), DOT.
ACTION: Immediately adopted final rule.
Good Cause for Immediate Adoption
Section 553(b)(3)(B) of title 5, U.S.
Code, authorizes agencies to dispense
with notice and comment procedures
for rules when the agency for ‘‘good
cause’’ finds that those procedures are
‘‘impracticable, unnecessary, or contrary
to the public interest.’’ In this instance,
the FAA finds that notice and public
comment to this immediately adopted
final rule, as well as any delay in the
effective date of this rule, are contrary
to the public interest due to the
immediate need to address the potential
hazard to civil aviation that exists in the
OSTT FIR, as described in the
Background section of this final rule.
This action prohibits certain
flight operations in the Damascus
(OSTT) Flight Information Region (FIR)
by all U.S. air carriers; U.S. commercial
operators; persons exercising the
privileges of a U.S. airman certificate,
except when such persons are operating
a U.S.-registered aircraft for a foreign air
carrier; and operators of U.S.-registered
civil aircraft, except when such
operators are foreign air carriers. The
FAA previously prohibited such flight
operations in a Notice to Airmen
(NOTAM) 4/4936, which was issued on
August 18, 2014, and absent this rule,
would have remained in effect until
December 31, 2014. This Special
Federal Aviation Regulation (SFAR)
adopts the prohibitions currently in
effect via the NOTAM, and requires
compliance with the prohibitions for 2
years from the date of publication of this
final rule, unless the FAA determines
that it is necessary to amend or rescind
this rule based on the situation in the
region. The FAA finds that this action
is necessary to address a potential
hazard to persons and aircraft engaged
in such flight operations.
DATES: This final rule is effective on
December 30, 2014, and remains in
effect through December 30, 2016.
FOR FURTHER INFORMATION CONTACT: For
technical questions about this action,
contact Will Gonzalez, Air
Transportation Division, AFS–220,
Flight Standards Service, Federal
Aviation Administration, 800
Authority for This Rulemaking
The FAA is responsible for the safety
of flight in the United States and for the
safety of U.S. civil operators, U.S.registered civil aircraft, and U.S.certificated airmen throughout the
world. The FAA’s authority to issue
rules on aviation safety is found in title
49 of the U.S. Code. Subtitle I, section
106(f), describes the authority of the
FAA Administrator. Subtitle VII of title
49, Aviation Programs, describes in
more detail the scope of the agency’s
authority. Section 40101(d)(1) provides
that the Administrator shall consider in
the public interest, among other matters,
assigning, maintaining, and enhancing
safety and security as the highest
priorities in air commerce. Section
40105(b)(1)(A) requires the
Administrator to exercise his authority
consistently with the obligations of the
U.S. Government under international
agreements.
This SFAR is promulgated under the
authority described in Title 49, Subtitle
VII, Part A, Subpart III, section 44701,
General requirements. Under that
section, the FAA is charged broadly
with promoting safe flight of civil
aircraft in air commerce by prescribing,
among other things, regulations and
minimum standards for practices,
methods, and procedures that the
Administrator finds necessary for safety
in air commerce and national security.
This regulation is within the scope of
that authority because it prohibits
certain flight operations in the OSTT
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 91
[Docket No. FAA–2014–0708; Amendment
No. 91–334; SFAR No. 114]
RIN 2120–AK61
Prohibition Against Certain Flights
Within the Damascus (OSTT) Flight
Information Region (FIR)
AGENCY:
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SUMMARY:
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78299
FIR due to the potential hazard to
persons and aircraft engaged in such
flight operations that is described in the
‘‘Background’’ section of this final rule.
I. Overview of Immediately Adopted
Final Rule
This action prohibits certain flight
operations in the OSTT FIR, by all U.S.
air carriers; U.S. commercial operators;
persons exercising the privileges of a
U.S. airman certificate, except when
such persons are operating a U.S.registered aircraft for a foreign air
carrier; and operators of U.S.-registered
civil aircraft, except when such
operators are foreign air carriers. The
FAA previously prohibited such flight
operations in FDC NOTAM 4/4936,
which was issued on August 18, 2014.
This action incorporates that
prohibition into the Code of Federal
Regulations (CFR). The FAA finds this
action necessary to address a potential
hazard to persons and aircraft engaged
in such flight operations, as described
below.
II. Background
Due to the ongoing armed conflict and
volatile security environment in Syria,
the FAA has serious concerns regarding
potential hazards to U.S. civil flight
operations in the OSTT FIR. A number
of armed extremist groups are known to
be equipped with a variety of antiaircraft weapons that have the capability
to threaten civil aircraft. These groups
have successfully shot down Syrian
military aircraft and have previously
warned civil air carriers against
providing service to Syria. Due to the
presence of these weapons, threats made
by the extremist groups, and ongoing
fighting throughout Syria involving
various forms of weaponry used by
various groups, as well as military
fighter aircraft used by the Syrian Air
Force, the FAA believes there is a
significant threat to U.S. civil aviation
operating in the OSTT FIR at any
altitude.
