Appraisals for Higher-Priced Mortgage Loans Exemption Threshold, 83311-83316 [2023-25047]
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Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations
associated with this final rule will be
limited to administrative costs to
analyze applicability of the rule and
compliance and validation testing to
determine the presence of detectable
modified genetic material in affected
products. As with beet sugar, it is
unlikely that refined sugarcane would
contain detectable levels of modified
genetic material. As a result, regulated
entities may not have additional
labeling costs due to the addition of
‘‘sugarcane (Bt insect-resistant
varieties)’’ to the List.
Food manufacturers whose products
contain summer squash and retailers
that sell uncooked summer squash will
see no change in costs as the
amendment to the List would reduce the
varieties of squash that are presumed to
be a BE food. Food manufacturers
whose products contain summer squash
and retailers that sell uncooked summer
squash are already maintaining records
or labeling relevant products in
accordance with the Standard.
Food manufacturers that use summer
squash are likely concentrated in Fruit
and Vegetable Preserving and Specialty
Food Manufacturing (The North
American Industry Classification
System (NAICS) 3114). This industry
sector had 1,540 firms listed in the 2017
Statistics of US Businesses. Of these,
approximately 1,475 would be classified
as small. Additionally, 904 firms would
be classified as very small food
manufacturers by the Standard and are
therefore exempt. Food manufacturers
already face the administrative costs
associated with using a product on the
List. The final rule would make it easier
for regulated entities, who are already
maintaining records in compliance with
the Standard, to demonstrate that
labeling is not required if they know
they are not receiving BE varieties. Costs
to small food manufacturers using
summer squash therefore will remain
unchanged by this proposal.
Retailers will not see a change in the
number of labels required as a result of
the change in the modifier of summer
squash or by the addition of sugarcane.
Summer squash that meets the
requirement for disclosure under the
2018 BE final rule will also meet the
requirement for disclosure under this
amendment. The same number of labels
are required under the two rules.
Therefore, the cost to retailers will
remain unchanged. Therefore, the costs
to each of the three affected industry
sectors would not be significant. For
these reasons, AMS is certifying that
this rule to add ‘‘sugarcane (Bt insectresistant varieties)’’ to the List and
limiting the varieties of squash listed as
BE foods to ‘‘summer, coat protein-
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mediated virus-resistant varieties’’ will
not have a significant economic impact
on a substantial number of small
entities.
DEPARTMENT OF THE TREASURY
F. Executive Order 12988
12 CFR Part 34
This final rule has been reviewed
under Executive Order 12988, Civil
Justice Reform. The final rule is not
intended to have retroactive effect. All
labeling claims made in conjunction
with this regulation must be consistent
with other applicable Federal
requirements. There are no
administrative procedures that must be
exhausted prior to any judicial
challenge to the provisions of this rule.
[Docket No. OCC–2023–0012]
G. Congressional Review Act
Pursuant to Subtitle E of the Small
Business Regulatory Enforcement
Fairness Act of 1996 (the Congressional
Review Act), the Office of Information
and Regulatory Affairs has determined
that this action does not meet the
criteria set forth in 5 U.S.C. 804(2).
List of Subjects in 7 CFR Part 66
Agricultural commodities, Food
labeling, Reporting and recordkeeping
requirements.
For the reasons stated in the
preamble, the Agricultural Marketing
Service amends 7 CFR part 66 as set
forth below:
PART 66—NATIONAL
BIOENGINEERED FOOD DISCLOSURE
STANDARD
1. The authority citation for part 66
continues to read as follows:
■
Authority: 7 U.S.C. 1621 et seq.
■
2. Revise § 66.6 to read as follows:
§ 66.6
List of bioengineered foods.
The List of Bioengineered Foods
consists of the following: Alfalfa, apple
(ArcticTM varieties), canola, corn,
cotton, eggplant (BARI Bt Begun
varieties), papaya (ringspot virusresistant varieties), pineapple (pink
flesh varieties), potato, salmon
(AquAdvantage®), soybean, squash
(summer, coat protein-mediated virusresistant varieties), sugarbeet, and
sugarcane (Bt insect-resistant varieties).
Erin Morris,
Associate Administrator, Agricultural
Marketing Service.
