does reg b cover collection procedures

Application-by-application basis. [15] (ii) Section 1002.12(b) relating to record retention. 1691 et seq., 12 CFR part 1002. A creditor can satisfy this requirement by recording on paper or by means of computer the information that the applicant provides orally and that the creditor normally considers in a credit decision. should verify the contents of the documents against a final, official The changes to Regulation B in this rule are summarized briefly in this section and discussed in detail below. The Enterprises, currently under the conservatorship of the Federal Housing Finance Agency (FHFA), prepare and periodically revise the URLA used by many lenders for certain dwelling-related loans. Credit denial is the rejection of a credit application by a prospective lender, usually due to its assessment that the applicant is not creditworthy. The Bureau has consulted, or offered to consult with, the prudential regulators (the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency), the Securities and Exchange Commission, the Department of Justice, the Department of Housing and Urban Development, the Federal Housing Finance Agency, the Federal Trade Commission, the Department of Veterans Affairs, the Department of Agriculture, and the Department of the Treasury, including regarding consistency with any prudential, market or systematic objectives administered by such agencies. The consumer and the financial institution (including an account for which an access device has been issued to the consumer, for example); ii. However, the Bureau believes it may impose costs on consumers. The OFR/GPO partnership is committed to presenting accurate and reliable 44. For the reasons provided below, the Bureau is adopting 1002.13(a) and comments 13(a)-7 and 13(a)-8 as proposed. It is not required to store the complete written application, nor is it required to enter the remaining items of information into the system. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School for Social Research and Doctor of Philosophy in English literature from NYU. Appendix B to 12 CFR part 1003 provides a data collection model form for collecting information concerning an applicant's ethnicity, race, and sex that complies with the requirements of 1002.13(a)(1)(i)(B) and (ii). headings within the legal text of Federal Register documents. Dodd-Frank Act Section 1022(b) Analysis, B. [44] Section 1002.13 applies only to applications from natural persons. Similarly, because the substance and form of section 7 of the 2016 URLA is substantially similar to the form the Bureau provides as a model form in Regulation C, the 2016 URLA may be used in complying with 1002.13. The rule makes certain changes to the Regulation B appendix. In addition, the Bureau proposed to add commentary for 1002.5(a)(4) to provide guidance and proposed amendments to comment 5(a)(2)-2 to make conforming changes and further align Regulation B and revised Regulation C. Section 1002.5(a)(2) provides that, notwithstanding the limitations in 1002.5(b) through (d) on collecting protected applicant-characteristic information and other applicant information, a creditor shall request information for monitoring purposes as required by 1002.13. The Enterprises, not the Bureau, mandate the adoption of the 2016 URLA. One industry commenter proposed permitting collection for dwelling-secured loans made primarily for a business or commercial purpose that might be covered loans, regardless of whether or not they are for the purpose of home purchase, refinancing, or home improvement and therefore reportable under revised Regulation C. Under revised Regulation C, dwelling-secured loans made primarily for a business or commercial purpose are only required to be reported if they meet the definition of a home purchase, refinancing, or home improvement loan. In support, one of the commenters cited a report finding that 10 million Americans change their racial and ethnic identifications between U.S. Census surveys. Without Regulation B's explanation requirement, many potential borrowers with errors in their credit reports would become discouraged and give up. No commenters provided such data. Congress enacted the ECOA to ensure that financial institutions and firms dealing with credit make it equally available to all creditworthy customers. 33. A creditor that uses a computerized or mechanized system Start Printed Page 45696need not keep a paper copy of a document (for example, of an adverse action notice) if it can regenerate all pertinent information in a timely manner for examination or other purposes. Thus, the final rule has the added benefit that it will allow Regulation B-only creditors to use the 2016 URLA as an instrument to collect race and ethnicity information. For Regulation B creditors making mortgage loans subject to 1002.13, the rule will allow creditors to collect the applicant's information using either the aggregate ethnicity and race categories or disaggregated ethnicity and race categories and subcategories, as set forth in appendix B to Regulation C (the Regulation C appendix) as amended by Written applications. Section 1002.12(b)(1) provides that a creditor must retain certain records for 25 months, or 12 months for business credit. 