Home Mortgage Disclosure (Regulation C) Data Points and Coverage, 20049-20053 [2019-08979]

Download as PDF Federal Register / Vol. 84, No. 89 / Wednesday, May 8, 2019 / Proposed Rules Ms. Jennifer Tiedeman, U.S. Department of Energy, Office of the General Counsel, GC–33, 1000 Independence Avenue SW, Washington, DC 20585–0121. Telephone: (202) 287–6111. Email: Jennifer.Tiedeman@hq.doe.gov. SUPPLEMENTARY INFORMATION: On March 18, 2019, DOE published a notice in the Federal Register soliciting public comment on its RFI on the measurement of average use cycles or periods of use in DOE test procedures. 84 FR 9721. The RFI provided for the submission of comments by May 17, 2019. The Air Conditioning, Heating, and Refrigeration Institute (AHRI) has requested a twoweek extension of the public comment period, stating that it needs additional time to generate a response based on the input of its members. DOE has determined that an extension of the public comment period is appropriate based on the foregoing reason and is hereby extending the comment period. DOE will consider any comments received by midnight on May 31, 2019, and deems any comments received by that time to be timely submitted. FOR FURTHER INFORMATION CONTACT: Signed in Washington, DC, on May 1, 2019. Steven Chalk, Acting Deputy Assistant Secretary for Energy Efficiency, Energy Efficiency and Renewable Energy. [FR Doc. 2019–09437 Filed 5–7–19; 8:45 am] BILLING CODE 6450–01–P BUREAU OF CONSUMER FINANCIAL PROTECTION 12 CFR Part 1003 [Docket No. CFPB–2019–0020] RIN 3170–AA97 Home Mortgage Disclosure (Regulation C) Data Points and Coverage Bureau of Consumer Financial Protection. ACTION: Advance notice of proposed rulemaking. AGENCY: The Bureau of Consumer Financial Protection (Bureau) is issuing this Advance Notice of Proposed Rulemaking (ANPR) to solicit comments relating to whether to make changes to the data points that the Bureau’s October 2015 final rule implementing the Home Mortgage Disclosure Act (HMDA) added to Regulation C or revised to require additional information. Additionally, the Bureau is issuing this ANPR to solicit comments relating to the requirement that khammond on DSKBBV9HB2PROD with PROPOSALS SUMMARY: VerDate Sep<11>2014 16:31 May 07, 2019 Jkt 247001 institutions report certain business- or commercial-purpose transactions under Regulation C. DATES: Comments must be received by July 8, 2019. ADDRESSES: You may submit responsive information and other comments, identified by Docket No. CFPB–2019– 0020, by any of the following methods: • Federal eRulemaking Portal: http:// www.regulations.gov. Follow the instructions for submitting comments. • Email: 2019-ANPR-HMDA@ cfpb.gov. Include Docket No. CFPB– 2019–0020 in the subject line of the message. • Mail: Comment Intake, Bureau of Consumer Financial Protection, 1700 G Street NW, Washington, DC 20552. • Hand Delivery/Courier: Comment Intake, Bureau of Consumer Financial Protection, 1700 G Street NW, Washington, DC 20552. Instructions: When responding to a particular question, please note the question number at the top of the response. You are not required to answer all questions to receive consideration of your comments. The Bureau encourages the early submission of comments. All submissions must include the document title and docket number. Because paper mail in the Washington, DC area and at the Bureau is subject to delay, commenters are encouraged to submit comments electronically. In general, all comments received will be posted without change to http://www.regulations.gov. In addition, comments will be available for public inspection and copying at 1700 G Street NW, Washington, DC 20552, on official business days between the hours of 10:00 a.m. and 5:00 p.m. eastern daylight time. You can make an appointment to inspect the documents by telephoning 202–435–7275. All submissions, 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, or names of other individuals, should not be included. Submissions will not be edited to remove any identifying or contact information. The Bureau invites comment on all aspects of the ANPR from all interested parties. In the event that a respondent may have concerns about revealing proprietary or personal information, the Bureau welcomes comments from attorneys, consumer advocacy organizations, trade associations, or other representatives that do not identify their clients. PO 00000 Frm 00007 Fmt 4702 Sfmt 4702 20049 FOR FURTHER INFORMATION CONTACT: Jaydee DiGiovanni or Shaakira GoldRamirez, Counsels; or Amanda Quester or Alexandra Reimelt, Senior Counsels, Office of Regulations, at 202–435–7700 or https:// reginquiries.consumerfinance.gov. If you require this document in an alternative electronic format, please contact CFPB_Accessibility@cfpb.gov. The Bureau is issuing this ANPR to solicit information relating to whether to make changes to the data points that the Bureau’s October 2015 final rule implementing HMDA (2015 HMDA Rule) added to Regulation C or revised to require additional information. The Bureau also seeks comments relating to the requirement that institutions report certain business- or commercial-purpose transactions under Regulation C. SUPPLEMENTARY INFORMATION: I. Background A. HMDA and Regulation C HMDA requires certain depository institutions and for-profit nondepository institutions to collect, record, and report data about originations and purchases of mortgage loans, as well as mortgage loan applications that do not result in originations (for example, applications that are denied or withdrawn).1 By its statutory terms, HMDA defines ‘‘mortgage loan’’ as (1) ‘‘a loan which is secured by residential real property,’’ or (2) a ‘‘home improvement loan.’’ 2 The purposes of HMDA are 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 publicsector 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.3 Prior to the enactment of the DoddFrank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), Regulation C required reporting of 22 data points and allowed for optional reporting of reasons an institution denied an application.4 1 To simplify review of this document, the Bureau generally refers herein to the obligation to report data instead of listing all of these obligations in each instance. 2 12 U.S.C. 2802(a)(2). 3 12 CFR 1003.1. 4 As used in this document, the term ‘‘data point’’ refers to items of information that entities are required to compile and report, generally listed in separate paragraphs in Regulation C. Some data points are reported using multiple data fields. E:\FR\FM\08MYP1.SGM 08MYP1 20050 Federal Register / Vol. 84, No. 89 / Wednesday, May 8, 2019 / Proposed Rules khammond on DSKBBV9HB2PROD with PROPOSALS B. Dodd-Frank Act In 2010, Congress enacted the DoddFrank Act, which amended HMDA and transferred HMDA rulemaking authority and other functions from the Board of Governors of the Federal Reserve System (Board) to the Bureau.5 Among other changes, the Dodd-Frank Act expanded the scope of information relating to mortgage applications and loans that institutions must compile, maintain, and report under HMDA. Specifically, the Dodd-Frank Act amended HMDA section 304(b)(4) by adding one new data point, the age of loan applicants and mortgagors. The Dodd-Frank Act also added new HMDA section 304(b)(5) and (6), which requires the following additional new data points: Information relating to the total points and fees payable at origination (total loan costs or total points and fees); the difference between the annual percentage rate (APR) associated with the loan and a benchmark rate or rates for all loans (rate spread); the term of any prepayment penalty; the value of real property to be pledged as collateral; the term of the loan and of any introductory interest rate on the loan; the presence of contract terms allowing non-amortizing payments; the channel through which the application was made; and the credit scores of applicants and mortgagors.6 New HMDA section 304(b)(6) in addition authorizes the Bureau to require, ‘‘as [it] may determine to be appropriate,’’ a unique identifier that identifies the loan originator, a universal loan identifier (ULI), and the parcel number that corresponds to the real property pledged as collateral for the mortgage loan.7 New HMDA section 304(b)(5)(D) and (6)(J) further provides the Bureau with the authority to mandate reporting of ‘‘such other information as the Bureau may require.’’ 