80 FR 22091 - Homeownership Counseling Organizations Lists and High-Cost Mortgage Counseling Interpretive Rule
BUREAU OF CONSUMER FINANCIAL PROTECTION Federal Register Volume 80, Issue 76 (April 21, 2015)
Federal Register Volume 80, Issue 76 (April 21, 2015)
| Page Range | 22091-22094 | |
| FR Document | 2015-09244 |
[Federal Register Volume 80, Number 76 (Tuesday, April 21, 2015)] [Rules and Regulations] [Pages 22091-22094] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-09244] ======================================================================== Rules and Regulations Federal Register ________________________________________________________________________ This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. Prices of new books are listed in the first FEDERAL REGISTER issue of each week. ======================================================================== Federal Register / Vol. 80, No. 76 / Tuesday, April 21, 2015 / Rules and Regulations [[Page 22091]] BUREAU OF CONSUMER FINANCIAL PROTECTION 12 CFR Parts 1024 and 1026 RIN 3170-AA52 Homeownership Counseling Organizations Lists and High-Cost Mortgage Counseling Interpretive Rule AGENCY: Bureau of Consumer Financial Protection. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is reissuing a prior interpretive rule regarding the provision of lists of HUD-approved housing counseling agencies to mortgage loan applicants with additional interpretations describing permissible addresses for list generation, as well as additional details for generation. This interpretive rule also provides guidance, in addition to existing commentary, on the qualifications for providing high-cost mortgage counseling and on lender participation in such counseling. This interpretive rule continues to describe data instructions for lenders to use in complying with the requirement under the High-Cost Mortgage and Homeownership Counseling Amendments to the Truth in Lending Act (Regulation Z) and Homeownership Counseling Amendments to the Real Estate Settlement Procedures Act (RESPA Homeownership Counseling Amendments) Final Rule to provide a homeownership counseling list using data made available by the Bureau or Department of Housing and Urban Development (HUD). DATES: This rule is effective April 21, 2015. FOR FURTHER INFORMATION CONTACT: Rachel Ross, Special Assistant; Nicholas Hluchyj, Senior Counsel; Office of Regulations, Consumer Financial Protection Bureau, 1700 G Street NW., at (202) 435-7700. SUPPLEMENTARY INFORMATION: I. Background The Bureau previously issued an interpretive rule \1\ (2013 HC Interpretive Rule) to assist lender compliance with the homeownership counseling list requirements of High-Cost Mortgage and Homeownership Counseling Amendments to the Truth in Lending Act (Regulation Z) and Homeownership Counseling Amendments to the Real Estate Settlement Procedures Act (RESPA Homeownership Counseling Amendments) Final Rule (2013 HOEPA Final Rule). Based on input the Bureau has received through informal discussion and outreach with stakeholders, the Bureau is issuing this interpretive rule, which substantively restates the guidance in the 2013 HC Interpretive Rule and adds further guidance to address additional questions stakeholders have raised. Specifically, the Bureau has received questions about: (1) How to provide applicants abroad with homeownership counseling lists; (2) permissible geolocation tools; (3) combining the homeownership counseling list with other disclosures; and (4) use of a consumer's mailing address to provide the list. The Bureau has also received questions and requests for guidance about the high-cost mortgage counseling requirements in the 2013 HOEPA Final Rule, specifically concerning counselor qualifications to provide such counseling and lender participation in high-cost mortgage counseling. --------------------------------------------------------------------------- \1\ 78 FR 68343 (Nov. 14, 2013). --------------------------------------------------------------------------- To facilitate compliance and make the Bureau's guidance on these questions more generally accessible, the Bureau is issuing this official Bureau interpretation to add guidance to the 2013 HC Interpretive Rule to address these additional issues. Along with the new guidance, the instructions in the 2013 HC Interpretive Rule are republished here substantively as previously issued to keep all of this related information together for the convenience of stakeholders. New material is added to parts II. B, Location by Zip Code, and D, Accompanying Information, and new parts II. E and III. are added to discuss combining the homeownership counseling list with other disclosures and high-cost mortgage counseling, respectively.\2\ --------------------------------------------------------------------------- \2\ The discussion in this interpretive rule uses the terms ``lender'' or ``creditor,'' as appropriate. Part II, which addresses Regulation X, uses the term ``lender'' consistent with Regulation X. Part III, which addresses Regulation Z, uses the term ``creditor'' consistent with Regulation Z. --------------------------------------------------------------------------- In January 2013, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), Public Law 111-203, 124 Stat. 1375 (2010), the Bureau issued the 2013 HOEPA Final Rule.