[FR Doc. 2023–26059 Filed 11–28–23; 8:45 am]
BILLING CODE P
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Office of the Comptroller of the
Currency
RIN 1557–AF23
FEDERAL RESERVE SYSTEM
12 CFR Part 226
[Docket No. R–1819]
RIN 7100–AG19
CONSUMER FINANCIAL PROTECTION
BUREAU
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 Consumer
Financial Protection Bureau (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
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) jointly issued 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. Additionally, in years following a
year in which the exemption threshold
was not adjusted because the CPI–W
decreased, the threshold is calculated by
applying the annual percentage increase
in the CPI–W to the dollar amount that
SUMMARY:
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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, 2023, the exemption
threshold will increase from $31,000 to
$32,400, effective January 1, 2024.
DATES: This final rule is effective
January 1, 2024.
FOR FURTHER INFORMATION CONTACT:
OCC: MaryAnn Nash, Counsel, Chief
Counsel’s Office, Office of the
Comptroller of the Currency, at (202)
649–6287. If you are deaf, hard of
hearing, or have a speech disability,
please dial 7–1–1 to access
telecommunications relay services.
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 TTY–TRS, please
call 711 from any telephone, anywhere
in the United States.
Bureau: Anna Boadwee and Adrien
Fernandez, Attorney-Advisors, Office of
Regulations, Consumer Financial
Protection Bureau, 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 TILA to add
special appraisal requirements for
‘‘higher-risk mortgages.’’ 1 In January
2013, the Agencies jointly issued a 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.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
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).
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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, the Board’s, and the
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 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
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 OCC, the Board, and the
Bureau 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 the 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
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).
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).
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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. 2024 Adjustment and Commentary
Revision
Effective January 1, 2024, the
exemption threshold amount will
increase from $31,000 to $32,400. This
amount is based on the CPI–W in effect
on June 1, 2023, which was reported on
May 10, 2023 (based on April 2023
data).10 The CPI–W is a subset of the
CPI–U index (based on all urban
consumers) and represents
approximately 30 percent of the U.S.
population. The CPI–W reported on
May 10, 2023, reflects a 4.6 percent
increase in the CPI–W from April 2022
to April 2023. Accordingly, the 4.6
percent increase in the CPI–W from
April 2022 to April 2023 results in an
exemption threshold amount of $32,400,
after rounding. 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.xi to 12 CFR
part 34, Appendix C to Subpart G
(OCC);
• Comment 43(b)(2)–3.xi to
Supplement I of 12 CFR part 226
(Board); and
• Comment 35(c)(2)(ii)–3.xi to
Supplement I of 12 CFR part 1026
(Bureau).
These new comments state that, from
January 1, 2024, through December 31,
2024, the threshold amount is $32,400.
These revisions are effective January 1,
2024.
III. Regulatory Analysis
Administrative Procedure Act
Under the Administrative Procedure
Act, notice and opportunity for public
comment are not required if the agency
10 The Bureau of Labor Statistics calculates
consumer-based indices for each month but does
not report those indices until the middle of the
following month. As such, the most recently
reported indices as of June 1, 2023, were reported
on May 10, 2023, and reflect economic conditions
in April 2023.
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Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations
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 OCC, the Board, and the Bureau
have determined that it is unnecessary
to publish a general notice of proposed
rulemaking for this final rule.
Accordingly, the RFA’s requirements
relating to an initial and final regulatory
flexibility analysis do not apply.
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Paperwork Reduction Act
The information collections contained
in Regulation Z which implements TILA
are approved by OMB under Control
number 3170–0015. The current
approval for this control number expires
on May 31, 2026. In accordance with the
Paperwork Reduction Act of 1995,13 the
OCC, the Board, and the Bureau
reviewed this final rule. The OCC, the
Board, and the Bureau have determined
that this rule does not create any new
information collections or substantially
revise any existing collections.
Unfunded Mandates Reform Act
As a general matter, the Unfunded
Mandates Reform Act of 1995 (UMRA),
2 U.S.C. 1531 et seq., requires the
preparation of a budgetary impact
statement before promulgating a rule
that includes a Federal mandate that
may result in the expenditure by State,
local, and tribal governments, in the
aggregate, or by the private sector, of
$100 million or more in any one year.