8 C. 2015 HMDA Rule, 2017 HMDA Rule, December 2017 Statement, and EGRRCPA In October 2015, the Bureau issued the 2015 HMDA Rule.9 Most of the 2015 HMDA Rule took effect on January 1, 2018.10 The 2015 HMDA Rule, among other things, implemented the new data points specified in the Dodd-Frank Act and re-adopted certain pre-existing data points added to Regulation C by the 5 Public Law 111–203, 124 Stat. 1376, 1980, 2035–38, 2097–101 (2010). 6 Dodd-Frank Act section 1094(3), amending HMDA section 304(b), 12 U.S.C. 2803(b). 7 Id. 8 Id. 9 Home Mortgage Disclosure (Regulation C), 80 FR 66128 (Oct. 28, 2015). 10 Id. at 66128, 66256–58. VerDate Sep<11>2014 16:31 May 07, 2019 Jkt 247001 Board. The 2015 HMDA Rule also added a number of additional data points pursuant to the Bureau’s discretionary authority under HMDA section 304(b)(5) and (6) and revised certain pre-existing data points to provide for greater specificity or additional information in reporting. The Bureau added the following data points to Regulation C to implement specific provisions added by the DoddFrank Act in HMDA section 304(b)(4), (5)(A) through (C), and (6)(A) through (I): ULI; 11 property address; age; rate spread for all loans; 12 credit score; total loan costs or total points and fees; prepayment penalty term; loan term; introductory rate period; non-amortizing features; property value; application channel; and mortgage loan originator identifier.13 The Bureau also re-adopted certain data points in the 2015 HMDA Rule that are substantially similar or identical to pre-existing data points added to Regulation C by the Board. These data points include the following: Application date; loan type; whether the application or covered loan involved a request for a preapproval of a home purchase loan under a preapproval program; construction method for the dwelling related to the subject property; 14 the amount of the covered loan or the amount applied for; the action taken by the financial institution and the date of the action taken; State; county; census tract; sex; income; type of purchaser; whether the loan is subject to the Home Ownership and Equity Protection Act of 1994 (HOEPA); lien status of the subject property; 15 and the total number of individual dwelling 11 Prior to the passage of the Dodd-Frank Act, the Board required reporting of an identifying number for the loan or application but did not require that the identifier be universal. HMDA section 304(b)(6)(G) requires reporting of, ‘‘as the Bureau may determine to be appropriate, a universal loan identifier.’’ 12 Prior to the passage of the Dodd-Frank Act, the Board required financial institutions to report rate spread for higher-priced mortgage loans. 67 FR 7222 (Feb. 15, 2002); 67 FR 43218 (June 27, 2002). HMDA section 304(b)(5)(B) requires reporting of rate spread for all loans. 13 12 CFR 1003.4(a)(1)(i), (a)(9)(i), (a)(10)(ii), and (a)(12), (15), (17), (22), (25) through (28), and (33) and (34). 14 Construction method and number of units, together, replaced property type, the pre-existing Regulation C data point; the information required by the new data points is very similar to what the Board required, but institutions now must report the precise number of units rather than categorizing dwellings into one-to-four family dwellings and multifamily dwellings. 15 The 2015 HMDA Rule extends the requirement to report lien status to purchased loans. 80 FR 66128, 66201 (Oct. 28, 2015). PO 00000 Frm 00008 Fmt 4702 Sfmt 4702 units contained in the dwelling related to the loan (number of units ).16 In other instances, the 2015 HMDA Rule revised pre-existing Regulation C data points established by the Board to require additional information be reported for those data points. Such revised data points include the following: The purpose of the loan or application; occupancy type; ethnicity; race; and legal entity identifier (LEI).17 Additionally, the Bureau added the following new data points in the 2015 HMDA Rule pursuant to its discretionary authority under HMDA section 304(b)(5) and (6): Reasons for denial of a loan application, which were optionally reported under the Board’s rule but became mandatory in the 2015 HMDA Rule; 18 the total origination charges associated with the loan; the total points paid to the lender to reduce the interest rate of the loan (discount points); the amount of lender credits; the interest rate applicable at closing or account opening; the debt-to-income ratio; the ratio of the total amount of debt secured by the property to the value of the property (combined loan-tovalue ratio); for transactions involving manufactured homes, whether the loan or application is or would have been secured by a manufactured home and land or by a manufactured home and not land (manufactured home secured property type); the land property interest for loans or applications related to manufactured housing (manufactured home land property interest); the number of individual dwellings units that are income-restricted pursuant to Federal, State, or local affordable housing programs (multifamily affordable units); information related to the automated underwriting system used in evaluating an application and the result generated by the automated underwriting system; whether the loan is a reverse mortgage; whether the loan is an open-end line of credit; and whether the loan is primarily for a business or commercial purpose.19 16 12 CFR 1003.4(a)(1)(ii), (a)(2), (4), (5), and (7), (a)(8)(i) and (ii), (a)(9)(ii), (a)(10)(i) and (iii), and (a)(11), (13) and (14), and (31). 17 12 CFR 1003.4(a)(3), (a)(6), (a)(10)(i); 12 CFR 1003.5(a)(3). 18 Financial institutions regulated by the Office of the Comptroller of the Currency (OCC) are also required to report reasons for denial on their HMDA loan/application registers pursuant to 12 CFR 27.3(a)(1)(i) and 128.6. Similarly, pursuant to regulations transferred from the Office of Thrift Supervision, certain financial institutions supervised by the Federal Deposit Insurance Corporation (FDIC) are required to report reasons for denial on their HMDA loan/application registers. 12 CFR 390.147. 19 12 CFR 1003.4(a)(16), (18) through (21), (23) and (24), (29) and (30), (32), and (35) through (38). E:\FR\FM\08MYP1.SGM 08MYP1 Federal Register / Vol. 84, No. 89 / Wednesday, May 8, 2019 / Proposed Rules khammond on DSKBBV9HB2PROD with PROPOSALS The 2015 HMDA Rule also requires reporting of applications for, and originations of, dwelling-secured business- or commercial-purpose closed-end mortgage loans and openend lines of credit for home purchase, refinancing, or home improvement purposes.20 Prior to the 2015 HMDA Rule, Regulation C covered closed-end, business- or commercial-purpose loans made to purchase, refinance, or improve a dwelling. Thus, the 2015 HMDA Rule revised coverage of business- or commercial-purpose transactions by: (1) Adding the dwelling-secured test, and (2) requiring reporting of dwellingsecured, business- or commercialpurpose open-end lines of credit for the purpose of home purchase, refinancing, or home improvement. Before institutions had to comply with the new and revised data reporting requirements in 2015 HMDA Rule, the Bureau in September 2017 issued a final rule amending certain aspects of the 2015 HMDA Rule (2017 HMDA Rule).21 Among other things, the 2017 HMDA Rule addressed certain technical errors in the 2015 HMDA Rule, eased the burden of reporting certain data requirements, and clarified key terms to facilitate compliance with Regulation C. The Bureau issued a statement in December 2017 (December 2017 Statement) in which it indicated that it intended to engage in a rulemaking to reconsider various aspects of the 2015 HMDA Rule, such as the institutional and transactional coverage tests and the rule’s discretionary data points.22 This ANPR is part of that rulemaking. 20 80 FR 66128, 66169–72 (Oct. 28, 2015). As used in Regulation C, the term dwelling includes a multifamily residential structure or community. 12 CFR 1003.2(f); comment 2(f)–2. 21 Home Mortgage Disclosure (Regulation C), 82 FR 43088 (Sept. 13, 2017). 