Appraisals for Higher-Priced Mortgage Loans Exemption Threshold, 58013-58017 [2019-21559]
Download as PDF
<![CDATA[
Federal Register / Vol. 84, No. 210 / Wednesday, October 30, 2019 / Rules and Regulations
the OHA without prejudice, and the
same basis for dismissal without
prejudice exists upon refiling by the
same petitioner.
(b) Dismissal without prejudice. The
dismissal of a petition without prejudice
by the OHA terminates the OHA’s
review of the petition but does not bar
the petitioner from resubmitting the
petition provided that the facts or
circumstances leading to the dismissal
have been resolved. In dismissing a
petition without prejudice, the OHA
may order that the petitioner may not
resubmit the petition, or a substantially
similar petition, for a period of time not
to exceed 180 days. The OHA may
dismiss a petition without prejudice if:
(1) The petitioner fails to include any
of the required elements of a petition set
forth in § 1003.11 of this part;
(2) The petitioner fails to provide
notice as required by § 1003.12 of this
part;
(3) The petitioner fails to timely
provide documents or information at the
request of the OHA pursuant to
§ 1003.14 or § 1003.15 of this part;
(4) The petition fails to state a claim
upon which the OHA can grant relief; or
(5) The OHA determines that there is
insufficient information upon which to
base a decision.
§ 1003.17
Standard of review.
(a) The OHA will grant a petition that
seeks an adjustment from a DOE rule,
regulation or order under the authority
of 42 U.S.C. 7194 only if it determines
that doing so will alleviate or prevent
serious hardship, gross inequity or
unfair distribution of burdens.
(b) Except as provided by program,
statute, rule, regulation, or DOE
delegation of authority, the OHA will
grant any other petition filed under this
part upon a showing that the DOE acted
arbitrarily, capriciously, or in violation
of a law, rule, regulation, or delegation
with respect to the final disposition of
DOE that is the subject of the petition.
(c) Petitions shall be decided in a
manner that is, to the extent possible,
consistent with the disposition of
previous petitions of the same kind.
§ 1003.18
Decision and Order.
(a) Upon consideration of the petition
and other relevant information received
or obtained during the proceeding, the
OHA will issue a Decision and Order
granting or denying the petition and
ordering relief as appropriate. The OHA
will serve the Decision and Order on the
parties to the proceeding and make it
available to the public.
(b) The Decision and Order will set
forth its legal basis and the relevant
facts, state whether it is a final agency
VerDate Sep<11>2014
15:59 Oct 29, 2019
Jkt 250001
action of the DOE, and state what
further review, if any, is available.
(c) There is no administrative appeal
of a Decision and Order, except as
provided by federal statute.
§ 1003.19
Reconsideration.
A participant in the proceeding may
submit to the OHA a motion for
reconsideration of a Decision and Order.
The motion for reconsideration must be
filed by the 20th day after the OHA
makes the Decision and Order available
to the public. The motion must include
a statement of the grounds on which the
movant believes reconsideration is
warranted. Such grounds may include,
but are not limited to, procedural, legal,
or factual errors in the Decision and
Order. A motion for reconsideration
may be granted if the Director
determines the Decision and Order
contains an error that materially
impacted the outcome of the
proceeding.
[FR Doc. 2019–23509 Filed 10–29–19; 8:45 am]
BILLING CODE 6450–01–P
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 34
[Docket No. OCC–2019–0022]
RIN 1557–AE68
58013
establishes special appraisal
requirements for ‘‘higher-risk
mortgages,’’ termed ‘‘higher-priced
mortgage loans’’ 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). If there is no annual
percentage increase in the CPI–W, the
OCC, the Board, and the Bureau will not
adjust this exemption threshold from
the prior year. However, in years
following a year in which the exemption
threshold was not adjusted, the
threshold is calculated by applying the
annual percentage increase in the CPI–
W to the dollar amount that would have
resulted, after rounding, if the decreases
and any subsequent increases in the
CPI–W had been taken into account.
Based on the CPI–W in effect as of June
1, 2019, the exemption threshold will
increase from $26,700 to $27,200,
effective January 1, 2020.
This final rule is effective
January 1, 2020.
DATES:
FEDERAL RESERVE SYSTEM
FOR FURTHER INFORMATION CONTACT:
12 CFR Part 226
[Docket No. R–1678]
RIN 7100–AF–61
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1026
Appraisals for Higher-Priced Mortgage
Loans Exemption Threshold
Office of the Comptroller of the
Currency, Treasury (OCC), Board of
Governors of the Federal Reserve
System (Board); and Bureau of
Consumer Financial Protection
(Bureau).
ACTION: Final rules, official
interpretations and commentary.
AGENCY:
The OCC, the Board, and the
Bureau are finalizing amendments to the
official interpretations for their
regulations that implement section
129H of the Truth in Lending Act
(TILA). Section 129H of TILA
SUMMARY:
PO 00000
Frm 00009
Fmt 4700
Sfmt 4700
OCC: MaryAnn Nash, Counsel, Chief
Counsel’s Office, (202) 649–6287; for
persons who are deaf or hard of hearing
TTY, (202) 649–5597.
Board: Lorna M. Neill, Senior
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: Kristen Phinnessee, Counsel,
Office of Regulations, Bureau of
Consumer Financial Protection, at (202)
435–7700. If you require this document
in an alternative electronic format,
please contact CFPB_Accessibility@
cfpb.gov.
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
E:\FR\FM\30OCR1.SGM
30OCR1
58014
Federal Register / Vol. 84, No. 210 / Wednesday, October 30, 2019 / Rules and Regulations
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 July 2013, the
Agencies proposed additional
exemptions from the January 2013 Final
Rule (the 2013 Supplemental Proposed
Rule).3 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).4 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.
The OCC’s, the Board’s, and the
Bureau’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.5
The OCC’s, Board’s, and Bureau’s
regulations,6 and their accompanying
interpretations,7 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. If there is no
annual percentage increase in the CPI–
1 Public Law 111–203, section 1471, 124 Stat.
1376, 2185–87 (2010), codified at TILA section
129H, 15 U.S.C. 1639h.