However, the UMRA does not apply to
final rules for which a general notice of
proposed rulemaking was not
published. See 2 U.S.C. 1532(a).
Therefore, because the OCC has found
good cause to dispense with notice and
comment for this final rule, the OCC has
not prepared a budgetary impact
statement for the final rule under the
UMRA.
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 has
designated this rule as not a ‘‘major
rule’’ as defined by 5 U.S.C. 804(2).
finding and a brief statement of reasons
therefor in the rule issued) that notice
and public procedure thereon are
impracticable, unnecessary, or contrary
to the public interest.’’ 18 In light of the
fact that the final rule will have a de
minimis impact, delaying the effective
date of the final rule is unnecessary.
As required by the Congressional
Review Act, the OCC will submit the
final rule and other appropriate reports
to Congress and the Government
Accountability Office for review.
OCC Congressional Review Act
Statement
For purposes of the Congressional
Review Act, OMB makes a
determination as to whether a final rule
constitutes a ‘‘major’’ rule.14 If a rule is
deemed a ‘‘major rule’’ by OMB, the
Congressional Review Act generally
provides that the rule may not take
effect until at least 60 days following its
publication.15
The Congressional Review Act defines
a ‘‘major rule’’ as any rule that the
Administrator of the Office of
Information and Regulatory Affairs of
the OMB finds has resulted in or is
likely to result in (A) an annual effect
on the economy of $100,000,000 or
more; (B) a major increase in costs or
prices for consumers, individual
industries, Federal, State, or local
government agencies or geographic
regions, or (C) significant adverse effects
on competition, employment,
investment, productivity, innovation, or
on the ability of United States-based
enterprises to compete with foreignbased enterprises in domestic and
export markets.16 The OCC currently
supervises approximately 1,060 national
banks, federal savings associations, trust
companies and federal branches and
agencies of foreign banks (collectively,
banks).17 Based on the CPI–W in effect
as of June 1, 2023, this final rule will
increase the exemption threshold from
$31,000 to $32,400, effective January 1,
2024. The Office of Information and
Regulatory Affairs has designated this
rule as not a ‘‘major rule’’ as defined by
5 U.S.C. 804(2).
For the same reasons set forth above,
the OCC is adopting this final rule
without the delayed effective date
generally prescribed under the
Congressional Review Act. The delayed
effective date required by the
Congressional Review Act does not
apply to ‘‘any rule which an agency for
good cause finds (and incorporates the
List of Subjects
14 5
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.
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U.S.C. 801 et seq.
U.S.C. 801(a)(3).
16 5 U.S.C. 804(2).
17 Based on data as of February 28, 2023.
15 5
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12 CFR Part 34
Accounting, 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, Banks, banking,
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
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.,
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, paragraph
34.203(b)(2) is revised to read as
follows:
■
Appendix C to Subpart G—OCC
Interpretations
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Section 34.203—Appraisals for Higher-Priced
Mortgage Loans
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18 5
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U.S.C. 808(2).
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Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations
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
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.
viii. From January 1, 2021, through
December 31, 2021, the threshold amount is
$27,200.
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ix. From January 1, 2022, through
December 31, 2022, the threshold amount is
$28,500.
x. From January 1, 2023, through December
31, 2023, the threshold amount is $31,000.
xi. From January 1, 2024, through
December 31, 2024, the threshold amount is
$32,400.
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).
*
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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, paragraph 43(b)(2)
is revised to read as follows:
■
Supplement I to Part 226—Official Staff
Interpretations
*
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*
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Section 226.43—Appraisals for HigherRisk Mortgage Loans
*
*
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*
*
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
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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.
E:\FR\FM\29NOR1.SGM
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Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations
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.
viii. From January 1, 2021, through
December 31, 2021, the threshold
amount is $27,200.
ix. From January 1, 2022, through
December 31, 2022, the threshold
amount is $28,500.
x. From January 1, 2023, through
December 31, 2023, the threshold
amount is $31,000.
xi. From January 1, 2024, through
December 31, 2024, the threshold
amount is $32,400.
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 closedend 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).