22 Bureau of Consumer Fin. Prot., ‘‘Statement with Respect to HMDA Implementation’’ (Dec. 21, 2017), https://files.consumerfinance.gov/f/ documents/cfpb_statement-with-respect-to-hmdaimplementation_122017.pdf. Additionally, in recognition of the significant systems and operations challenges needed to adjust to the revised regulation, the December 2017 Statement indicated that, for HMDA data collected in 2018 and reported in 2019, the Bureau does not intend to require data resubmission unless data errors are material. The December 2017 Statement also explained that the Bureau does not intend to assess penalties with respect to errors in data collected in 2018 and reported in 2019. As explained in the statement, any supervisory examinations of 2018 HMDA data will be diagnostic to help institutions identify compliance weaknesses and will credit good-faith compliance efforts. The statement also indicated that collection and submission of the 2018 HMDA data will provide financial institutions an opportunity to identify any gaps in their implementation of amended Regulation C and make improvements in their HMDA compliance management systems for future years. The Board, the FDIC, the National Credit Union Administration, and the OCC released similar VerDate Sep<11>2014 16:31 May 07, 2019 Jkt 247001 On May 24, 2018, the President signed the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) into law.23 Section 104(a) of the EGRRCPA amends section 304(i) of HMDA by adding partial exemptions from HMDA’s requirements for certain transactions of insured depository institutions and insured credit unions. Certain of the data points about which the Bureau is soliciting information in this ANPR are covered under the EGRRCPA partial exemptions.24 D. Feedback Since Issuing 2015 HMDA Rule and 2017 HMDA Rule Since issuing the 2015 HMDA Rule and 2017 HMDA Rule, the Bureau has heard concerns about the burden associated with reporting certain of the new or revised data points relative to the value of the information in serving HMDA’s purposes. The Bureau has also heard continuing concerns about Regulation C’s coverage of certain business- or commercial-purpose loans. In addition, although the 2015 HMDA Rule was outside the scope of the Bureau’s Call for Evidence series of Requests for Information (RFIs) 25 issued in spring 2018, the Bureau received several comments regarding HMDA in response to the RFIs. The Bureau has considered those comments as well as other input it has received from stakeholders through its efforts to monitor and support industry implementation of the 2015 HMDA Rule and the 2017 HMDA Rule in developing this document. Among other things, some industry stakeholders have advised the Bureau that it is more burdensome to report information about whether a borrower owns or leases the land on which a manufactured home is located 26 than the Bureau anticipated in 2015 because such information is not generally collected in the ordinary course of business. Additionally, prior to the 2015 HMDA Rule, financial institutions were required to ask loan applicants to statements relating to their supervisory examinations. Id. 23 Public Law 115–174, 132 Stat. 1296 (2018). 24 See Partial Exemptions from the Requirements of the Home Mortgage Disclosure Act under the Economic Growth, Regulatory Relief, and Consumer Protection Act (Regulation C), 83 FR 45325, 45328– 29 (Sept. 7, 2018) (Bureau’s Interpretive and Procedural Rule clarifying and implementing EGRRCPA). 25 E.g., Request for Information Regarding the Bureau’s Adopted Regulations and New Rulemaking Authorities, 83 FR 12286 (Mar. 21, 2018); Request for Information Regarding the Bureau’s Inherited Regulations and Inherited Rulemaking Authorities, 83 FR 12881 (Mar. 26, 2018). 26 80 FR 66128, 66226–27 (Oct. 28, 2015). PO 00000 Frm 00009 Fmt 4702 Sfmt 4702 20051 identify their ethnicity using aggregate categories (Hispanic or Latino, not Hispanic or Latino) and to do the same for race (e.g., Asian). Pursuant to the 2015 HMDA Rule, institutions are now required to request that the applicant self-identify their ethnicity using disaggregated categories (e.g., Cuban or Mexican) and their race using disaggregated categories (e.g., Chinese or Korean) in addition to the pre-existing aggregate categories.27 Some financial institutions have stated that these new requirements can prolong and complicate the application process. In response to the Bureau’s RFIs, one credit union expressed concern about complying with the new disaggregated data field requirements. On the other hand, one community group stated that disaggregated data on race and ethnicity helps to identify predatory lending and that such data could have helped to avoid the negative impacts on many communities resulting from the housing crisis that began in 2007. The 2015 HMDA Rule also requires financial institutions to complete freeform text fields for certain data points if certain circumstances are met. For example, the 2015 HMDA Rule made reporting of reasons for denial mandatory and provides various reporting options from which financial institutions may choose.28 The 2015 HMDA Rule requires that financial institutions include a reason for loan denial in a free-form text data field if the institution chooses the option of ‘‘Other.’’ 29 Several financial institutions have expressed that using this free-form text field can be a cumbersome process. Additionally, in the past year the Bureau has heard from several industry stakeholders requesting that the Bureau should exclude from Regulation C’s coverage business- or commercialpurpose loans made to a non-natural person and secured by a multifamily dwelling. For example, in response to the Bureau’s RFIs a few industry commenters stated that requiring reporting of such transactions is not necessary to fulfilling the purposes of HMDA and that the burden of reporting them does not outweigh the benefits of doing so. II. Request for Comment The Bureau is issuing this ANPR to solicit comments relating to whether to make changes to (1) the data points that the 2015 HMDA Rule added to Regulation C or revised to require additional information, and (2) 27 Id. at 66187–94. at 66205. 29 Id. at 66205–6. 28 Id. E:\FR\FM\08MYP1.SGM 08MYP1 20052 Federal Register / Vol. 84, No. 89 / Wednesday, May 8, 2019 / Proposed Rules relating to whether to make changes to the data points that the 2015 HMDA Rule added to Regulation C or revised to require additional information.30 One of the Bureau’s goals in gathering information in this ANPR is to ensure that the data requirements established in the 2015 HMDA Rule appropriately balance the benefits and burdens associated with data reporting. Financial institutions were required to report their first data pursuant to the 2015 HMDA Rule by March 1, 2019. Now that financial institutions have completed their first submissions of the additional information required under Regulation C’s coverage of business- or commercial-purpose loans made to a non-natural person and secured by a multifamily dwelling. The Bureau will carefully consider the public’s input as it determines whether to formulate a proposed rule relating to changing any of these data points from the 2015 HMDA Rule and in deciding whether to address certain business- or commercial-purpose transactions as part of any upcoming rulemaking. A. Data Points Required by 2015 HMDA Rule The Bureau is soliciting comment, data, and information from the public the 2015 HMDA Rule and institutionspecific submissions are available to the public, the Bureau believes that they and other stakeholders may have additional and more accurate information to offer relating to the benefits and burdens associated with the data points required by the 2015 HMDA Rule. Below is a table that lists the data points that the Bureau added or revised to require additional information pursuant to the 2015 HMDA Rule. TABLE 1—DATA POINTS ADDED OR REVISED TO REQUIRE ADDITIONAL INFORMATION PURSUANT TO THE 2015 HMDA RULE khammond on DSKBBV9HB2PROD with PROPOSALS • • • • • • • • • • • • • Data points added by 2015 HMDA Rule to implement Dodd-Frank Act requirements Data points added by 2015 HMDA Rule pursuant to discretionary authority Universal Loan Identifies (ULI) Property Address Age Rate Spread for all loans Credit Score Total Loan Cost or Total Points and Fees Prepayment Penalty Term Loan Term Introductory Rate Period Non-Amortizing Features Property Value Application Channel Mortgage Loan Originator Identifier • • • • • • • • • • • • • • Reasons for Denial Origination Charges Discount Points Lender Credits Interest Rate Debt-to-Income Ratio Combined Loan to Value Ratio Manufactured Home Secured Property Type Manufactured Home Land Property Interest Multifamily Affordable Units Automated Underwriting System Reverse Mortgage Flag Open-End Line of Credit Flag Business or Commercial Purpose Flag Data points revised by 2015 HMDA Rule to require additional information • • • • • Loan Purpose Occupancy Type Ethnicity Race Legal Entity Identifier (LEI) The Bureau encourages commenters to be specific and, where possible, to include any relevant empirical evidence. Comment is requested from all interested parties on the following four topics: 1. Please identify any new data point or any data point revised to require