2 78 FR 10368 (Feb. 13, 2013).
3 78 FR 48548 (Aug. 8, 2013).
4 78 FR 78520 (Dec. 26, 2013).
5 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).
6 12 CFR 34.203(b)(2) (OCC); 12 CFR 226.43(b)(2)
(Board); and 12 CFR 1026.35(c)(2)(ii) (Bureau).
7 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).
VerDate Sep<11>2014
15:59 Oct 29, 2019
Jkt 250001
W, the OCC, the Board, and the Bureau
will not adjust the threshold amounts
from the prior year.8
On November 30, 2016, the OCC, the
Board, and the Bureau published a final
rule in the Federal Register to
memorialize the calculation method
used by the agencies each year to adjust
the exemption threshold to ensure that
the values for the exemption threshold
keep pace with the CPI–W (HPML Small
Dollar Adjustment Calculation Rule).9
The HPML Small Dollar Adjustment
Calculation Rule memorialized the
policy that, if there is no annual
percentage increase in the CPI–W, the
OCC, the Board, and Bureau will not
adjust the exemption threshold from the
prior year. The HPML Small Dollar
Adjustment Calculation Rule also
provided that, in years following a year
in which the exemption threshold was
not adjusted because there was a
decrease in the CPI–W from the
previous year, the threshold is
calculated by applying the annual
percentage change in the CPI–W to the
dollar amount that would have resulted,
after rounding, if the decreases and any
subsequent increases in the CPI–W had
been taken into account. If the resulting
amount calculated, after rounding, is
greater than the current threshold, then
the threshold effective January 1 the
following year will increase
accordingly; if the resulting amount
calculated, after rounding, is equal to or
less than the current threshold, then the
threshold effective January 1 the
following year will not change, but
future increases will be calculated based
on the amount that would have resulted,
after rounding.
II. 2020 Adjustment and Commentary
Revision
Effective January 1, 2020, the
exemption threshold amount is
increased from $26,700 to $27,200. This
increase is based on the CPI–W in effect
on June 1, 2019, which was reported on
May 10, 2019. The Bureau of Labor
Statistics publishes consumer-based
indices monthly, but does not report a
CPI change on June 1; indices are
reported in the middle of the prior
month. The CPI–W is a subset of the
CPI–U index (based on all urban
consumers) and represents
approximately 29 percent of the U.S.
population. The CPI–W reported on
May 10, 2019, reflects a 1.9 percent
increase in the CPI–W from April 2018
8 See 12 CFR part 34, appendix C to subpart G,
comment 203(b)(2)–1 and –2 (OCC); 12 CFR part
226, Supplement I, comment 43(b)(2)–1 and –2
(Board); and 12 CFR part 1026, Supplement I,
comment 35(c)(2)(ii)–1 and –2 (Bureau).
9 See 81 FR 86250 (Nov. 30, 2016).
PO 00000
Frm 00010
Fmt 4700
Sfmt 4700
to April 2019. Accordingly, the 1.9
percent increase in the CPI–W from
April 2018 to April 2019 results in an
exemption threshold amount of $27,200.
The OCC, the Board, and the Bureau are
revising the commentaries to their
respective regulations to add new
comments as follows:
• Comment 203(b)(2)–3.vii to 12 CFR
part 34, appendix C to subpart G (OCC);
• Comment 43(b)(2)–3.vii to
Supplement I of 12 CFR part 226
(Board); and
• Comment 35(c)(2)(ii)–3.vii to
Supplement I of 12 CFR part 1026
(Bureau).
These new comments state that, from
January 1, 2020, through December 31,
2020, the threshold amount is $27,200.
These revisions are effective January 1,
2020.10
III. Regulatory Analysis
Administrative Procedure Act
Under the Administrative Procedure
Act, notice and opportunity for public
comment are not required if the agency
finds that notice and public comment
are impracticable, unnecessary, or
contrary to the public interest.11 The
amendments in this rule are technical
and apply the method previously
memorialized in the December 2013
Supplemental Final Rule and the HPML
Small Dollar Adjustment Calculation
Rule. 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.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA)
does not apply to a rulemaking where a
general notice of proposed rulemaking
is not required.12 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.
Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act of 1995,13 the agencies
10 The Office of the Federal Register requires the
OCC, the Board, and the Bureau to reprint sections
of commentary being amended in their entirety,
rather than solely printing the amended portion.
Therefore, sections of commentary included in this
document show the language of those sections in
their entirety.
11 5 U.S.C. 553(b)(B).
12 5 U.S.C. 603(a), 604(a).
13 44 U.S.C. 3506; 5 CFR part 1320.
E:\FR\FM\30OCR1.SGM
30OCR1
Federal Register / Vol. 84, No. 210 / Wednesday, October 30, 2019 / Rules and Regulations
reviewed this final rule. No collections
of information pursuant to the
Paperwork Reduction Act are contained
in the final rule.
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.14 As
discussed above, the OCC has
determined that the publication of a
general notice of proposed rulemaking
is unnecessary.
Bureau Congressional Review Act
Statement
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, 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:
U.S.C. 1532.
VerDate Sep<11>2014
15:59 Oct 29, 2019
Jkt 250001
1. The authority citation for part 34
continues to read as follows:
■
Authority: 12 U.S.C. 1 et seq., 25b, 29, 93a,
371, 1462a, 1463, 1464, 1465, 1701j–3,
1828(o), 3331 et seq., 5101 et seq., and
5412(b)(2)(B) and 15 U.S.C. 1639h.
2. In appendix C to subpart G, under
Section 34.203—Appraisals for HigherPriced Mortgage Loans, revise Paragraph
34.203(b)(2) to read as follows:
■
Appendix C to Subpart G—OCC
Interpretations
*
*
*
*
*
Section 34.203—Appraisals for Higher-Priced
Mortgage Loans
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the Bureau
will submit a report containing this rule
and other required information to the
U.S. Senate, the U.S. House of
Representatives, and the Comptroller
General of the United States prior to the
rule taking effect. The Office of
Information and Regulatory Affairs
(OIRA) has designated this rule as not
a ‘‘major rule’’ as defined by 5 U.S.C.
804(2).