On August 18, 2014, in response to
the potentially hazardous situation
created by the armed conflict in Syria,
the FAA issued FDC NOTAM 4/4936,
which prohibited flight operations in
the OSTT FIR by all U.S. air carriers;
U.S. commercial operators; persons
exercising the privileges of a U.S.
airman certificate, except when such
persons are operating a U.S.-registered
aircraft for a foreign air carrier; and
operators of U.S.-registered civil aircraft,
except when such operators are foreign
air carriers. In addition, on September
23, 2014, the President announced that
U.S. and allied forces had begun
airstrikes against the Islamic State in
E:\FR\FM\30DER1.SGM
30DER1
]]>Agencies
[Federal Register Volume 79, Number 249 (Tuesday, December 30, 2014)]
[Rules and Regulations]
[Pages 78296-78299]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-30419]
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DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 34
[Docket No. OCC-2014-0027]
RIN 1557-AD90
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
12 CFR Part 226
[Docket No. R-1443]
RIN 7100-AD 90
BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Part 1026
RIN 3170-AA11
Appraisals for Higher-Priced Mortgage Loans Exemption Threshold
Adjustment--Final Rule
AGENCY: Board of Governors of the Federal Reserve System (Board);
Bureau of Consumer Financial Protection (Bureau); and Office of the
Comptroller of the Currency, Treasury (OCC).
ACTION: Final rule; official staff interpretations; technical
amendment.
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SUMMARY: The OCC, the Board and the Bureau are publishing final rules
amending the official staff interpretations for their regulations that
implement section 129H of the Truth in Lending Act (TILA). Section 129H
of TILA establishes special appraisal requirements for ``higher-risk
[[Page 78297]]
mortgages,'' termed ``higher-priced mortgages'' or ``HPMLs'' in the
agencies' regulations. The OCC, the Board, the Bureau, the Federal
Deposit Insurance Corporation (FDIC), the National Credit Union
Administration (NCUA) and the Federal Housing Finance Agency (FHFA)
(collectively, the Agencies) issued joint final rules implementing
these requirements, effective January 18, 2014. The Agencies' rules
exempted, among other loan types, transactions of $25,000 or less, and
required that this loan amount be adjusted annually based on any annual
percentage increase in the Consumer Price Index for Urban Wage Earners
and Clerical Workers (CPI-W). Based on the annual percentage increase
in the CPI-W as of June 1, 2014, the OCC, the Board and the Bureau are
adjusting the exemption threshold to $25,500, effective January 1,
2015.
DATES: This final rule is effective January 1, 2015.
FOR FURTHER INFORMATION CONTACT:
OCC: Beth Knickerbocker, Counsel, Legislative & Regulatory
Activities Division, at (202) 649-5490; for persons who are deaf and
hard of hearing, TTY, (202) 649-5597.
Board: Lorna M. Neill, Counsel, Division of Consumer and Community
Affairs, Board of Governors of the Federal Reserve System, at (202)
452-3667; for users of Telecommunications Device for the Deaf (TDD)
only, contact (202) 263-4869.
Bureau: James Wylie, Counsel, Office of Regulations, Bureau of
Consumer Financial Protection, at (202) 435-7700.
SUPPLEMENTARY INFORMATION:
I. Background
The Dodd-Frank Wall Street Reform and Consumer Protection Act of
2010 (Dodd-Frank Act) amended the Truth in Lending Act (TILA) to add
special appraisal requirements for ``higher-risk mortgages.'' \1\ In
January 2013, the Agencies issued a joint final rule implementing these
requirements and adopted the term ``higher-priced mortgage loan''
(HPML) instead of ``higher-risk mortgage'' (the January 2013 Final
Rule).\2\ In December 2013, the Agencies issued a supplemental final
rule with additional exemptions from the January 2013 Final Rule (the
December 2013 Supplemental Final Rule).\3\ Among other exemptions, the
Agencies adopted an exemption from the new HPML appraisal rules for
transactions of $25,000 or less, to be adjusted annually for inflation.
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\1\ Public Law 111-203 section 1471, 124 Stat. 1376 (2010),
codified at TILA section 129H, 15 U.S.C. 1639h.
\2\ 78 FR 10368 (Feb. 13, 2013).