additional information from the table above for which the cost of collecting and reporting the information does not justify the benefit that the information collected and reported provides in furthering the purposes of HMDA. For each such data point: i. Please describe the nature and magnitude of any operational challenges in collecting and reporting the required information. ii. What ongoing costs are incurred in collecting and reporting the required information? Has the Bureau’s new webbased data submission and edit-check system affected ongoing costs of collecting and reporting the required information? If so, how and how much? To what extent are the data point’s requirements aligned with industry standards, and how does that affect ongoing costs of collecting and reporting the required information? iii. Would financial institutions generally collect the required information in the ordinary course of business absent Regulation C requirements? If so, what are the incremental costs associated with reporting the required information? If not, what are the costs associated with collecting and reporting the required information? iv. How much value does the data point provide in furthering the purposes of HMDA? 2. The 2015 HMDA Rule requires financial institutions to complete freeform text fields for certain data points when certain circumstances are met. For each free-form text field required by the 2015 HMDA Rule: i. What are the costs of providing information through the free-form text field? ii. What are the benefits of providing information through the free-form text field? iii. Are there better alternatives to providing information than through the free-form text field? 3. Are there other considerations the Bureau should take into account in deciding whether to propose to eliminate or revise any new data point or revised data point from the 2015 HMDA Rule? 4. Are there new or revised data points under the 2015 HMDA Rule for which more explanation is needed to clarify the collection and reporting requirements? If so, please identify any data point for which additional clarity could reduce the costs associated with collecting and reporting the data and improve the value of the data in furthering the purposes of HMDA. 30 As discussed above in part I.C, many of the data points in the 2015 HMDA Rule implement data points specified in the Dodd-Frank Act or re-adopt pre-existing data points added to Regulation C by the Board. Other data points, however, were added pursuant to the Bureau’s discretionary authority provided by the Dodd-Frank Act or revise preexisting data points to require additional information. The type or extent of changes the Bureau may propose relating to any of these data points in a future notice of proposed rulemaking may vary depending on the category under which the data point falls. VerDate Sep<11>2014 16:31 May 07, 2019 Jkt 247001 PO 00000 Frm 00010 Fmt 4702 Sfmt 4702 E:\FR\FM\08MYP1.SGM 08MYP1 Federal Register / Vol. 84, No. 89 / Wednesday, May 8, 2019 / Proposed Rules B. Coverage of Certain Business- or Commercial-Purpose Transactions The Bureau seeks to assess the extent to which requiring reporting of information on business- or commercialpurpose loans made to a non-natural person and secured by a multifamily dwelling imposes burdens on financial institutions and furthers HMDA’s purposes.31 The Bureau seeks information that might assist the Bureau in deciding whether to propose to exclude such transactions from HMDA’s requirements, including information about the following: 5. The value that data on such transactions provides in serving HMDA’s purposes; 6. Other benefits associated with reporting such transactions; and 7. The burden imposed by the requirement to report data on such transactions. Dated: April 26, 2019. Kathleen L. Kraninger, Director, Bureau of Consumer Financial Protection. [FR Doc. 2019–08979 Filed 5–7–19; 8:45 am] BILLING CODE 4810–AM–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 25 [Docket No. FAA–2018–1016; Notice No. 25– 19–06–SC] Special Conditions: The Boeing Company Model 777–9 Airplane; Electronic Flight-Control System and Control-Surface-Position Awareness Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed special conditions. AGENCY: This action proposes special conditions for The Boeing Company (Boeing) Model 777–9 airplane. This airplane will have a novel or unusual design feature when compared to the state of technology envisioned in the airworthiness standards for transportcategory airplanes. This design feature is an electronic flight-control system requiring control-surface-position khammond on DSKBBV9HB2PROD with PROPOSALS SUMMARY: 31 HMDA’s purposes are: (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. 12 CFR 1003.1. VerDate Sep<11>2014 16:31 May 07, 2019 Jkt 247001 awareness. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These proposed special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards. DATES: Send comments on or before June 24, 2019. ADDRESSES: Send comments identified by Docket No. FAA–2018–1016 using any of the following methods: • Federal eRegulations Portal: Go to http://www.regulations.gov/ and follow the online instructions for sending your comments electronically. • Mail: Send comments to Docket Operations, M–30, U.S. Department of Transportation (DOT), 1200 New Jersey Avenue SE, Room W12–140, West Building Ground Floor, Washington, DC 20590–0001. • Hand Delivery or Courier: Take comments to Docket Operations in Room W12–140 of the West Building Ground Floor at 1200 New Jersey Avenue SE, Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. • Fax: Fax comments to Docket Operations at 202–493–2251. Privacy: The FAA will post all comments it receives, without change, to http://www.regulations.gov/, including any personal information the commenter provides. Using the search function of the docket website, anyone can find and read the electronic form of all comments received into any FAA docket, including the name of the individual sending the comment (or signing the comment for an association, business, labor union, etc.). DOT’s complete Privacy Act Statement can be found in the Federal Register published on April 11, 2000 (65 FR 19477–19478). Docket: Background documents or comments received may be read at http://www.regulations.gov/ at any time. Follow the online instructions for accessing the docket or go to Docket Operations in Room W12–140 of the West Building Ground Floor at 1200 New Jersey Avenue SE, Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: Joe Jacobsen, Airplane & Flight Crew Interface Section, AIR–671, Transport Standards Branch, Policy and Innovation Division, Aircraft Certification Service, Federal Aviation Administration, 2200 South 216th Street, Des Moines, Washington 98198; telephone: 206–231–3158; email: joe.jacobsen@faa.gov. PO 00000 Frm 00011 Fmt 4702 Sfmt 4702 20053 SUPPLEMENTARY INFORMATION: Comments Invited We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data. We will consider all comments we receive by the closing date for comments. We may change these special conditions based on the comments we receive. Background On December 6, 2013, Boeing applied for an amendment to Type Certificate No. T00001SE to include the new 777– 9 airplane. This airplane, which is a derivative of the Boeing Model 777 airplane currently approved under Type Certificate No. T00001SE, is a twinengine, transport-category airplane with seating for 495 passengers and a maximum takeoff weight of 775,000 pounds. Type Certification Basis Under the provisions of title 14, Code of Federal Regulations (14 CFR) 21.101, Boeing must show that the Model 777– 9 airplane meets the applicable provisions of the regulations listed in Type Certificate No. T00001SE, or the applicable regulations in effect on the date of application for the change, except for earlier amendments as agreed upon by the FAA. If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR part 25) do not contain adequate or appropriate safety standards for the Boeing Model 777–9 airplane because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16. Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, or should any other model already included on the same type certificate be modified to incorporate the same novel or unusual design feature, these special conditions would also apply to the other model under § 21.101. In addition to the applicable airworthiness regulations and special conditions, the Boeing Model 777–9 airplane must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34, and the noise- E:\FR\FM\08MYP1.SGM 08MYP1