14 2
PART 34—REAL ESTATE LENDING
AND APPRAISALS
*
*
*
*
*
Paragraph 34.203(b)(2)
1. Threshold amount. For purposes of
§ 34.203(b)(2), the threshold amount in effect
during a particular period is the amount
stated in comment 203(b)(2)–3 for that
period. The threshold amount is adjusted
effective January 1 of each year by 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. Comment 203(b)(2)–
3 will be amended to provide the threshold
amount for the upcoming year after the
annual percentage change in the CPI–W that
was in effect on June 1 becomes available.
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.
2. No increase in the CPI–W. If the CPI–W
in effect on June 1 does not increase from the
CPI–W in effect on June 1 of the previous
year, the threshold amount effective the
following January 1 through December 31
will not change from the previous year.
When this occurs, for the years that follow,
the threshold is calculated based on the
annual percentage change in the CPI–W
applied to the dollar amount that would have
resulted, after rounding, if decreases and any
subsequent increases in the CPI–W had been
taken into account.
i. Net increases. If the resulting amount
calculated, after rounding, is greater than the
current threshold, then the threshold
effective January 1 the following year will
increase accordingly.
ii. Net decreases. If the resulting amount
calculated, after rounding, is equal to or less
than the current threshold, then the
threshold effective January 1 the following
year will not change, but future increases
will be calculated based on the amount that
would have resulted.
3. Threshold. For purposes of
§ 34.203(b)(2), the threshold amount in effect
PO 00000
Frm 00011
Fmt 4700
Sfmt 4700
58015
during a particular period is the amount
stated below for that period.
i. From January 18, 2014, through
December 31, 2014, the threshold amount is
$25,000.
ii. From January 1, 2015, through
December 31, 2015, the threshold amount is
$25,500.
iii. From January 1, 2016, through
December 31, 2016, the threshold amount is
$25,500.
iv. From January 1, 2017, through
December 31, 2017, the threshold amount is
$25,500.
v. From January 1, 2018, through December
31, 2018, the threshold amount is $26,000.
vi. From January 1, 2019, through
December 31, 2019, the threshold amount is
$26,700.
vii. From January 1, 2020, through
December 31, 2020, the threshold amount is
$27,200.
4. Qualifying for exemption—in general. A
transaction is exempt under § 34.203(b)(2) if
the creditor makes an extension of credit at
consummation that is equal to or below the
threshold amount in effect at the time of
consummation.
5. Qualifying for exemption—subsequent
changes. A transaction does not meet the
condition for an exemption under
§ 34.203(b)(2) merely because it is used to
satisfy and replace an existing exempt loan,
unless the amount of the new extension of
credit is equal to or less than the applicable
threshold amount. For example, assume a
closed-end loan that qualified for a
§ 34.203(b)(2) exemption at consummation in
year one is refinanced in year ten and that
the new loan amount is greater than the
threshold amount in effect in year ten. In
these circumstances, the creditor must
comply with all of the applicable
requirements of § 34.203 with respect to the
year ten transaction if the original loan is
satisfied and replaced by the new loan,
unless another exemption from the
requirements of § 34.203 applies. See
§ 34.203(b) and (d)(7).
*
*
*
*
*
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)
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, section 2, 123 Stat. 1734; Pub. L. 111–
203, 124 Stat. 1376.
4. In Supplement I to part 226, under
Section 226.43—Appraisals for HigherRisk Mortgage Loans, revise Paragraph
43(b)(2) to read as follows:
■
E:\FR\FM\30OCR1.SGM
30OCR1
58016
Federal Register / Vol. 84, No. 210 / Wednesday, October 30, 2019 / Rules and Regulations
Supplement I to Part 226—Official Staff
Interpretations
*
*
*
*
*
Section 226.43—Appraisals for Higher-Risk
Mortgage Loans
*
*
*
*
*
Paragraph 43(b)(2)
1. Threshold amount. For purposes of
§ 226.43(b)(2), the threshold amount in effect
during a particular period is the amount
stated in comment 43(b)(2)–3 for that period.
The threshold amount is adjusted effective
January 1 of each year by 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. Comment 43(b)(2)–3 will
be amended to provide the threshold amount
for the upcoming year after the annual
percentage change in the CPI–W that was in
effect on June 1 becomes available. 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.
2. No increase in the CPI–W. If the CPI–W
in effect on June 1 does not increase from the
CPI–W in effect on June 1 of the previous
year, the threshold amount effective the
following January 1 through December 31
will not change from the previous year.
When this occurs, for the years that follow,
the threshold is calculated based on the
annual percentage change in the CPI–W
applied to the dollar amount that would have
resulted, after rounding, if decreases and any
subsequent increases in the CPI–W had been
taken into account.
i. Net increases. If the resulting amount
calculated, after rounding, is greater than the
current threshold, then the threshold
effective January 1 the following year will
increase accordingly.
ii. Net decreases. If the resulting amount
calculated, after rounding, is equal to or less
than the current threshold, then the
threshold effective January 1 the following
year will not change, but future increases
will be calculated based on the amount that
would have resulted.
3. Threshold. For purposes of
§ 226.43(b)(2), the threshold amount in effect
during a particular period is the amount
stated below for that period.
i. From January 18, 2014, through
December 31, 2014, the threshold amount is
$25,000.
ii. From January 1, 2015, through
December 31, 2015, the threshold amount is
$25,500.
iii. From January 1, 2016, through
December 31, 2016, the threshold amount is
$25,500.
iv. From January 1, 2017, through
December 31, 2017, the threshold amount is
$25,500.
v. From January 1, 2018, through December
31, 2018, the threshold amount is $26,000.
VerDate Sep<11>2014
15:59 Oct 29, 2019
Jkt 250001
vi. From January 1, 2019, through
December 31, 2019, the threshold amount is
$26,700.
vii. From January 1, 2020, through
December 31, 2020, the threshold amount is
$27,200.
4. Qualifying for exemption—in general. A
transaction is exempt under § 226.43(b)(2) if
the creditor makes an extension of credit at
consummation that is equal to or below the
threshold amount in effect at the time of
consummation.