\3\ The 2013 HOEPA Final Rule implemented numerous Dodd-Frank Act requirements. Section 1450 of the Dodd-Frank Act amended section 5(c) of the Real Estate Settlement Procedures Act (RESPA) to require lenders to provide federally related mortgage loan applicants with a ``reasonably complete or updated list of homeownership counselors who are certified pursuant to section 106(e) of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(e)) and located in the area of the lender.'' \4\ The RESPA Homeownership Counseling Amendments implement this section 1450 amendment in Regulation X Sec. 1024.20(a). --------------------------------------------------------------------------- \3\ 78 FR 6855 (Jan. 31, 2013). \4\ Section 106(e) of the Housing and Urban Development Act of 1968, 12 U.S.C. 1701x(e), requires that homeownership counseling provided under programs administered by HUD can be provided only by organizations or individuals certified by HUD as competent to provide homeownership counseling. Section 106(e) also requires HUD to establish standards and procedures for testing and certifying counselors. --------------------------------------------------------------------------- In implementing this Dodd-Frank Act requirement, Sec. 1024.20(a)(1) requires lenders to provide the loan applicant with a written list of homeownership counseling organizations that provide relevant services in the loan applicant's location. The Bureau specified two compliance methods for obtaining this list: (1) Using a tool developed and maintained by the Bureau on its Web site,\5\ or (2) using data made available by the Bureau or HUD, provided that the data are used in accordance with instructions provided with the data.\6\ The Bureau noted the use of the data in accordance with these instructions would produce a list consistent with what would have been generated if the [[Page 22092]] tool had been used.\7\ This rule interprets Sec. 1024.20(a)(1) of Regulation X, as adopted by the RESPA Homeownership Counseling Amendments, and describes those data instructions. --------------------------------------------------------------------------- \5\ See www.consumerfinance.gov/find-a-housing-counselor. \6\ These two pathways are specified in Sec. 1024.20(a)(1)(i) and (ii), respectively. \7\ 78 FR 6865 (Jan. 31, 2013). --------------------------------------------------------------------------- The Bureau's tool, as discussed in Sec. 1024.20(a)(1)(i), follows these data instructions. II. List and Data Instructions This rule interprets the Regulation X Sec. 1024.20(a)(1) requirement for lenders to provide a list of homeownership counseling organizations and to obtain the list from data made available by the Bureau or HUD, provided the data are used in accordance with instructions provided with the data.\8\ This rule describes instructions for lenders to use in complying with the Sec. 1024.20(a)(1)(ii) requirement to generate a list of homeownership counseling organizations by using data provided by the Bureau or HUD. --------------------------------------------------------------------------- \8\ RESPA and Sec. 1024.20(a)(1) refer to counseling entities as Homeownership Counseling Organizations. HUD refers to them as HUD-approved Housing Counseling Agencies. Homeownership Counseling Organizations as referred to in Sec. 1024.20(a)(1) and this rule are HUD-approved Housing Counseling Agencies. --------------------------------------------------------------------------- HUD currently provides the data needed to comply with the Regulation X Sec. 1024.20(a)(1) list requirement. HUD maintains a free and publicly available application programming interface (API) containing data on HUD-approved housing counseling agencies (HUD API). Although it appears on this site that a token is required to use the data, credentials are not required to access and use the data. These data instructions are designed to be applied with publicly available homeownership counselor agency data from HUD,\9\ as referenced in Sec. 1024.20(a)(1)(ii). The Bureau also has a summary of the data instructions available on the Bureau's Web site, along with a link to the publicly available housing counseling agency data.\10\ --------------------------------------------------------------------------- \9\ Available at: http://data.hud.gov/housing_counseling.html. \10\ Summary of Data instructions available at http://files.consumerfinance.gov/f/201311_cfpb_summary_homeownership-counseling.pdf. Homeownership Counseling Organization data is available at http://data.hud.gov/housing_counseling.html. --------------------------------------------------------------------------- A. Number of Homeownership Counselors To Appear on List Regulation X Sec. 1024.20(a)(1) requires lenders to provide a written list of homeownership counseling organizations. Consistent with Sec. 1024.20(a)(1), lenders comply with this requirement when they provide a list of ten HUD-approved housing counseling agencies. The tool maintained by the Bureau will generate a list of ten HUD-approved housing counseling agencies. A lender-generated list under Sec. 1024.20(a)(1)(ii) complies with Sec. 1024.20(a)(1) when the same number of counseling agencies are provided. Listing ten housing counseling