Agencies

[Federal Register Volume 84, Number 89 (Wednesday, May 8, 2019)]
[Proposed Rules]
[Pages 20049-20053]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-08979]


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BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1003

[Docket No. CFPB-2019-0020]
RIN 3170-AA97


Home Mortgage Disclosure (Regulation C) Data Points and Coverage

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is 
issuing this Advance Notice of Proposed Rulemaking (ANPR) to solicit 
comments relating to whether to make changes to the data points that 
the Bureau's October 2015 final rule implementing the Home Mortgage 
Disclosure Act (HMDA) added to Regulation C or revised to require 
additional information. Additionally, the Bureau is issuing this ANPR 
to solicit comments relating to the requirement that institutions 
report certain business- or commercial-purpose transactions under 
Regulation C.

DATES: Comments must be received by July 8, 2019.

ADDRESSES: You may submit responsive information and other comments, 
identified by Docket No. CFPB-2019-0020, by any of the following 
methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: [email protected]. Include Docket No. CFPB-
2019-0020 in the subject line of the message.
     Mail: Comment Intake, Bureau of Consumer Financial 
Protection, 1700 G Street NW, Washington, DC 20552.
     Hand Delivery/Courier: Comment Intake, Bureau of Consumer 
Financial Protection, 1700 G Street NW, Washington, DC 20552.
    Instructions: When responding to a particular question, please note 
the question number at the top of the response.
    You are not required to answer all questions to receive 
consideration of your comments. The Bureau encourages the early 
submission of comments. All submissions must include the document title 
and docket number.
    Because paper mail in the Washington, DC area and at the Bureau is 
subject to delay, commenters are encouraged to submit comments 
electronically. In general, all comments received will be posted 
without change to http://www.regulations.gov. In addition, comments 
will be available for public inspection and copying at 1700 G Street 
NW, Washington, DC 20552, on official business days between the hours 
of 10:00 a.m. and 5:00 p.m. eastern daylight time. You can make an 
appointment to inspect the documents by telephoning 202-435-7275.
    All submissions, 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, or names of other individuals, should not be 
included. Submissions will not be edited to remove any identifying or 
contact information.
    The Bureau invites comment on all aspects of the ANPR from all 
interested parties. In the event that a respondent may have concerns 
about revealing proprietary or personal information, the Bureau 
welcomes comments from attorneys, consumer advocacy organizations, 
trade associations, or other representatives that do not identify their 
clients.

FOR FURTHER INFORMATION CONTACT: Jaydee DiGiovanni or Shaakira Gold-
Ramirez, Counsels; or Amanda Quester or Alexandra Reimelt, Senior 
Counsels, Office of Regulations, at 202-435-7700 or https://reginquiries.consumerfinance.gov. If you require this document in an 
alternative electronic format, please contact 
[email protected].

SUPPLEMENTARY INFORMATION: The Bureau is issuing this ANPR to solicit 
information relating to whether to make changes to the data points that 
the Bureau's October 2015 final rule implementing HMDA (2015 HMDA Rule) 
added to Regulation C or revised to require additional information. The 
Bureau also seeks comments relating to the requirement that 
institutions report certain business- or commercial-purpose 
transactions under Regulation C.

I. Background

A. HMDA and Regulation C

    HMDA requires certain depository institutions and for-profit 
nondepository institutions to collect, record, and report data about 
originations and purchases of mortgage loans, as well as mortgage loan 
applications that do not result in originations (for example, 
applications that are denied or withdrawn).\1\ By its statutory terms, 
HMDA defines ``mortgage loan'' as (1) ``a loan which is secured by 
residential real property,'' or (2) a ``home improvement loan.'' \2\ 
The purposes of HMDA are 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.\3\ Prior to the enactment of the Dodd-
Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), 
Regulation C required reporting of 22 data points and allowed for 
optional reporting of reasons an institution denied an application.\4\
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    \1\ To simplify review of this document, the Bureau generally 
refers herein to the obligation to report data instead of listing 
all of these obligations in each instance.
    \2\ 12 U.S.C. 2802(a)(2).
    \3\ 12 CFR 1003.1.
    \4\ As used in this document, the term ``data point'' refers to 
items of information that entities are required to compile and 
report, generally listed in separate paragraphs in Regulation C. 
Some data points are reported using multiple data fields.