5. Qualifying for exemption—subsequent
changes. A transaction does not meet the
condition for an exemption under
§ 226.43(b)(2) merely because it is used to
satisfy and replace an existing exempt loan,
unless the amount of the new extension of
credit is equal to or less than the applicable
threshold amount. For example, assume a
closed-end loan that qualified for a
§ 226.43(b)(2) exemption at consummation in
year one is refinanced in year ten and that
the new loan amount is greater than the
threshold amount in effect in year ten. In
these circumstances, the creditor must
comply with all of the applicable
requirements of § 226.43 with respect to the
year ten transaction if the original loan is
satisfied and replaced by the new loan,
unless another exemption from the
requirements of § 226.43 applies. See
§ 226.43(b) and (d)(7).
*
*
*
*
*
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)
5. The authority citation for part 1026
continues to read as follows:
■
Authority: 12 U.S.C. 2601, 2603–2605,
2607, 2609, 2617, 3353, 5511, 5512, 5532,
5581; 15 U.S.C. 1601 et seq.
6. In Supplement I to part 1026, under
Section 1026.35—Requirements for
Higher-Priced Mortgage Loans, revise
Paragraph 35(c)(2)(ii) to read as follows:
■
Supplement I to Part 1026—Official
Interpretations
*
*
*
*
*
Section 1026.35—Requirements for HigherPriced Mortgage Loans
*
*
*
*
*
Paragraph 35(c)(2)(ii)
1. Threshold amount. For purposes of
§ 1026.35(c)(2)(ii), the threshold amount in
effect during a particular period is the
amount stated in comment 35(c)(2)(ii)–3 for
that period. The threshold amount is
adjusted effective January 1 of each year by
any annual percentage increase in the
Consumer Price Index for Urban Wage
PO 00000
Frm 00012
Fmt 4700
Sfmt 4700
Earners and Clerical Workers (CPI–W) that
was in effect on the preceding June 1.
Comment 35(c)(2)(ii)–3 will be amended to
provide the threshold amount for the
upcoming year after the annual percentage
change in the CPI–W that was in effect on
June 1 becomes available. 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.
2. No increase in the CPI–W. If the CPI–W
in effect on June 1 does not increase from the
CPI–W in effect on June 1 of the previous
year, the threshold amount effective the
following January 1 through December 31
will not change from the previous year.
When this occurs, for the years that follow,
the threshold is calculated based on the
annual percentage change in the CPI–W
applied to the dollar amount that would have
resulted, after rounding, if decreases and any
subsequent increases in the CPI–W had been
taken into account.
i. Net increases. If the resulting amount
calculated, after rounding, is greater than the
current threshold, then the threshold
effective January 1 the following year will
increase accordingly.
ii. Net decreases. If the resulting amount
calculated, after rounding, is equal to or less
than the current threshold, then the
threshold effective January 1 the following
year will not change, but future increases
will be calculated based on the amount that
would have resulted.
3. Threshold. For purposes of
§ 1026.35(c)(2)(ii), the threshold amount in
effect during a particular period is the
amount stated below for that period.
i. From January 18, 2014, through
December 31, 2014, the threshold amount is
$25,000.
ii. From January 1, 2015, through
December 31, 2015, the threshold amount is
$25,500.
iii. From January 1, 2016, through
December 31, 2016, the threshold amount is
$25,500.
iv. From January 1, 2017, through
December 31, 2017, the threshold amount is
$25,500.
v. From January 1, 2018, through December
31, 2018, the threshold amount is $26,000.
vi. From January 1, 2019, through
December 31, 2019, the threshold amount is
$26,700.
vii. From January 1, 2020, through
December 31, 2020, the threshold amount is
$27,200.
4. Qualifying for exemption—in general. A
transaction is exempt under
§ 1026.35(c)(2)(ii) if the creditor makes an
extension of credit at consummation that is
equal to or below the threshold amount in
effect at the time of consummation.
5. Qualifying for exemption—subsequent
changes. A transaction does not meet the
condition for an exemption under
§ 1026.35(c)(2)(ii) merely because it is used to
E:\FR\FM\30OCR1.SGM
30OCR1
Federal Register / Vol. 84, No. 210 / Wednesday, October 30, 2019 / Rules and Regulations
satisfy and replace an existing exempt loan,
unless the amount of the new extension of
credit is equal to or less than the applicable
threshold amount. For example, assume a
closed-end loan that qualified for a
§ 1026.35(c)(2)(ii) exemption at
consummation in year one is refinanced in
year ten and that the new loan amount is
greater than the threshold amount in effect in
year ten. In these circumstances, the creditor
must comply with all of the applicable
requirements of § 1026.35(c) with respect to
the year ten transaction if the original loan
is satisfied and replaced by the new loan,
unless another exemption from the
requirements of § 1026.35(c) applies. See
§ 1026.35(c)(2) and (c)(4)(vii).
*
*
*
*
*
Dated: September 27, 2019.
Morris R. Morgan,
First Deputy Comptroller, Comptroller of the
Currency.
By order of the Board of Governors of the
Federal Reserve System, acting through the
Secretary of the Board under delegated
authority, September 20, 2019.
Ann E. Misback,
Secretary of the Board.
Dated: September 24, 2019.
Thomas Pahl,
Policy Associate Director, Bureau of
Consumer Financial Protection.
[FR Doc. 2019–21559 Filed 10–29–19; 8:45 am]
BILLING CODE: 4810–33– 6210–01– 4810–AM–P
FEDERAL RESERVE SYSTEM
12 CFR Part 213
[Docket No. R–1676]
RIN 7100–AF 59
BUREAU OF CONSUMER FINANCIAL
PROTECTION
12 CFR Part 1013
Consumer Leasing (Regulation M)
Board of Governors of the
Federal Reserve System (Board); and
Bureau of Consumer Financial
Protection (Bureau).
ACTION: Final rules, official
interpretations and commentary.
AGENCY:
The Board and the Bureau are
finalizing amendments to the official
interpretations and commentary for the
agencies’ regulations that implement the
Consumer Leasing Act (CLA). The
Dodd-Frank Wall Street Reform and
Consumer Protection Act (Dodd-Frank
Act) amended the CLA by requiring that
the dollar threshold for exempt
consumer leases be adjusted annually
by the annual percentage increase in the
Consumer Price Index for Urban Wage
Earners and Clerical Workers (CPI–W).