*
*
*
*
*
CONSUMER FINANCIAL
PROTECTION BUREAU
Authority and Issuance
For the reasons set forth in the
preamble, the Bureau amends
Regulation Z, 12 CFR part 1026, as set
forth below:
ddrumheller on DSK120RN23PROD with RULES1
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
■
VerDate Sep<11>2014
16:24 Nov 28, 2023
Jkt 262001
Higher-Priced Mortgage Loans,
paragraph 35(c)(2)(ii) is revised 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
§ 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.
PO 00000
Frm 00011
Fmt 4700
Sfmt 4700
83315
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.
viii. From January 1, 2021, through
December 31, 2021, the threshold
amount is $27,200.
ix. From January 1, 2022, through
December 31, 2022, the threshold
amount is $28,500.
x. From January 1, 2023, through
December 31, 2023, the threshold
amount is $31,000.
xi. From January 1, 2024, through
December 31, 2024, the threshold
amount is $32,400.
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 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 closedend 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)
E:\FR\FM\29NOR1.SGM
29NOR1
83316
Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations
applies. See § 1026.35(c)(2) and
(c)(4)(vii).
*
*
*
*
*
Michael J. Hsu,
Acting 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.
Michele Taylor Fennell,
Deputy Associate Secretary of the Board.
Brian Shearer,
Senior Advisor, Consumer Financial
Protection Bureau.
[FR Doc. 2023–25047 Filed 11–28–23; 8:45 am]
BILLING CODE 4810–33–P; 6210–01–P; 4810–AM–P
I. Reserve Requirements
FEDERAL RESERVE SYSTEM
12 CFR Part 204
[Regulation D; Docket No. R–1823]
RIN 7100–AG71
Reserve Requirements of Depository
Institutions
Board of Governors of the
Federal Reserve System.
ACTION: Final rule.
AGENCY:
The Board is amending
Regulation D, Reserve Requirements of
Depository Institutions, to reflect the
annual indexing of the reserve
requirement exemption amount and the
low reserve tranche for 2024. The
annual indexation of these amounts is
required notwithstanding the Board’s
action in March 2020 of setting all
reserve requirement ratios to zero. The
reserve requirement exemption amount
for 2023 will remain $36.1 million,
unchanged for 2024, consistent with the
Federal Reserve Act (the ‘‘Act’’). The
Board is amending Regulation D to set
the amount of the low reserve tranche
at $644.0 million (decreased from
$691.7 million in 2023). The adjustment
to the low reserve tranche is derived
using a statutory formula specified in
the Act. The annual indexation of the
reserve requirement exemption amount
and low reserve tranche is required by
statute but will not affect depository
institutions’ reserve requirements,
which will remain zero.
DATES:
Effective date: December 29, 2023.
Compliance date: The new low
reserve tranche will apply beginning
January 1, 2024.
FOR FURTHER INFORMATION CONTACT:
Benjamin Snodgrass, Senior Counsel
(202/263–4877), Legal Division; Kristen
Payne, Lead Financial Institution and
ddrumheller on DSK120RN23PROD with RULES1
SUMMARY:
VerDate Sep<11>2014
16:24 Nov 28, 2023
Jkt 262001
Policy Analyst (202/452–2872), Division
of Monetary Affairs; for users of TTY/
TRS, please call 711 from any
telephone, anywhere in the United
States, or (202) 263–4869; Board of
Governors of the Federal Reserve
System, 20th and C Streets NW,
Washington, DC 20551.
SUPPLEMENTARY INFORMATION: Section
19(b)(2) of the Act (12 U.S.C. 461(b)(2))
requires each depository institution to
maintain reserves against its transaction
accounts and nonpersonal time
deposits, as prescribed by Board
regulations, for the purpose of
implementing monetary policy. The
Board’s actions with respect to this
provision are discussed below.
Section 19(b) of the Act authorizes
different ranges of reserve requirement
ratios depending on the amount of
transaction account balances at a
depository institution. Section
19(b)(11)(A) of the Act (12 U.S.C.
461(b)(11)(A)) provides that a zero
percent reserve requirement ratio shall
apply at each depository institution to
total reservable liabilities that do not
exceed a certain amount, known as the
reserve requirement exemption amount.