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[[Page 20050]]

B. Dodd-Frank Act

    In 2010, Congress enacted the Dodd-Frank Act, which amended HMDA 
and transferred HMDA rulemaking authority and other functions from the 
Board of Governors of the Federal Reserve System (Board) to the 
Bureau.\5\ Among other changes, the Dodd-Frank Act expanded the scope 
of information relating to mortgage applications and loans that 
institutions must compile, maintain, and report under HMDA. 
Specifically, the Dodd-Frank Act amended HMDA section 304(b)(4) by 
adding one new data point, the age of loan applicants and mortgagors. 
The Dodd-Frank Act also added new HMDA section 304(b)(5) and (6), which 
requires the following additional new data points: Information relating 
to the total points and fees payable at origination (total loan costs 
or total points and fees); the difference between the annual percentage 
rate (APR) associated with the loan and a benchmark rate or rates for 
all loans (rate spread); the term of any prepayment penalty; the value 
of real property to be pledged as collateral; the term of the loan and 
of any introductory interest rate on the loan; the presence of contract 
terms allowing non-amortizing payments; the channel through which the 
application was made; and the credit scores of applicants and 
mortgagors.\6\ New HMDA section 304(b)(6) in addition authorizes the 
Bureau to require, ``as [it] may determine to be appropriate,'' a 
unique identifier that identifies the loan originator, a universal loan 
identifier (ULI), and the parcel number that corresponds to the real 
property pledged as collateral for the mortgage loan.\7\ New HMDA 
section 304(b)(5)(D) and (6)(J) further provides the Bureau with the 
authority to mandate reporting of ``such other information as the 
Bureau may require.'' \8\
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    \5\ Public Law 111-203, 124 Stat. 1376, 1980, 2035-38, 2097-101 
(2010).
    \6\ Dodd-Frank Act section 1094(3), amending HMDA section 
304(b), 12 U.S.C. 2803(b).
    \7\ Id.
    \8\ Id.
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C. 2015 HMDA Rule, 2017 HMDA Rule, December 2017 Statement, and EGRRCPA

    In October 2015, the Bureau issued the 2015 HMDA Rule.\9\ Most of 
the 2015 HMDA Rule took effect on January 1, 2018.\10\ The 2015 HMDA 
Rule, among other things, implemented the new data points specified in 
the Dodd-Frank Act and re-adopted certain pre-existing data points 
added to Regulation C by the Board. The 2015 HMDA Rule also added a 
number of additional data points pursuant to the Bureau's discretionary 
authority under HMDA section 304(b)(5) and (6) and revised certain pre-
existing data points to provide for greater specificity or additional 
information in reporting.
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    \9\ Home Mortgage Disclosure (Regulation C), 80 FR 66128 (Oct. 
28, 2015).
    \10\ Id. at 66128, 66256-58.
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    The Bureau added the following data points to Regulation C to 
implement specific provisions added by the Dodd-Frank Act in HMDA 
section 304(b)(4), (5)(A) through (C), and (6)(A) through (I): ULI; 
\11\ property address; age; rate spread for all loans; \12\ credit 
score; total loan costs or total points and fees; prepayment penalty 
term; loan term; introductory rate period; non-amortizing features; 
property value; application channel; and mortgage loan originator 
identifier.\13\
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    \11\ Prior to the passage of the Dodd-Frank Act, the Board 
required reporting of an identifying number for the loan or 
application but did not require that the identifier be universal. 
HMDA section 304(b)(6)(G) requires reporting of, ``as the Bureau may 
determine to be appropriate, a universal loan identifier.''
    \12\ Prior to the passage of the Dodd-Frank Act, the Board 
required financial institutions to report rate spread for higher-
priced mortgage loans. 67 FR 7222 (Feb. 15, 2002); 67 FR 43218 (June 
27, 2002). HMDA section 304(b)(5)(B) requires reporting of rate 
spread for all loans.
    \13\ 12 CFR 1003.4(a)(1)(i), (a)(9)(i), (a)(10)(ii), and 
(a)(12), (15), (17), (22), (25) through (28), and (33) and (34).
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    The Bureau also re-adopted certain data points in the 2015 HMDA 
Rule that are substantially similar or identical to pre-existing data 
points added to Regulation C by the Board. These data points include 
the following: Application date; loan type; whether the application or 
covered loan involved a request for a preapproval of a home purchase 
loan under a preapproval program; construction method for the dwelling 
related to the subject property; \14\ the amount of the covered loan or 
the amount applied for; the action taken by the financial institution 
and the date of the action taken; State; county; census tract; sex; 
income; type of purchaser; whether the loan is subject to the Home 
Ownership and Equity Protection Act of 1994 (HOEPA); lien status of the 
subject property; \15\ and the total number of individual dwelling 
units contained in the dwelling related to the loan (number of units 
).\16\
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    \14\ Construction method and number of units, together, replaced 
property type, the pre-existing Regulation C data point; the 
information required by the new data points is very similar to what 
the Board required, but institutions now must report the precise 
number of units rather than categorizing dwellings into one-to-four 
family dwellings and multifamily dwellings.
    \15\ The 2015 HMDA Rule extends the requirement to report lien 
status to purchased loans. 80 FR 66128, 66201 (Oct. 28, 2015).
    \16\ 12 CFR 1003.4(a)(1)(ii), (a)(2), (4), (5), and (7), 
(a)(8)(i) and (ii), (a)(9)(ii), (a)(10)(i) and (iii), and (a)(11), 
(13) and (14), and (31).
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    In other instances, the 2015 HMDA Rule revised pre-existing 
Regulation C data points established by the Board to require additional 
information be reported for those data points. Such revised data points 
include the following: The purpose of the loan or application; 
occupancy type; ethnicity; race; and legal entity identifier (LEI).\17\
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    \17\ 12 CFR 1003.4(a)(3), (a)(6), (a)(10)(i); 12 CFR 
1003.5(a)(3).
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    Additionally, the Bureau added the following new data points in the 
2015 HMDA Rule pursuant to its discretionary authority under HMDA 
section 304(b)(5) and (6): Reasons for denial of a loan application, 
which were optionally reported under the Board's rule but became 
mandatory in the 2015 HMDA Rule; \18\ the total origination charges 
associated with the loan; the total points paid to the lender to reduce 
the interest rate of the loan (discount points); the amount of lender 
credits; the interest rate applicable at closing or account opening; 
the debt-to-income ratio; the ratio of the total amount of debt secured 
by the property to the value of the property (combined loan-to-value 
ratio); for transactions involving manufactured homes, whether the loan 
or application is or would have been secured by a manufactured home and 
land or by a manufactured home and not land (manufactured home secured 
property type); the land property interest for loans or applications 
related to manufactured housing (manufactured home land property 
interest); the number of individual dwellings units that are income-
restricted pursuant to Federal, State, or local affordable housing 
programs (multifamily affordable units); information related to the 
automated underwriting system used in evaluating an application and the 
result generated by the automated underwriting system; whether the loan 
is a reverse mortgage; whether the loan is an open-end line of credit; 
and whether the loan is primarily for a business or commercial 
purpose.\19\
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    \18\ Financial institutions regulated by the Office of the 
Comptroller of the Currency (OCC) are also required to report 
reasons for denial on their HMDA loan/application registers pursuant 
to 12 CFR 27.3(a)(1)(i) and 128.6. Similarly, pursuant to 
regulations transferred from the Office of Thrift Supervision, 
certain financial institutions supervised by the Federal Deposit 
Insurance Corporation (FDIC) are required to report reasons for 
denial on their HMDA loan/application registers. 12 CFR 390.147.
    \19\ 12 CFR 1003.4(a)(16), (18) through (21), (23) and (24), 
(29) and (30), (32), and (35) through (38).