SUMMARY:
VerDate Sep<11>2014
15:59 Oct 29, 2019
Jkt 250001
If there is no annual percentage increase
in the CPI–W, the Board and the Bureau
will not adjust this exemption threshold
from the prior year. However, in years
following a year in which the exemption
threshold was not adjusted, the
threshold is calculated by applying the
annual percentage change in the CPI–W
to the dollar amount that would have
resulted, after rounding, if the decreases
and any subsequent increases in the
CPI–W had been taken into account.
Based on the annual percentage increase
in the CPI–W as of June 1, 2019, the
exemption threshold will increase from
$57,200 to $58,300 effective January 1,
2020. Because the Dodd-Frank Act also
requires similar adjustments in the
Truth in Lending Act’s threshold for
exempt consumer credit transactions,
the Board and the Bureau are making
similar amendments to each of their
respective regulations implementing the
Truth in Lending Act elsewhere in this
issue of the Federal Register.
DATES: This final rule is effective
January 1, 2020.
FOR FURTHER INFORMATION CONTACT:
Board: Vivian W. Wong, Senior
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: Kristen Phinnessee, Counsel,
Office of Regulations, Bureau of
Consumer Financial Protection, at (202)
435–7700. If you require this document
in an alternative electronic format,
please contact CFPB_Accessibility@
cfpb.gov.
SUPPLEMENTARY INFORMATION:
I. Background
The Dodd-Frank Wall Street Reform
and Consumer Protection Act of 2010
(Dodd-Frank Act) increased the
threshold in the Consumer Leasing Act
(CLA) for exempt consumer leases, and
the threshold in the Truth in Lending
Act (TILA) for exempt consumer credit
transactions,1 from $25,000 to $50,000,
effective July 21, 2011.2 In addition, the
Dodd-Frank Act requires that, on and
after December 31, 2011, these
thresholds be adjusted annually for
inflation by the annual percentage
increase in the Consumer Price Index
1 Although consumer credit transactions above
the threshold are generally exempt, loans secured
by real property or by personal property used or
expected to be used as the principal dwelling of a
consumer and private education loans are covered
by TILA regardless of the loan amount. See 12 CFR
226.3(b)(1)(i) (Board) and 12 CFR 1026.3(b)(1)(i)
(Bureau).
2 Public Law 111–203, section 1100E, 124 Stat.
1376, 2111 (2010).
PO 00000
Frm 00013
Fmt 4700
Sfmt 4700
58017
for Urban Wage Earners and Clerical
Workers (CPI–W), as published by the
Bureau of Labor Statistics. In April
2011, the Board issued a final rule
amending Regulation M (which
implements the CLA) consistent with
these provisions of the Dodd-Frank Act,
along with a similar final rule amending
Regulation Z (which implements TILA)
(collectively, the Board Final Threshold
Rules).3
Title X of the Dodd-Frank Act
transferred rulemaking authority for a
number of consumer financial
protection laws from the Board to the
Bureau, effective July 21, 2011. In
connection with this transfer of
rulemaking authority, the Bureau issued
its own Regulation M implementing the
CLA, 12 CFR part 1013, substantially
duplicating the Board’s Regulation M.4
Although the Bureau has the authority
to issue rules to implement the CLA for
most entities, the Board retains
authority to issue rules under the CLA
for certain motor vehicle dealers
covered by section 1029(a) of the DoddFrank Act, and the Board’s Regulation
M continues to apply to those entities.5
The Board’s and the Bureau’s
regulations,6 and their accompanying
commentaries, provide that the
exemption threshold will be adjusted
annually effective January 1 of each year
based on any annual percentage
increase in the CPI–W that was in effect
on the preceding June 1. They further
provide that any increase in the
threshold amount will be rounded to the
nearest $100 increment. For example, if
the annual percentage increase in the
3 76 FR 18349 (Apr. 4, 2011); 76 FR 18354 (Apr.
4, 2011).
4 See 76 FR 78500 (Dec. 19, 2011); 81 FR 25323
(Apr. 28, 2016).
5 Section 1029(a) of the Dodd-Frank Act states:
‘‘Except as permitted in subsection (b), the Bureau
may not exercise any rulemaking, supervisory,
enforcement, or any other authority . . . over a
motor vehicle dealer that is predominantly engaged
in the sale and servicing of motor vehicles, the
leasing and servicing of motor vehicles, or both.’’
12 U.S.C. 5519(a). Section 1029(b) of the DoddFrank Act provides that subsection (a) shall not
apply to any person, to the extent that such person
(1) provides consumers with any services related to
residential or commercial mortgages or selffinancing transactions involving real property; (2)
operates a line of business (A) that involves the
extension of retail credit or retail leases involving
motor vehicles; and (B) in which (i) the extension
of retail credit or retail leases are provided directly
to consumers; and (ii) the contract governing such
extension of retail credit or retail leases is not
routinely assigned to an unaffiliated third party
finance or leasing source; or (3) offers or provides
a consumer financial product or service not
involving or related to the sale, financing, leasing,
rental, repair, refurbishment, maintenance, or other
servicing of motor vehicles, motor vehicle parts, or
any related or ancillary product or service. 12
U.S.C. 5519(b).
6 12 CFR 213.2(e)(1) (Board) and 12 CFR
1013.2(e)(1) (Bureau).
E:\FR\FM\30OCR1.SGM
30OCR1
]]>Agencies
[Federal Register Volume 84, Number 210 (Wednesday, October 30, 2019)]
[Rules and Regulations]
[Pages 58013-58017]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21559]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 34
[Docket No. OCC-2019-0022]
RIN 1557-AE68
FEDERAL RESERVE SYSTEM
12 CFR Part 226
[Docket No. R-1678]
RIN 7100-AF-61
BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Part 1026
Appraisals for Higher-Priced Mortgage Loans Exemption Threshold
AGENCY: Office of the Comptroller of the Currency, Treasury (OCC),
Board of Governors of the Federal Reserve System (Board); and Bureau of
Consumer Financial Protection (Bureau).