Section 19(b)(11)(B) provides that,
before December 31 of each year, the
Board shall issue a regulation adjusting
the reserve requirement exemption
amount for the next calendar year if
total reservable liabilities held at all
depository institutions increase from
one year to the next. The Act requires
the percentage increase in the reserve
requirement exemption amount to be 80
percent of the percentage increase in
total reservable liabilities of all
depository institutions over the one-year
period that ends on the June 30 prior to
the adjustment. No adjustment is made
to the reserve requirement exemption
amount if total reservable liabilities held
at all depository institutions should
decrease during the applicable time
period.
Total reservable liabilities of all
depository institutions decreased by 8.6
percent, from $20,841 billion to $19,057
billion, between June 30, 2022, and June
30, 2023.1 Accordingly, the reserve
requirement exemption amount for 2024
will remain at $36.1 million, unchanged
from its level in 2023.2
1 The June 30th value for 2022 may differ from
the value used in the previous year’s calculation
because depository institutions may revise their
deposit data to correct for inaccuracies.
2 Consistent with Board practice, the low reserve
tranche and reserve requirement exemption
amounts have been rounded to the nearest $0.1
million.
PO 00000
Frm 00012
Fmt 4700
Sfmt 4700
Pursuant to Section 19(b)(2) of the Act
(12 U.S.C. 461(b)(2)), transaction
account balances maintained at each
depository institution over the reserve
requirement exemption amount and up
to a certain amount, known as the low
reserve tranche, may be subject to a
reserve requirement ratio of not more
than 3 percent (and which may be zero).
Transaction account balances over the
low reserve tranche may be subject to a
reserve requirement ratio of not more
than 14 percent (and which may be
zero). Section 19(b)(2) also provides
that, before December 31 of each year,
the Board shall issue a regulation
adjusting the low reserve tranche for the
next calendar year. The Act requires the
adjustment in the low reserve tranche to
be 80 percent of the percentage increase
or decrease in total transaction accounts
of all depository institutions over the
one-year period that ends on the June 30
prior to the adjustment.
Net transaction accounts of all
depository institutions decreased 8.6
percent, from $17,549 billion to $16,037
billion, between June 30, 2022, and June
30, 2023.3 Accordingly, the Board is
amending Regulation D to set the low
reserve tranche for net transaction
accounts for 2024 at $644.0 million, a
decrease of $47.7 million from 2023.
The new low reserve tranche will be
effective for all depository institutions
beginning January 1, 2024.
Effective March 26, 2020, the Board
reduced reserve requirement ratios on
all net transaction accounts to zero
percent, eliminating reserve
requirements for all depository
institutions. The annual indexation of
the reserve requirement exemption
amount and the low reserve tranche for
2024 is required by statute but will not
affect depository institutions’ reserve
requirements, which will remain zero.
II. Regulatory Analysis
Administrative Procedure Act
The provisions of 5 U.S.C. 553(b)
relating to notice of proposed
rulemaking have not been followed in
connection with the adoption of these
amendments. The amendments involve
expected, ministerial adjustments
prescribed by statute and by the Board’s
policy concerning reporting practices.
The adjustments in the reserve
requirement exemption amount and the
low reserve tranche serve to reduce
regulatory burdens on depository
institutions. Accordingly, the Board
finds good cause for determining, and so
3 The June 30th value for 2022 may differ from
the value used in the previous year’s calculation
because depository institutions may revise their
deposit data to correct for inaccuracies.
E:\FR\FM\29NOR1.SGM
29NOR1
]]>Agencies
[Federal Register Volume 88, Number 228 (Wednesday, November 29, 2023)]
[Rules and Regulations]
[Pages 83311-83316]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-25047]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 34
[Docket No. OCC-2023-0012]
RIN 1557-AF23
FEDERAL RESERVE SYSTEM
12 CFR Part 226
[Docket No. R-1819]
RIN 7100-AG19
CONSUMER FINANCIAL PROTECTION BUREAU
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 Consumer
Financial Protection Bureau (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) jointly issued 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. Additionally, in years
following a year in which the exemption threshold was not adjusted
because the CPI-W decreased, the threshold is calculated by applying
the annual percentage increase in the CPI-W to the dollar amount that
[[Page 83312]]
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, 2023, the exemption threshold will
increase from $31,000 to $32,400, effective January 1, 2024.