agencies ensures fairness and equity among housing counseling agencies, by offering loan applicants a thorough and diverse list of counseling options. B. Location by Zip Code Regulation X 1024.20(a)(1) requires lenders to provide a written list of homeownership counseling organizations in the loan applicant's location. As the Bureau discussed in the RESPA Homeownership Counseling Amendments, lenders comply with Sec. 1024.20(a)(1) when they use the loan applicant's five-digit zip code to generate a list of the ten closest HUD-approved housing counseling agencies to the centroid of the zip code of the loan applicant's current address, in descending order of proximity to the centroid. Lenders are also permitted to generate the list from a more precise geographic marker, such as a street address. The loan applicant's current zip code satisfies the requirement that the homeownership counseling organizations be in the loan applicant's location. The zip code of the loan applicant's current address generally is the default to be entered for list generation, subject to additional guidance below concerning use of the loan applicant's mailing address and circumstances where a zip code is not available. Lenders may offer loan applicants the option of generating the list from a zip code different than their home address or from a more precise geographic marker such as a street address, but lenders are not required to offer such an option. The Bureau's tool will permit generating the list of HUD-approved housing counseling agencies through entry of zip code. A lender-generated list pursuant to Sec. 1024.20(a)(1)(ii) complies with Sec. 1024.20(a)(1) when the lender generates the list through entry of zip code or from a more precise geographic marker such as a street address. Lenders generating a list pursuant to Sec. 1024.20(a)(1)(ii) through zip code or from a more precise geographic marker such as a street address will ensure that lists generated under this provision are obtained through similar means as those generated through the Bureau's tool, pursuant to Sec. 1024.20(a)(1)(i), thus ensuring consistency. In circumstances where the applicant's current address does not include a five-digit zip code, e.g., the applicant currently lives overseas, making it impossible to generate a list based on the zip code of the applicant's current address, the lender may use the five-digit zip code of the property securing the mortgage to generate the list. Additionally, there may be circumstances where an applicant's current and mailing addresses are different. For example, an applicant residing in a remote area may receive mail at a post office box. In the case in which an applicant's current and mailing address are different, a lender using an applicant's mailing address instead of the current address to generate the list would be consistent with the requirement that the list be generated based upon the loan applicant's location. Consistent with the previous paragraph, a lender may also use an applicant's mailing address to generate a list if the mailing address includes a zip code but the current address does not. The Bureau's tool, as discussed in Sec. 1024.20(a)(1)(i) and above, uses a third-party, commercially-available geolocation tool to match counseling organizations to a zip code. A lender is not required to use the same geolocator or geocoding system as the Bureau, so long as the results are generated in accordance with Sec. 1024.20 and these instructions, thus ensuring general consistency. C. Homeownership Counselor Contact Information Regulation X Sec. 1024.20(a)(1) requires lenders to provide a written list of homeownership counseling organizations that provide relevant services in the loan applicant's location. Consistent with Sec. 1024.20(a)(1), lenders comply when they provide the following data fields for each housing counseling agency on the list to the extent that they are available through the HUD API: Agency name, phone number, street address, street address continued, city, state, zip code, Web site URL, email address, counseling services provided, and languages spoken. Providing a street address is preferable to providing a mailing address, as available. The tool maintained by the Bureau will provide these data fields to the extent that they are available through the HUD API. A lender-generated list under Sec. 1024.20(a)(1)(ii) complies with Sec. 1024.20(a)(1) when these data fields are provided to the extent that they are available through the HUD API. The table below describes how the HUD API data fields relate to the above required data fields: [[Page 22093]] ---------------------------------------------------------------------------------------------------------------- Data element required for list HUD field for each agency HUD API field name definition Example --------------------------------------------------------------------------------------------------------------- Agency name..................... nme............... Agency name....... ``Local Counseling Agency''......... Phone number.................... phone1............ Phone number...... ``555-555-5555''.................... Street address.................. adr1.............. Street Address.... ``1234 Main Street''................ Street address continued........ adr2.............. Street Address .................................... continued. City............................ city.............. City.............. ``Anytown''......................... State........................... statecd........... Code for state in ``PA''.............................. which agency is located. Zip code........................ zipcd............. Zip Code.......... ``12345''........................... Website URL..................... weburl............ Agency Web Site ``http://www.counselor.org''........ address. Email address................... email............. Email address..... ``[email protected]''......... Counseling services provided.... Services.......... Types of ``DFC, FBC, FHW, HIC, HMC, NDW, PLW, Counseling PPC, PPW, RHC'' \11\. Services available. Languages spoken................ languages......... The languages in ``ENG''............................. which agency provides services. ---------------------------------------------------------------------------------------------------------------- Data fields that are populated with codes not commonly understood by loan applicants, including the data fields ``Counseling services provided'' and ``Languages spoken,'' should be translated into their definitional meanings, according to the Data Dictionary,\7\ to ensure clarity. --------------------------------------------------------------------------- \11\ A data dictionary for the Field ``Services'' can be found at http://data.hud.gov/Housing_Counselor/getServices, and a data dictionary for ``Languages'' can be found at http://data.hud.gov/Housing_Counselor/getLanguages. --------------------------------------------------------------------------- D. Accompanying Information Lenders comply with Regulation X Sec. 1024.20(a)(1) when the following language is included: ``The counseling agencies on this list are approved by the U.S. Department of Housing and Urban Development (HUD), and they can offer independent advice about whether a particular set of mortgage loan terms is a good fit based on your objectives and circumstances, often at little or no cost to you. This list shows you several approved agencies in your area. You can find other approved counseling agencies at the Consumer Financial Protection Bureau's (CFPB) Web site: consumerfinance.gov/mortgagehelp or by calling 1-855- 411-CFPB (2372). You can also access a list of nationwide HUD-approved counseling intermediaries at http://portal.hud.gov/hudportal/HUD?src=/ohc_nint.'' Including information about where loan applicants can gain additional information is consistent with the Bureau's preamble discussion of how it envisioned implementing the Sec. 1024.20(a)(1) list requirement in the RESPA Homeownership Counseling Amendments.\12\ Giving loan applicants the link to HUD-approved national counseling intermediaries offers loan applicants additional housing counseling options, as national intermediaries often offer phone counseling and online counseling services, which are particularly useful to loan applicants in remote areas or areas with fewer counseling agencies or loan applicants who work during normal business hours and require alternative meeting time options. The Bureau's tool will generate lists under Sec. 1024.20(a)(1)(i) that include this text above. By including this information, lenders generating lists under Sec. 1024.20(a)(1)(ii) will comply with Sec. 1024.20(a)(1). This will ensure that information provided under this provision is consistent with information accompanying lists generated by the Bureau's Web site, thus ensuring consistency. --------------------------------------------------------------------------- \12\ See 78 FR 6855 (Jan. 31, 2013) (``The Bureau anticipates the lists generated through its tool will also include information enabling the consumer to access the Bureau or HUD list of homeownership counseling organizations, so that an applicant who receives the list can obtain information about additional counseling organizations if desired.''). --------------------------------------------------------------------------- E. Combining the List With Other Disclosures. Section 5(c) of RESPA does not specify whether the written list may be combined with other disclosures. In the 2013 HOEPA Final Rule, the Bureau noted it did not receive any comments concerning the ability to combine disclosures. The Bureau finalized the combined disclosure allowance in Sec. 1024.20(a)(2), which provides that the ``list of homeownership counseling organizations provided under this section may be combined and provided with other mortgage loan disclosures required pursuant to Regulation Z, 12 CFR part 1026, or this part [1024] unless prohibited by Regulation Z or this part.'' Since the 2013 HOEPA Final Rule went into effect, the Bureau has received questions as to whether the list of counseling organizations may be combined with other disclosures besides those required pursuant to Regulations X and Z. Although only disclosures pursuant to Regulations X and Z are specifically referenced in the rule, the Bureau does not consider combining the list of organizations with other mortgage loan disclosures to be a violation of Sec. 1024.20(a), unless otherwise prohibited. As long as the other requirements of Sec. 1024.20(a) are