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[[Page 20051]]

    The 2015 HMDA Rule also requires reporting of applications for, and 
originations of, dwelling-secured business- or commercial-purpose 
closed-end mortgage loans and open-end lines of credit for home 
purchase, refinancing, or home improvement purposes.\20\ Prior to the 
2015 HMDA Rule, Regulation C covered closed-end, business- or 
commercial-purpose loans made to purchase, refinance, or improve a 
dwelling. Thus, the 2015 HMDA Rule revised coverage of business- or 
commercial-purpose transactions by: (1) Adding the dwelling-secured 
test, and (2) requiring reporting of dwelling-secured, business- or 
commercial-purpose open-end lines of credit for the purpose of home 
purchase, refinancing, or home improvement.
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    \20\ 80 FR 66128, 66169-72 (Oct. 28, 2015). As used in 
Regulation C, the term dwelling includes a multifamily residential 
structure or community. 12 CFR 1003.2(f); comment 2(f)-2.
---------------------------------------------------------------------------

    Before institutions had to comply with the new and revised data 
reporting requirements in 2015 HMDA Rule, the Bureau in September 2017 
issued a final rule amending certain aspects of the 2015 HMDA Rule 
(2017 HMDA Rule).\21\ Among other things, the 2017 HMDA Rule addressed 
certain technical errors in the 2015 HMDA Rule, eased the burden of 
reporting certain data requirements, and clarified key terms to 
facilitate compliance with Regulation C.
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    \21\ Home Mortgage Disclosure (Regulation C), 82 FR 43088 (Sept. 
13, 2017).
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    The Bureau issued a statement in December 2017 (December 2017 
Statement) in which it indicated that it intended to engage in a 
rulemaking to reconsider various aspects of the 2015 HMDA Rule, such as 
the institutional and transactional coverage tests and the rule's 
discretionary data points.\22\ This ANPR is part of that rulemaking.
---------------------------------------------------------------------------

    \22\ Bureau of Consumer Fin. Prot., ``Statement with Respect to 
HMDA Implementation'' (Dec. 21, 2017), https://files.consumerfinance.gov/f/documents/cfpb_statement-with-respect-to-hmda-implementation_122017.pdf. Additionally, in recognition of 
the significant systems and operations challenges needed to adjust 
to the revised regulation, the December 2017 Statement indicated 
that, for HMDA data collected in 2018 and reported in 2019, the 
Bureau does not intend to require data resubmission unless data 
errors are material. The December 2017 Statement also explained that 
the Bureau does not intend to assess penalties with respect to 
errors in data collected in 2018 and reported in 2019. As explained 
in the statement, any supervisory examinations of 2018 HMDA data 
will be diagnostic to help institutions identify compliance 
weaknesses and will credit good-faith compliance efforts. The 
statement also indicated that collection and submission of the 2018 
HMDA data will provide financial institutions an opportunity to 
identify any gaps in their implementation of amended Regulation C 
and make improvements in their HMDA compliance management systems 
for future years. The Board, the FDIC, the National Credit Union 
Administration, and the OCC released similar statements relating to 
their supervisory examinations. Id.
---------------------------------------------------------------------------

    On May 24, 2018, the President signed the Economic Growth, 
Regulatory Relief, and Consumer Protection Act (EGRRCPA) into law.\23\ 
Section 104(a) of the EGRRCPA amends section 304(i) of HMDA by adding 
partial exemptions from HMDA's requirements for certain transactions of 
insured depository institutions and insured credit unions. Certain of 
the data points about which the Bureau is soliciting information in 
this ANPR are covered under the EGRRCPA partial exemptions.\24\
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    \23\ Public Law 115-174, 132 Stat. 1296 (2018).
    \24\ See Partial Exemptions from the Requirements of the Home 
Mortgage Disclosure Act under the Economic Growth, Regulatory 
Relief, and Consumer Protection Act (Regulation C), 83 FR 45325, 
45328-29 (Sept. 7, 2018) (Bureau's Interpretive and Procedural Rule 
clarifying and implementing EGRRCPA).
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D. Feedback Since Issuing 2015 HMDA Rule and 2017 HMDA Rule

    Since issuing the 2015 HMDA Rule and 2017 HMDA Rule, the Bureau has 
heard concerns about the burden associated with reporting certain of 
the new or revised data points relative to the value of the information 
in serving HMDA's purposes. The Bureau has also heard continuing 
concerns about Regulation C's coverage of certain business- or 
commercial-purpose loans. In addition, although the 2015 HMDA Rule was 
outside the scope of the Bureau's Call for Evidence series of Requests 
for Information (RFIs) \25\ issued in spring 2018, the Bureau received 
several comments regarding HMDA in response to the RFIs. The Bureau has 
considered those comments as well as other input it has received from 
stakeholders through its efforts to monitor and support industry 
implementation of the 2015 HMDA Rule and the 2017 HMDA Rule in 
developing this document.
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    \25\ E.g., Request for Information Regarding the Bureau's 
Adopted Regulations and New Rulemaking Authorities, 83 FR 12286 
(Mar. 21, 2018); Request for Information Regarding the Bureau's 
Inherited Regulations and Inherited Rulemaking Authorities, 83 FR 
12881 (Mar. 26, 2018).
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    Among other things, some industry stakeholders have advised the 
Bureau that it is more burdensome to report information about whether a 
borrower owns or leases the land on which a manufactured home is 
located \26\ than the Bureau anticipated in 2015 because such 
information is not generally collected in the ordinary course of 
business. Additionally, prior to the 2015 HMDA Rule, financial 
institutions were required to ask loan applicants to identify their 
ethnicity using aggregate categories (Hispanic or Latino, not Hispanic 
or Latino) and to do the same for race (e.g., Asian). Pursuant to the 
2015 HMDA Rule, institutions are now required to request that the 
applicant self-identify their ethnicity using disaggregated categories 
(e.g., Cuban or Mexican) and their race using disaggregated categories 
(e.g., Chinese or Korean) in addition to the pre-existing aggregate 
categories.\27\ Some financial institutions have stated that these new 
requirements can prolong and complicate the application process. In 
response to the Bureau's RFIs, one credit union expressed concern about 
complying with the new disaggregated data field requirements. On the 
other hand, one community group stated that disaggregated data on race 
and ethnicity helps to identify predatory lending and that such data 
could have helped to avoid the negative impacts on many communities 
resulting from the housing crisis that began in 2007.
---------------------------------------------------------------------------

    \26\ 80 FR 66128, 66226-27 (Oct. 28, 2015).
    \27\ Id. at 66187-94.
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    The 2015 HMDA Rule also requires financial institutions to complete 
free-form text fields for certain data points if certain circumstances 
are met. For example, the 2015 HMDA Rule made reporting of reasons for 
denial mandatory and provides various reporting options from which 
financial institutions may choose.\28\ The 2015 HMDA Rule requires that 
financial institutions include a reason for loan denial in a free-form 
text data field if the institution chooses the option of ``Other.'' 
\29\ Several financial institutions have expressed that using this 
free-form text field can be a cumbersome process.
---------------------------------------------------------------------------

    \28\ Id. at 66205.
    \29\ Id. at 66205-6.
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    Additionally, in the past year the Bureau has heard from several 
industry stakeholders requesting that the Bureau should exclude from 
Regulation C's coverage business- or commercial-purpose loans made to a 
non-natural person and secured by a multifamily dwelling. For example, 
in response to the Bureau's RFIs a few industry commenters stated that 
requiring reporting of such transactions is not necessary to fulfilling 
the purposes of HMDA and that the burden of reporting them does not 
outweigh the benefits of doing so.