ACTION: Final rules, official interpretations and commentary.
-----------------------------------------------------------------------
SUMMARY: The OCC, the Board, and the Bureau are finalizing amendments
to the official 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
mortgages,'' termed ``higher-priced mortgage loans'' 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). If there is no annual percentage increase in
the CPI-W, the OCC, the Board, and the Bureau will not adjust this
exemption threshold from the prior year. However, in years following a
year in which the exemption threshold was not adjusted, the threshold
is calculated by applying the annual percentage increase in the CPI-W
to the dollar amount that would have resulted, after rounding, if the
decreases and any subsequent increases in the CPI-W had been taken into
account. Based on the CPI-W in effect as of June 1, 2019, the exemption
threshold will increase from $26,700 to $27,200, effective January 1,
2020.
DATES: This final rule is effective January 1, 2020.
FOR FURTHER INFORMATION CONTACT:
OCC: MaryAnn Nash, Counsel, Chief Counsel's Office, (202) 649-6287;
for persons who are deaf or hard of hearing TTY, (202) 649-5597.
Board: Lorna M. Neill, Senior 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: Kristen Phinnessee, Counsel, Office of Regulations, Bureau
of Consumer Financial Protection, at (202) 435-7700. If you require
this document in an alternative electronic format, please contact
[email protected].
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
[[Page 58014]]
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 July 2013, the Agencies proposed
additional exemptions from the January 2013 Final Rule (the 2013
Supplemental Proposed Rule).\3\ 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).\4\ 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.
---------------------------------------------------------------------------
\1\ Public Law 111-203, section 1471, 124 Stat. 1376, 2185-87
(2010), codified at TILA section 129H, 15 U.S.C. 1639h.
\2\ 78 FR 10368 (Feb. 13, 2013).
\3\ 78 FR 48548 (Aug. 8, 2013).
\4\ 78 FR 78520 (Dec. 26, 2013).
---------------------------------------------------------------------------
The OCC's, the Board's, and the Bureau'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.\5\
---------------------------------------------------------------------------
\5\ 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).
---------------------------------------------------------------------------
The OCC's, Board's, and Bureau's regulations,\6\ and their
accompanying interpretations,\7\ 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. If there is no annual percentage increase in the
CPI-W, the OCC, the Board, and the Bureau will not adjust the threshold
amounts from the prior year.\8\
---------------------------------------------------------------------------
\6\ 12 CFR 34.203(b)(2) (OCC); 12 CFR 226.43(b)(2) (Board); and
12 CFR 1026.35(c)(2)(ii) (Bureau).
\7\ 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).
\8\ See 12 CFR part 34, appendix C to subpart G, comment
203(b)(2)-1 and -2 (OCC); 12 CFR part 226, Supplement I, comment
43(b)(2)-1 and -2 (Board); and 12 CFR part 1026, Supplement I,
comment 35(c)(2)(ii)-1 and -2 (Bureau).
---------------------------------------------------------------------------
On November 30, 2016, the OCC, the Board, and the Bureau published
a final rule in the Federal Register to memorialize the calculation
method used by the agencies each year to adjust the exemption threshold
to ensure that the values for the exemption threshold keep pace with
the CPI-W (HPML Small Dollar Adjustment Calculation Rule).\9\ The HPML
Small Dollar Adjustment Calculation Rule memorialized the policy that,
if there is no annual percentage increase in the CPI-W, the OCC, the
Board, and Bureau will not adjust the exemption threshold from the
prior year. The HPML Small Dollar Adjustment Calculation Rule also
provided that, in years following a year in which the exemption
threshold was not adjusted because there was a decrease in the CPI-W
from the previous year, the threshold is calculated by applying the
annual percentage change in the CPI-W to the dollar amount that would
have resulted, after rounding, if the decreases and any subsequent
increases in the CPI-W had been taken into account. If the resulting
amount calculated, after rounding, is greater than the current
threshold, then the threshold effective January 1 the following year
will increase accordingly; if the resulting amount calculated, after
rounding, is equal to or less than the current threshold, then the
threshold effective January 1 the following year will not change, but
future increases will be calculated based on the amount that would have
resulted, after rounding.
---------------------------------------------------------------------------
\9\ See 81 FR 86250 (Nov. 30, 2016).
---------------------------------------------------------------------------
II. 2020 Adjustment and Commentary Revision
Effective January 1, 2020, the exemption threshold amount is
increased from $26,700 to $27,200. This increase is based on the CPI-W
in effect on June 1, 2019, which was reported on May 10, 2019. The
Bureau of Labor Statistics publishes consumer-based indices monthly,
but does not report a CPI change on June 1; indices are reported in the
middle of the prior month. The CPI-W is a subset of the CPI-U index
(based on all urban consumers) and represents approximately 29 percent
of the U.S. population. The CPI-W reported on May 10, 2019, reflects a
1.9 percent increase in the CPI-W from April 2018 to April 2019.
Accordingly, the 1.9 percent increase in the CPI-W from April 2018 to
April 2019 results in an exemption threshold amount of $27,200. The
OCC, the Board, and the Bureau are revising the commentaries to their
respective regulations to add new comments as follows:
Comment 203(b)(2)-3.vii to 12 CFR part 34, appendix C to
subpart G (OCC);
Comment 43(b)(2)-3.vii to Supplement I of 12 CFR part 226
(Board); and
Comment 35(c)(2)(ii)-3.vii to Supplement I of 12 CFR part
1026 (Bureau).
These new comments state that, from January 1, 2020, through December
31, 2020, the threshold amount is $27,200. These revisions are
effective January 1, 2020.\10\
---------------------------------------------------------------------------
\10\ The Office of the Federal Register requires the OCC, the
Board, and the Bureau to reprint sections of commentary being
amended in their entirety, rather than solely printing the amended
portion. Therefore, sections of commentary included in this document
show the language of those sections in their entirety.