met, and if not otherwise prohibited, combining the list with another disclosure does not violate the rule. III. High-Cost Mortgage Counseling This rule also interprets the Regulation Z Sec. 1026.34(a)(5) pre- loan counseling requirement for high-cost mortgages. Specifically, this rule clarifies the qualifications necessary to provide high-cost mortgage counseling and to provide guidance on the issue of lender participation in the counseling. A. Counseling Qualifications Regulation Z Sec. 1026.34(a)(5)(i) provides that a creditor ``shall not extend a high-cost mortgage to a consumer unless the creditor receives written certification that the consumer has obtained counseling on the advisability of the mortgage from a counselor that is approved to provide such counseling by the Secretary of the U.S. Department of Housing and Urban Development or, if permitted by the Secretary, by a State housing finance authority.'' The Bureau has heard informally that there has been some concern among creditors and counselors regarding both the necessary qualifications for providing high-cost mortgage counseling and what constitutes ``high-cost mortgage counseling.'' Regulation Z comment 34(a)(5)(iv)-1 describes what is necessary for a consumer to have received counseling on the advisability of the high- cost mortgage. The counseling must cover: ``key terms of the mortgage transaction'' as set out in the relevant disclosure (usually the Good Faith Estimate or, after August 1, 2015, the Loan Estimate); ``the consumer's budget, including the consumer's income, assets, financial [[Page 22094]] obligations, and expenses; . . . and the affordability of the mortgage transaction for the consumer.'' The Bureau understands that these topics are currently covered by counseling agencies approved by HUD in providing counseling to prospective borrowers. As stated in the preamble for the 2013 HOEPA Final Rule, ``HUD already requires counselors to analyze the financial situation of their clients and establish a household budget for their clients when providing housing counseling.'' \13\ To the extent that a counselor from a HUD-approved counseling agency covers the matters described in comment 34(a)(5)(iv)-1, the counseling requirement of Sec. 1026.34(a)(5)(i) is met. Unless and until HUD limits the current scope of counseling in some way that would not include elements of the comment, counseling agencies that are already approved by HUD to offer homeownership counseling are also qualified to provide the counseling required for high-cost mortgages, provided such counseling does indeed cover the topics prescribed by comment 34(a)(5)(iv)-1. Further, the Bureau encourages creditors, counselors, and consumers to facilitate provision of the required counseling as early as feasible in the loan application process to help ensure the consumer ultimately makes an informed and considered decision. --------------------------------------------------------------------------- \13\ 78 FR 6931 (Jan. 31, 2013). --------------------------------------------------------------------------- B. Lender Participation The Bureau has also received information that consumers may be receiving high-cost mortgage counseling by telephone in a creditor's office while the creditor is present and listening-in. Such listening in may be objectionable by certain counselors, as it could diminish the quality of counseling. In the 2013 HOEPA Final Rule, the Bureau expressed a desire to implement the counseling requirement in a way that ``ensures that borrowers will receive meaningful counseling, and at the same time that the required counseling can be provided in a manner that minimizes operational challenges.'' \14\ The Bureau added an anti-steering provision to the counseling requirement in Sec. 1026.34(a)(5)(vi) that provides that a creditor ``shall not steer or otherwise direct a consumer to choose a particular counselor or counseling organization for the counseling required. . . .'' \15\ The 2013 HOEPA Final Rule described the rationale behind this provision as ``preserv[ing] counselor independence and prevent[ing] conflicts of interest that may arise. . .''.\16\ --------------------------------------------------------------------------- \14\ 78 FR 6928 (Jan. 31, 2013). \15\ 12 CFR 1026.34(a)(5)(vi). \16\ 78 FR 6933 (Jan. 31, 2013). --------------------------------------------------------------------------- Consistent with the purpose of the high-cost mortgage counseling requirement and with the anti-steering provision at Sec. 1026.34(a)(5)(vi) in particular, the Bureau is issuing this interpretive rule, in part, to clarify that a creditor may be steering, that is directing, if the creditor insists on participating or listening in to a counseling call or session if such behavior results in a consumer's selection of a particular counselor. Under these circumstances, creditors comply with the anti-steering provision if a counselor is allowed to request that the creditor not participate or listen on the call. A counselor also is allowed to request that a creditor participate in a call or a portion of a call. For example, a counselor may request that a creditor participate in part of the counseling session to provide additional information related to the loan. The Bureau believes that