II. Request for Comment

    The Bureau is issuing this ANPR to solicit comments relating to 
whether to make changes to (1) the data points that the 2015 HMDA Rule 
added to Regulation C or revised to require additional information, and 
(2)

[[Page 20052]]

Regulation C's coverage of business- or commercial-purpose loans made 
to a non-natural person and secured by a multifamily dwelling. The 
Bureau will carefully consider the public's input as it determines 
whether to formulate a proposed rule relating to changing any of these 
data points from the 2015 HMDA Rule and in deciding whether to address 
certain business- or commercial-purpose transactions as part of any 
upcoming rulemaking.

A. Data Points Required by 2015 HMDA Rule

    The Bureau is soliciting comment, data, and information from the 
public relating to whether to make changes to the data points that the 
2015 HMDA Rule added to Regulation C or revised to require additional 
information.\30\ One of the Bureau's goals in gathering information in 
this ANPR is to ensure that the data requirements established in the 
2015 HMDA Rule appropriately balance the benefits and burdens 
associated with data reporting. Financial institutions were required to 
report their first data pursuant to the 2015 HMDA Rule by March 1, 
2019. Now that financial institutions have completed their first 
submissions of the additional information required under the 2015 HMDA 
Rule and institution-specific submissions are available to the public, 
the Bureau believes that they and other stakeholders may have 
additional and more accurate information to offer relating to the 
benefits and burdens associated with the data points required by the 
2015 HMDA Rule. Below is a table that lists the data points that the 
Bureau added or revised to require additional information pursuant to 
the 2015 HMDA Rule.
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    \30\ As discussed above in part I.C, many of the data points in 
the 2015 HMDA Rule implement data points specified in the Dodd-Frank 
Act or re-adopt pre-existing data points added to Regulation C by 
the Board. Other data points, however, were added pursuant to the 
Bureau's discretionary authority provided by the Dodd-Frank Act or 
revise pre-existing data points to require additional information. 
The type or extent of changes the Bureau may propose relating to any 
of these data points in a future notice of proposed rulemaking may 
vary depending on the category under which the data point falls.

     Table 1--Data Points Added or Revised To Require Additional Information Pursuant to the 2015 HMDA Rule
----------------------------------------------------------------------------------------------------------------
Data points added by 2015 HMDA Rule                                            Data points revised by 2015 HMDA
    to implement Dodd-Frank Act        Data points added by 2015 HMDA Rule        Rule to require additional
            requirements               pursuant to discretionary authority               information
----------------------------------------------------------------------------------------------------------------
 Universal Loan Identifies    Reasons for Denial              Loan Purpose
 (ULI)
 Property Address             Origination Charges             Occupancy Type
 Age                          Discount Points                 Ethnicity
 Rate Spread for all loans    Lender Credits                  Race
 Credit Score                 Interest Rate                   Legal Entity Identifier
                                                                              (LEI)
 Total Loan Cost or Total     Debt-to-Income Ratio
 Points and Fees
 Prepayment Penalty Term      Combined Loan to Value Ratio
 Loan Term                    Manufactured Home Secured
                                      Property Type
 Introductory Rate Period     Manufactured Home Land
                                      Property Interest
 Non-Amortizing Features      Multifamily Affordable Units
 Property Value               Automated Underwriting System
 Application Channel          Reverse Mortgage Flag
 Mortgage Loan Originator     Open-End Line of Credit Flag
 Identifier                           Business or Commercial
                                      Purpose Flag
----------------------------------------------------------------------------------------------------------------

    The Bureau encourages commenters to be specific and, where 
possible, to include any relevant empirical evidence. Comment is 
requested from all interested parties on the following four topics:
    1. Please identify any new data point or any data point revised to 
require additional information from the table above for which the cost 
of collecting and reporting the information does not justify the 
benefit that the information collected and reported provides in 
furthering the purposes of HMDA. For each such data point:
    i. Please describe the nature and magnitude of any operational 
challenges in collecting and reporting the required information.
    ii. What ongoing costs are incurred in collecting and reporting the 
required information? Has the Bureau's new web-based data submission 
and edit-check system affected ongoing costs of collecting and 
reporting the required information? If so, how and how much? To what 
extent are the data point's requirements aligned with industry 
standards, and how does that affect ongoing costs of collecting and 
reporting the required information?
    iii. Would financial institutions generally collect the required 
information in the ordinary course of business absent Regulation C 
requirements? If so, what are the incremental costs associated with 
reporting the required information? If not, what are the costs 
associated with collecting and reporting the required information?
    iv. How much value does the data point provide in furthering the 
purposes of HMDA?
    2. The 2015 HMDA Rule requires financial institutions to complete 
free-form text fields for certain data points when certain 
circumstances are met. For each free-form text field required by the 
2015 HMDA Rule:
    i. What are the costs of providing information through the free-
form text field?
    ii. What are the benefits of providing information through the 
free-form text field?
    iii. Are there better alternatives to providing information than 
through the free-form text field?
    3. Are there other considerations the Bureau should take into 
account in deciding whether to propose to eliminate or revise any new 
data point or revised data point from the 2015 HMDA Rule?
    4. Are there new or revised data points under the 2015 HMDA Rule 
for which more explanation is needed to clarify the collection and 
reporting requirements? If so, please identify any data point for which 
additional clarity could reduce the costs associated with collecting 
and reporting the data and improve the value of the data in furthering 
the purposes of HMDA.

[[Page 20053]]

B. Coverage of Certain Business- or Commercial-Purpose Transactions

    The Bureau seeks to assess the extent to which requiring reporting 
of information on business- or commercial-purpose loans made to a non-
natural person and secured by a multifamily dwelling imposes burdens on 
financial institutions and furthers HMDA's purposes.\31\
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    \31\ HMDA's purposes are: (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. 12 CFR 1003.1.
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    The Bureau seeks information that might assist the Bureau in 
deciding whether to propose to exclude such transactions from HMDA's 
requirements, including information about the following:
    5. The value that data on such transactions provides in serving 
HMDA's purposes;
    6. Other benefits associated with reporting such transactions; and
    7. The burden imposed by the requirement to report data on such 
transactions.

    Dated: April 26, 2019.
Kathleen L. Kraninger,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2019-08979 Filed 5-7-19; 8:45 am]
BILLING CODE 4810-AM-P