---------------------------------------------------------------------------
III. Regulatory Analysis
Administrative Procedure Act
Under the Administrative Procedure Act, notice and opportunity for
public comment are not required if the agency finds that notice and
public comment are impracticable, unnecessary, or contrary to the
public interest.\11\ The amendments in this rule are technical and
apply the method previously memorialized in the December 2013
Supplemental Final Rule and the HPML Small Dollar Adjustment
Calculation Rule. 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.
---------------------------------------------------------------------------
\11\ 5 U.S.C. 553(b)(B).
---------------------------------------------------------------------------
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) does not apply to a rulemaking
where a general notice of proposed rulemaking is not required.\12\ 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.
---------------------------------------------------------------------------
\12\ 5 U.S.C. 603(a), 604(a).
---------------------------------------------------------------------------
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995,\13\ the
agencies
[[Page 58015]]
reviewed this final rule. No collections of information pursuant to the
Paperwork Reduction Act are contained in the final rule.
---------------------------------------------------------------------------
\13\ 44 U.S.C. 3506; 5 CFR part 1320.
---------------------------------------------------------------------------
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.\14\ As discussed above, the OCC has determined that the
publication of a general notice of proposed rulemaking is unnecessary.
---------------------------------------------------------------------------
\14\ 2 U.S.C. 1532.
---------------------------------------------------------------------------
Bureau Congressional Review Act Statement
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Bureau will submit a report containing this rule and other required
information to the U.S. Senate, the U.S. House of Representatives, and
the Comptroller General of the United States prior to the rule taking
effect. The Office of Information and Regulatory Affairs (OIRA) has
designated this rule as not a ``major rule'' as defined by 5 U.S.C.
804(2).
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, 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, 1462a, 1463,
1464, 1465, 1701j-3, 1828(o), 3331 et seq., 5101 et seq., and
5412(b)(2)(B) and 15 U.S.C. 1639h.
0
2. In appendix C to subpart G, under Section 34.203--Appraisals for
Higher-Priced Mortgage Loans, revise Paragraph 34.203(b)(2) to read as
follows:
Appendix C to Subpart G--OCC Interpretations
* * * * *
Section 34.203--Appraisals for Higher-Priced Mortgage Loans
* * * * *
Paragraph 34.203(b)(2)
1. Threshold amount. For purposes of Sec. 34.203(b)(2), the
threshold amount in effect during a particular period is the amount
stated in comment 203(b)(2)-3 for that period. The threshold amount
is adjusted effective January 1 of each year by 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. Comment 203(b)(2)-3 will be amended to provide the
threshold amount for the upcoming year after the annual percentage
change in the CPI-W that was in effect on June 1 becomes available.
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.
2. No increase in the CPI-W. If the CPI-W in effect on June 1
does not increase from the CPI-W in effect on June 1 of the previous
year, the threshold amount effective the following January 1 through
December 31 will not change from the previous year. When this
occurs, for the years that follow, the threshold is calculated based
on the annual percentage change in the CPI-W applied to the dollar
amount that would have resulted, after rounding, if decreases and
any subsequent increases in the CPI-W had been taken into account.
i. Net increases. If the resulting amount calculated, after
rounding, is greater than the current threshold, then the threshold
effective January 1 the following year will increase accordingly.
ii. Net decreases. If the resulting amount calculated, after
rounding, is equal to or less than the current threshold, then the
threshold effective January 1 the following year will not change,
but future increases will be calculated based on the amount that
would have resulted.
3. Threshold. For purposes of Sec. 34.203(b)(2), the threshold
amount in effect during a particular period is the amount stated
below for that period.
i. From January 18, 2014, through December 31, 2014, the
threshold amount is $25,000.
ii. From January 1, 2015, through December 31, 2015, the
threshold amount is $25,500.
iii. From January 1, 2016, through December 31, 2016, the
threshold amount is $25,500.
iv. From January 1, 2017, through December 31, 2017, the
threshold amount is $25,500.
v. From January 1, 2018, through December 31, 2018, the
threshold amount is $26,000.
vi. From January 1, 2019, through December 31, 2019, the
threshold amount is $26,700.
vii. From January 1, 2020, through December 31, 2020, the
threshold amount is $27,200.
4. Qualifying for exemption--in general. A transaction is exempt
under Sec. 34.203(b)(2) if the creditor makes an extension of
credit at consummation that is equal to or below the threshold
amount in effect at the time of consummation.
5. Qualifying for exemption--subsequent changes. A transaction
does not meet the condition for an exemption under Sec.
34.203(b)(2) merely because it is used to satisfy and replace an
existing exempt loan, unless the amount of the new extension of
credit is equal to or less than the applicable threshold amount. For
example, assume a closed-end loan that qualified for a Sec.
34.203(b)(2) exemption at consummation in year one is refinanced in
year ten and that the new loan amount is greater than the threshold
amount in effect in year ten. In these circumstances, the creditor
must comply with all of the applicable requirements of Sec. 34.203
with respect to the year ten transaction if the original loan is
satisfied and replaced by the new loan, unless another exemption
from the requirements of Sec. 34.203 applies. See Sec. 34.203(b)
and (d)(7).
* * * * *
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, section 2, 123 Stat. 1734; Pub. L. 111-
203, 124 Stat. 1376.
0
4. In Supplement I to part 226, under Section 226.43--Appraisals for
Higher-Risk Mortgage Loans, revise Paragraph 43(b)(2) to read as
follows:
[[Page 58016]]
Supplement I to Part 226--Official Staff Interpretations
* * * * *
Section 226.43--Appraisals for Higher-Risk Mortgage Loans
* * * * *
Paragraph 43(b)(2)
1. Threshold amount. For purposes of Sec. 226.43(b)(2), the
threshold amount in effect during a particular period is the amount
stated in comment 43(b)(2)-3 for that period. The threshold amount
is adjusted effective January 1 of each year by 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. Comment 43(b)(2)-3 will be amended to provide the
threshold amount for the upcoming year after the annual percentage
change in the CPI-W that was in effect on June 1 becomes available.
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.