1. Under Regulation B, a lender may not request information about an applicants sex, national origin, color, or other information not related to creditworthiness. Redlining is an unethical and illegal practice that denies loans or services to people living in majority-minority communities. This table of contents is a navigational tool, processed from the When originally enacted, ECOA gave the Federal Reserve Board responsibility for prescribing the implementing regulation. 12 U.S.C. These proposed changes included establishing applicant demographic information collection, reporting, and public disclosure requirements for automobile creditors similar to HMDA, requiring adverse action notices in certain situations involving counteroffers, and adding record-keeping and applicant demographic information collection requirements for brokers and arrangers of credit. Unlike prior versions of the URLA, the 2016 URLA permits an applicant to select disaggregated ethnicity and race categories, as required under revised Regulation C. Given the issuance of the Bureau Approval Notice and the modifications to 1002.13, the Bureau proposed several revisions to the Regulation B appendix as discussed below. aJKvqC[+>G5Ci"95,Tk#qCsdtx\/TXCjJ5 &t\A%+gkp# Regulation C implements HMDA and sets out specific requirements for the collection, recording, reporting, and disclosure of mortgage lending information, including a requirement to collect and report applicant demographic information. Inadvertent notation. electronic version on GPOs govinfo.gov. In this Issue, Documents offers a preview of documents scheduled to appear in the next day's 3 All forms contained in this appendix are models; their use by creditors is optional. (In this document, current Regulation C refers to Regulation C prior to January 1, 2018, and revised Regulation C refers to Regulation C as it will be in effect on or after January 1, 2018, as amended by the 2015 HMDA Final Rule.) @*EtJ '_whyb.v'Yc:E| t%]C@bkBZSAqqu`2B6G\#; That is, the CFPB interprets FDCPA section 808 (1) to permit collection of an amount only if: (1) the agreement creating the debt expressly permits the charge and some law does not prohibit it; or (2) some law expressly permits the charge, even if the agreement creating the debt is silent. Fannie Mae, Selling Guide: Single Family Seller Servicer, at B1-1-01 (Dec. 16, 2014), available at https://www.fanniemae.com/content/guide/selling/b1/1/01.html;; Freddie Mac, Single-Family Seller/Servicer Guide (Sep. 21, 2016), 3401.7, available at http://www.freddiemac.com/singlefamily/guide/bulletins/snapshot.html. [39] (12 USC 5514(a)(1)(B)). He has 8 years experience in finance, from financial planning and wealth management to corporate finance and FP&A. Cookies collect information about your preferences and your devices and are used to make the site work as you expect it to, to understand how you interact with the site, and to show advertisements that are targeted to your interests. documents in the last year, 20 Two commenters supported the proposal regarding record retention, noting that it would facilitate Start Printed Page 45686monitoring of fair lending laws and serve ECOA's purposes and that it seemed appropriate given the proposed amendments to 1002.5(a)(4). The Bureau received some comments on the topic. Section 1002.5(a)(2) further provides that a creditor may obtain information required by a regulation, order, or agreement issued by, or entered into with, a court or an enforcement agency to monitor or enforce compliance with ECOA, Regulation B, or other Federal or State statutes and regulations. This final rule adopts the proposed rule without making changes that would affect the Bureau's conclusion that the rule will not have a significant economic impact on any small entities. ii. Regulation B also includes certain optional model forms for use in complying with certain Regulation B requirements, including a model form for complying with 1002.13 that is a 2004 version of the Uniform Residential Loan Application (URLA) issued by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, the Enterprises). regulatory information on FederalRegister.gov with the objective of 210.4 Sending items to Reserve Banks. An industry service provider also supported a uniform standard based on the requirements in revised Regulation C in order to reduce the costs of supporting dual collection methods. ECOA authorizes the Bureau to issue regulations to carry out the purposes of ECOA. The Bureau further received questions related to the Bureau Approval Notice about whether the approval for collecting disaggregated ethnicity and race categories under Regulation B in 2017 would be extended to 2018. Two industry commenters proposed two alternative voluntary collection authorizations that would replace proposed 1002.5(a)(4). [3] The rule amends the Regulation B appendix to provide two options: A model form for collecting aggregate applicant race and ethnicity information and a cross-reference to the Regulation C appendix model form for collecting disaggregated applicant race and ethnicity information. Federal Reserve. 1. in Chip Stapleton is a Series 7 and Series 66 license holder, CFA Level 1 exam holder, and currently holds a Life, Accident, and Health License in Indiana. Legal text of Federal Register documents ( 1 ) ( 4 ) &.! Equally available to all creditworthy customers the rule makes certain changes to the Regulation B 's explanation requirement many... 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