\3\ 78 FR 78520 (Dec. 26, 2013)
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The Bureau's, the OCC's, and the Board's versions of the January
2013 Final Rule and December 2013 Supplemental Final Rule and
corresponding official interpretations are substantively identical. The
FDIC, NCUA, and FHFA adopted the Bureau's version of the regulations
under the January 2013 Final Rule and December 2013 Supplemental Final
Rule.\4\
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\4\ See NCUA: 12 CFR 722.3; FHFA: 12 CFR part 1222. Although the
FDIC adopted the Bureau's version of the regulation, the FDIC did
not issue its own regulation containing a cross-reference to the
Bureau's version. See 78 FR 10368, 10370 (Feb. 13, 2013).
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Section 34.203(b)(2) of Subpart G of part 34 of the OCC's
regulations, Sec. 226.43(b)(2) of the Board's Regulation Z, and Sec.
1026.35(c)(2)(ii) of the Bureau's Regulation Z, and their accompanying
interpretations, provide that the exemption threshold for smaller loans
will be adjusted effective January 1 of each year based on any annual
percentage increase in the Consumer Price Index for Urban Wage Earners
and Clerical Workers (CPI-W) that was in effect on the preceding June
1. Any increase in the threshold amount will be rounded to the nearest
$100 increment. For example, if the annual percentage increase in the
CPI-W would result in a $950 increase in the threshold amount, the
threshold amount will be increased by $1,000. However, if the annual
percentage increase in the CPI-W would result in a $949 increase in the
threshold amount, the threshold amount will be increased by $900.\5\
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\5\ See 12 CFR part 34, Appendix C to Subpart G, comment
203(b)(2)-1 (OCC); 12 CFR part 226, Supplement I, comment 43(b)(2)-1
(Board); and 12 CFR part 1026, Supplement I, comment 35(c)(2)(ii)-1
(Bureau).
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II. Adjustment and Commentary Revision
Effective January 1, 2015, the adjusted exemption threshold amount
is $25,500. This adjustment is based on the CPI-W index in effect on
June 1, 2014, which was reported on May 15, 2014. The Bureau of Labor
Statistics publishes consumer-based indices monthly, but does not
report a CPI change on June 1; adjustments are reported in the middle
of the month. The CPI-W is a subset of the CPI-U index (based on all
urban consumers) and represents approximately 28 percent of the U.S.
population. The adjustment reflects a 2 percent increase in the CPI-W
from April 2013 to April 2014. Accordingly, the OCC, the Board, and the
Bureau are revising the interpretations to their respective regulations
to add new comments as follows:
Comment 203(b)(2)-1.ii to 12 CFR part 34, Appendix C to
Subpart G (OCC);
Comment 43(b)(2)-1.ii to Supplement I of 12 CFR part 226
(Board); and
Comment 35(c)(2)(ii)-1.ii in Supplement I of 12 CFR part
1026 (Bureau).
These new comments state that, from January 1, 2015 through
December 31, 2015, the threshold amount is $25,500. These revisions are
effective January 1, 2015.
III. Administrative Law Matters
Administrative Procedure Act
Under the Administrative Procedure Act (APA), notice and
opportunity for public comment are not required if an agency finds that
notice and public comment are impracticable, unnecessary, or contrary
to the public interest.\6\ This annual adjustment is required by the
December 2013 Supplemental Final Rule. The amendment in this notice is
technical and non-discretionary, and it applies the method previously
established, through notice and comment, in the Agencies' regulations
for determining adjustments to the exemption threshold. For these
reasons, the OCC, the Board and the Bureau have determined that
publishing a notice of proposed rulemaking and providing opportunity
for public comment are unnecessary. Therefore, the amendments are
adopted in final form.
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\6\ 5 U.S.C. 553(b)(B).
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The effective date of this final rule is January 1, 2015. Under the
APA, the required publication or service of a substantive rule shall be
made not less than 30 days before its effective date, except, among
other things, as provided by the agency for good cause found and
published with the rule.\7\ Because this rule adjusts the exemption
threshold consistent with the procedural requirements of the official
staff interpretations, the OCC, the Board and the Bureau conclude that
it is not substantive within the meaning of the APA's delayed effective
date provision. Moreover, the agencies find that there is good cause
for dispensing with the delayed effective date requirement, even if it
applied, because their current rules already provide notice that the
exemption threshold will be adjusted effective January 1 based on any
annual percentage increase in the CPI-W that was in effect on the
preceding June 1.
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\7\ 5 U.S.C. 553(d)(3).
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[[Page 78298]]
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) does not apply to a rulemaking
where a general notice of proposed rulemaking is not required.\8\ As
noted previously, the agencies have determined that it is unnecessary
to publish a general notice of proposed rulemaking for this joint final
rule. Accordingly, the RFA's requirements relating to an initial and
final regulatory flexibility analysis do not apply.
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\8\ 5 U.S.C. 603 and 604.