2. No increase in the CPI-W. If the CPI-W in effect on June 1
does not increase from the CPI-W in effect on June 1 of the previous
year, the threshold amount effective the following January 1 through
December 31 will not change from the previous year. When this
occurs, for the years that follow, the threshold is calculated based
on the annual percentage change in the CPI-W applied to the dollar
amount that would have resulted, after rounding, if decreases and
any subsequent increases in the CPI-W had been taken into account.
i. Net increases. If the resulting amount calculated, after
rounding, is greater than the current threshold, then the threshold
effective January 1 the following year will increase accordingly.
ii. Net decreases. If the resulting amount calculated, after
rounding, is equal to or less than the current threshold, then the
threshold effective January 1 the following year will not change,
but future increases will be calculated based on the amount that
would have resulted.
3. Threshold. For purposes of Sec. 226.43(b)(2), the threshold
amount in effect during a particular period is the amount stated
below for that period.
i. From January 18, 2014, through December 31, 2014, the
threshold amount is $25,000.
ii. From January 1, 2015, through December 31, 2015, the
threshold amount is $25,500.
iii. From January 1, 2016, through December 31, 2016, the
threshold amount is $25,500.
iv. From January 1, 2017, through December 31, 2017, the
threshold amount is $25,500.
v. From January 1, 2018, through December 31, 2018, the
threshold amount is $26,000.
vi. From January 1, 2019, through December 31, 2019, the
threshold amount is $26,700.
vii. From January 1, 2020, through December 31, 2020, the
threshold amount is $27,200.
4. Qualifying for exemption--in general. A transaction is exempt
under Sec. 226.43(b)(2) if the creditor makes an extension of
credit at consummation that is equal to or below the threshold
amount in effect at the time of consummation.
5. Qualifying for exemption--subsequent changes. A transaction
does not meet the condition for an exemption under Sec.
226.43(b)(2) merely because it is used to satisfy and replace an
existing exempt loan, unless the amount of the new extension of
credit is equal to or less than the applicable threshold amount. For
example, assume a closed-end loan that qualified for a Sec.
226.43(b)(2) exemption at consummation in year one is refinanced in
year ten and that the new loan amount is greater than the threshold
amount in effect in year ten. In these circumstances, the creditor
must comply with all of the applicable requirements of Sec. 226.43
with respect to the year ten transaction if the original loan is
satisfied and replaced by the new loan, unless another exemption
from the requirements of Sec. 226.43 applies. See Sec. 226.43(b)
and (d)(7).
* * * * *
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, 3353,
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, revise Paragraph 35(c)(2)(ii) to read
as follows:
Supplement I to Part 1026--Official Interpretations
* * * * *
Section 1026.35--Requirements for Higher-Priced Mortgage Loans
* * * * *
Paragraph 35(c)(2)(ii)
1. Threshold amount. For purposes of Sec. 1026.35(c)(2)(ii),
the threshold amount in effect during a particular period is the
amount stated in comment 35(c)(2)(ii)-3 for that period. The
threshold amount is adjusted effective January 1 of each year by 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. Comment 35(c)(2)(ii)-3 will be amended to provide
the threshold amount for the upcoming year after the annual
percentage change in the CPI-W that was in effect on June 1 becomes
available. 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.
2. No increase in the CPI-W. If the CPI-W in effect on June 1
does not increase from the CPI-W in effect on June 1 of the previous
year, the threshold amount effective the following January 1 through
December 31 will not change from the previous year. When this
occurs, for the years that follow, the threshold is calculated based
on the annual percentage change in the CPI-W applied to the dollar
amount that would have resulted, after rounding, if decreases and
any subsequent increases in the CPI-W had been taken into account.
i. Net increases. If the resulting amount calculated, after
rounding, is greater than the current threshold, then the threshold
effective January 1 the following year will increase accordingly.
ii. Net decreases. If the resulting amount calculated, after
rounding, is equal to or less than the current threshold, then the
threshold effective January 1 the following year will not change,
but future increases will be calculated based on the amount that
would have resulted.
3. Threshold. For purposes of Sec. 1026.35(c)(2)(ii), the
threshold amount in effect during a particular period is the amount
stated below for that period.
i. From January 18, 2014, through December 31, 2014, the
threshold amount is $25,000.
ii. From January 1, 2015, through December 31, 2015, the
threshold amount is $25,500.
iii. From January 1, 2016, through December 31, 2016, the
threshold amount is $25,500.
iv. From January 1, 2017, through December 31, 2017, the
threshold amount is $25,500.
v. From January 1, 2018, through December 31, 2018, the
threshold amount is $26,000.
vi. From January 1, 2019, through December 31, 2019, the
threshold amount is $26,700.
vii. From January 1, 2020, through December 31, 2020, the
threshold amount is $27,200.
4. Qualifying for exemption--in general. A transaction is exempt
under Sec. 1026.35(c)(2)(ii) if the creditor makes an extension of
credit at consummation that is equal to or below the threshold
amount in effect at the time of consummation.
5. Qualifying for exemption--subsequent changes. A transaction
does not meet the condition for an exemption under Sec.
1026.35(c)(2)(ii) merely because it is used to
[[Page 58017]]
satisfy and replace an existing exempt loan, unless the amount of
the new extension of credit is equal to or less than the applicable
threshold amount. For example, assume a closed-end loan that
qualified for a Sec. 1026.35(c)(2)(ii) exemption at consummation in
year one is refinanced in year ten and that the new loan amount is
greater than the threshold amount in effect in year ten. In these
circumstances, the creditor must comply with all of the applicable
requirements of Sec. 1026.35(c) with respect to the year ten
transaction if the original loan is satisfied and replaced by the
new loan, unless another exemption from the requirements of Sec.
1026.35(c) applies. See Sec. 1026.35(c)(2) and (c)(4)(vii).
* * * * *
Dated: September 27, 2019.
Morris R. Morgan,
First Deputy Comptroller, Comptroller of the Currency.
By order of the Board of Governors of the Federal Reserve
System, acting through the Secretary of the Board under delegated
authority, September 20, 2019.
Ann E. Misback,
Secretary of the Board.
Dated: September 24, 2019.
Thomas Pahl,
Policy Associate Director, Bureau of Consumer Financial Protection.
[FR Doc. 2019-21559 Filed 10-29-19; 8:45 am]
BILLING CODE: 4810-33- 6210-01- 4810-AM-P