DATES: This final rule is effective January 1, 2024.
FOR FURTHER INFORMATION CONTACT:
OCC: MaryAnn Nash, Counsel, Chief Counsel's Office, Office of the
Comptroller of the Currency, at (202) 649-6287. If you are deaf, hard
of hearing, or have a speech disability, please dial 7-1-1 to access
telecommunications relay services.
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 TTY-TRS, please call 711 from any
telephone, anywhere in the United States.
Bureau: Anna Boadwee and Adrien Fernandez, Attorney-Advisors,
Office of Regulations, Consumer Financial Protection Bureau, 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 TILA to add special appraisal
requirements for ``higher-risk mortgages.'' \1\ In January 2013, the
Agencies jointly issued a 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.\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, the Board's, and the 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 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 OCC, the Board, and the Bureau 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 the 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. 2024 Adjustment and Commentary Revision
Effective January 1, 2024, the exemption threshold amount will
increase from $31,000 to $32,400. This amount is based on the CPI-W in
effect on June 1, 2023, which was reported on May 10, 2023 (based on
April 2023 data).\10\ The CPI-W is a subset of the CPI-U index (based
on all urban consumers) and represents approximately 30 percent of the
U.S. population. The CPI-W reported on May 10, 2023, reflects a 4.6
percent increase in the CPI-W from April 2022 to April 2023.
Accordingly, the 4.6 percent increase in the CPI-W from April 2022 to
April 2023 results in an exemption threshold amount of $32,400, after
rounding. The OCC, the Board, and the Bureau are revising the
commentaries to their respective regulations to add new comments as
follows:
---------------------------------------------------------------------------
\10\ The Bureau of Labor Statistics calculates consumer-based
indices for each month but does not report those indices until the
middle of the following month. As such, the most recently reported
indices as of June 1, 2023, were reported on May 10, 2023, and
reflect economic conditions in April 2023.
---------------------------------------------------------------------------
Comment 203(b)(2)-3.xi to 12 CFR part 34, Appendix C to
Subpart G (OCC);
Comment 43(b)(2)-3.xi to Supplement I of 12 CFR part 226
(Board); and
Comment 35(c)(2)(ii)-3.xi to Supplement I of 12 CFR part
1026 (Bureau).
These new comments state that, from January 1, 2024, through
December 31, 2024, the threshold amount is $32,400. These revisions are
effective January 1, 2024.
III. Regulatory Analysis
Administrative Procedure Act
Under the Administrative Procedure Act, notice and opportunity for
public comment are not required if the agency
[[Page 83313]]
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 OCC, the Board, and the Bureau have determined
that it is unnecessary to publish a general notice of proposed
rulemaking for this 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
The information collections contained in Regulation Z which
implements TILA are approved by OMB under Control number 3170-0015. The
current approval for this control number expires on May 31, 2026. In
accordance with the Paperwork Reduction Act of 1995,\13\ the OCC, the
Board, and the Bureau reviewed this final rule. The OCC, the Board, and
the Bureau have determined that this rule does not create any new
information collections or substantially revise any existing
collections.
---------------------------------------------------------------------------
\13\ 44 U.S.C. 3506; 5 CFR part 1320.
---------------------------------------------------------------------------
Unfunded Mandates Reform Act
As a general matter, the Unfunded Mandates Reform Act of 1995
(UMRA), 2 U.S.C. 1531 et seq., requires the preparation of a budgetary
impact statement before promulgating a rule that includes a Federal
mandate that may result in the expenditure by State, local, and tribal
governments, in the aggregate, or by the private sector, of $100
million or more in any one year. However, the UMRA does not apply to
final rules for which a general notice of proposed rulemaking was not
published. See 2 U.S.C. 1532(a). Therefore, because the OCC has found
good cause to dispense with notice and comment for this final rule, the
OCC has not prepared a budgetary impact statement for the final rule
under the UMRA.
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 has designated
this rule as not a ``major rule'' as defined by 5 U.S.C. 804(2).