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Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995,\9\ the
agencies reviewed this final rule. No collections of information
pursuant to the Paperwork Reduction Act are contained in the final
rule.
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\9\ 44 U.S.C. 3506; 5 CFR 1320.
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Unfunded Mandates Reform Act
The OCC analyzes proposed rules for the factors listed in Section
202 of the Unfunded Mandates Reform Act of 1995, before promulgating a
final rule for which a general notice of proposed rulemaking was
published.\10\ As discussed above, the OCC had determined that the
publication of a general notice of proposed rulemaking is unnecessary.
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\10\ 2 U.S.C. 1532.
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List of Subjects
12 CFR Part 34
Appraisal, Appraiser, Banks, Banking, Consumer protection, Credit,
Mortgages, National banks, Reporting and recordkeeping requirements,
Savings associations, Truth in lending.
12 CFR Part 226
Advertising, Appraisal, Appraiser, Consumer protection, Credit,
Federal Reserve System, Mortgages, Reporting and recordkeeping
requirements, Truth in lending.
12 CFR Part 1026
Advertising, Appraisal, Appraiser, Banking, Banks, Consumer
protection, Credit, Credit unions, Mortgages, National banks, Reporting
and recordkeeping requirements, Savings associations, Truth in lending.
Department of the Treasury
Office of the Comptroller of the Currency
Authority and Issuance
For the reasons set forth in the preamble, the OCC amends 12 CFR
part 34 as set forth below:
PART 34--REAL ESTATE LENDING AND APPRAISALS
0
1. The authority citation for part 34 continues to read as follows:
Authority: 12 U.S.C. 1 et seq., 25b, 29, 93a, 371, 1463, 1464,
1465,1701j-3, 1828(o), 3331 et seq., 5101 et seq., 5412(b)(2)(B) and
15 U.S.C. 1639h.
Subpart G--Appraisals for Higher-Priced Mortgage Loans
0
2. In Appendix C to Subpart G, under Section 34.203--Appraisals for
Higher-Priced Mortgage Loans, paragraph 34.203(b)(2)-1.ii is added to
read as follows:
Appendix C to Subpart G--OCC Interpretations
* * * * *
Section 34.203--Appraisals for Higher-Priced Mortgage Loans
* * * * *
34.203(b) Exemptions
* * * * *
Paragraph 34.203(b)(2)
1. Threshold amount. * * *
ii. From January 1, 2015 through December 31, 2015, the
threshold amount is $25,500.
* * * * *
Board of Governors of the Federal Reserve System
Authority and Issuance
For the reasons set forth in the preamble, the Board amends
Regulation Z, 12 CFR part 226, as set forth below:
PART 226--TRUTH IN LENDING (REGULATION Z)
0
3. The authority citation for part 226 continues to read as follows:
Authority: 12 U.S.C. 3806; 15 U.S.C. 1604, 1637(c)(5), 1639(l),
and 1639h; Pub. L. 111-24 Sec. 2, 123 Stat. 1734; Pub. L. 111-203,
124 Stat. 1376.
Subpart A--General
0
4. In Supplement I to part 226, under Section 226.43--Appraisals for
Higher-Priced Mortgage Loans, under Paragraph 43(b)(2), paragraph
43(b)(2)-1.ii is added to read as follows:
Supplement I to Part 226--Official Staff Interpretations
* * * * *
Subpart E--Special Rules for Certain Home Mortgage Transactions
* * * * *
Section 226.43--Appraisals for Higher-Priced Mortgage Loans
* * * * *
43(b) Exemptions
* * * * *
Paragraph 43(b)(2)
1. Threshold amount. * * *
ii. From January 1, 2015 through December 31, 2015, the
threshold amount is $25,500.
* * * * *
Bureau of Consumer Financial Protection
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
5. 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
6. In Supplement I to part 1026, under Section 1026.35--Requirements
for Higher-Priced Mortgage Loans, under Paragraph 35(c)(2)(ii),
paragraph 35(c)(2)(ii)-1.ii is added to read 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(c) Appraisals
* * * * *
35(c)(2) Exemptions
* * * * *
Paragraph 35(c)(2)(ii)
1. Threshold amount. * * *
ii. From January 1, 2015 through December 31, 2015, the
threshold amount is $25,500.
* * * * *
Dated: December 11, 2014.
Amy Friend,
Senior Deputy Comptroller and Chief Counsel.
By order of the Board of Governors of the Federal Reserve
System, acting through the
[[Page 78299]]
Secretary of the Board under delegated authority, December 19, 2014.
Robert deV. Frierson,
Secretary of the Board.
Dated: December 18, 2014.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2014-30419 Filed 12-29-14; 8:45 am]
BILLING CODE 4810-33-P; 6210-01-P; 4810-AM-P