OCC Congressional Review Act Statement
For purposes of the Congressional Review Act, OMB makes a
determination as to whether a final rule constitutes a ``major''
rule.\14\ If a rule is deemed a ``major rule'' by OMB, the
Congressional Review Act generally provides that the rule may not take
effect until at least 60 days following its publication.\15\
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\14\ 5 U.S.C. 801 et seq.
\15\ 5 U.S.C. 801(a)(3).
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The Congressional Review Act defines a ``major rule'' as any rule
that the Administrator of the Office of Information and Regulatory
Affairs of the OMB finds has resulted in or is likely to result in (A)
an annual effect on the economy of $100,000,000 or more; (B) a major
increase in costs or prices for consumers, individual industries,
Federal, State, or local government agencies or geographic regions, or
(C) significant adverse effects on competition, employment, investment,
productivity, innovation, or on the ability of United States-based
enterprises to compete with foreign-based enterprises in domestic and
export markets.\16\ The OCC currently supervises approximately 1,060
national banks, federal savings associations, trust companies and
federal branches and agencies of foreign banks (collectively,
banks).\17\ Based on the CPI-W in effect as of June 1, 2023, this final
rule will increase the exemption threshold from $31,000 to $32,400,
effective January 1, 2024. The Office of Information and Regulatory
Affairs has designated this rule as not a ``major rule'' as defined by
5 U.S.C. 804(2).
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\16\ 5 U.S.C. 804(2).
\17\ Based on data as of February 28, 2023.
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For the same reasons set forth above, the OCC is adopting this
final rule without the delayed effective date generally prescribed
under the Congressional Review Act. The delayed effective date required
by the Congressional Review Act does not apply to ``any rule which an
agency for good cause finds (and incorporates the finding and a brief
statement of reasons therefor in the rule issued) that notice and
public procedure thereon are impracticable, unnecessary, or contrary to
the public interest.'' \18\ In light of the fact that the final rule
will have a de minimis impact, delaying the effective date of the final
rule is unnecessary.
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\18\ 5 U.S.C. 808(2).
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As required by the Congressional Review Act, the OCC will submit
the final rule and other appropriate reports to Congress and the
Government Accountability Office for review.
List of Subjects
12 CFR Part 34
Accounting, 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, Banks, banking, 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.,
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, paragraph 34.203(b)(2) is revised to read
as follows:
Appendix C to Subpart G--OCC Interpretations
* * * * *
Section 34.203--Appraisals for Higher-Priced Mortgage Loans
* * * * *
[[Page 83314]]
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.
viii. From January 1, 2021, through December 31, 2021, the
threshold amount is $27,200.
ix. From January 1, 2022, through December 31, 2022, the
threshold amount is $28,500.
x. From January 1, 2023, through December 31, 2023, the
threshold amount is $31,000.
xi. From January 1, 2024, through December 31, 2024, the
threshold amount is $32,400.
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, paragraph 43(b)(2) is revised to read as
follows:
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.
[[Page 83315]]
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.
viii. From January 1, 2021, through December 31, 2021, the
threshold amount is $27,200.
ix. From January 1, 2022, through December 31, 2022, the threshold
amount is $28,500.
x. From January 1, 2023, through December 31, 2023, the threshold
amount is $31,000.
xi. From January 1, 2024, through December 31, 2024, the threshold
amount is $32,400.
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).
* * * * *
CONSUMER FINANCIAL PROTECTION BUREAU
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, paragraph 35(c)(2)(ii) is revised 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.
viii. From January 1, 2021, through December 31, 2021, the
threshold amount is $27,200.
ix. From January 1, 2022, through December 31, 2022, the threshold
amount is $28,500.
x. From January 1, 2023, through December 31, 2023, the threshold
amount is $31,000.
xi. From January 1, 2024, through December 31, 2024, the threshold
amount is $32,400.
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 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)
[[Page 83316]]
applies. See Sec. 1026.35(c)(2) and (c)(4)(vii).
* * * * *
Michael J. Hsu,
Acting 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.
Michele Taylor Fennell,
Deputy Associate Secretary of the Board.
Brian Shearer,
Senior Advisor, Consumer Financial Protection Bureau.
[FR Doc. 2023-25047 Filed 11-28-23; 8:45 am]
BILLING CODE 4810-33-P; 6210-01-P; 4810-AM-P