counselor independence and impartiality, which the anti-steering provision seeks to preserve, may be adversely affected by a concern that another counselor may be selected or the content of the counseling influenced if the counselor requests that the creditor not listen to the counseling and the creditor does not agree. Counselor independence and impartiality may also be compromised by the knowledge that the creditor is listening-in to the advice given. Moreover, creditor participation in such conversations may influence loan applicants away from a full and frank conversation with an independent and impartial counselor, thus undermining the purpose of the rule. IV. Regulatory Requirements This rule articulates the Bureau's official interpretations of the Bureau's Regulation X and Regulation Z. It is therefore exempt from the APA's notice and comment rulemaking requirements pursuant to 5 U.S.C. 553(b). Because no notice of proposed rulemaking is required, the Regulatory Flexibility Act does not require an initial or final regulatory flexibility analysis. 5 U.S.C. 603(a), 604(a). The Bureau has determined that this rule does not impose any new or revise any existing recordkeeping, reporting, or disclosure requirements on covered entities or members of the public that would be collections of information requiring OMB approval under the Paperwork Reduction Act, 44 U.S.C. 3501, et seq. The RESPA requirements under Regulation X that lenders provide loan applicants with a written list of homeownership counseling organizations in the loan applicants' location are currently approved by OMB and assigned the OMB control number 3170-0025. The related TILA requirements are approved under OMB control number 3170-0023. Generally, the collections of information contained in Regulation X are assigned the OMB control number 3170- 0016, and the collections of information contained in Regulation Z are assigned the OMB control number 3170-0015. Dated: April 15, 2015. Richard Cordray, Director, Bureau of Consumer Financial Protection. [FR Doc. 2015-09244 Filed 4-20-15; 8:45 am] BILLING CODE 4810-AM-P
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HUD API
Data element required for list for each agency HUD field definition Example
field name
Agency name ...................................................... nme .......... Agency name ...................................................... ‘‘Local Counseling Agency’’.
Phone number .................................................... phone1 ..... Phone number .................................................... ‘‘555–555–5555’’.
Street address .................................................... adr1 .......... Street Address .................................................... ‘‘1234 Main Street’’.
Street address continued .................................... adr2 .......... Street Address continued ................................... .
City ...................................................................... city ............ City ...................................................................... ‘‘Anytown’’.
State .................................................................... statecd ...... Code for state in which agency is located ......... ‘‘PA’’.
Zip code .............................................................. zipcd ......... Zip Code ............................................................. ‘‘12345’’.
Website URL ....................................................... weburl ....... Agency Web Site address .................................. ‘‘http://www.counselor.org’’.
Email address ..................................................... email ......... Email address ..................................................... ‘‘counselor@counselor.org’’.
Counseling services provided ............................. Services .... Types of Counseling Services available ............ ‘‘DFC, FBC, FHW, HIC,
HMC, NDW, PLW, PPC,
PPW, RHC’’ 11.
Languages spoken ............................................. languages The languages in which agency provides serv- ‘‘ENG’’.
ices.
Data fields that are populated with counseling intermediaries offers loan combining the list of organizations with
codes not commonly understood by applicants additional housing other mortgage loan disclosures to be a
loan applicants, including the data counseling options, as national violation of § 1024.20(a), unless
fields ‘‘Counseling services provided’’ intermediaries often offer phone otherwise prohibited. As long as the
and ‘‘Languages spoken,’’ should be counseling and online counseling other requirements of § 1024.20(a) are
translated into their definitional services, which are particularly useful met, and if not otherwise prohibited,
meanings, according to the Data to loan applicants in remote areas or combining the list with another
Dictionary,7 to ensure clarity. areas with fewer counseling agencies or disclosure does not violate the rule.
loan applicants who work during
D. Accompanying Information III. High-Cost Mortgage Counseling
normal business hours and require
Lenders comply with Regulation X alternative meeting time options. The This rule also interprets the
§ 1024.20(a)(1) when the following Bureau’s tool will generate lists under Regulation Z § 1026.34(a)(5) pre-loan
language is included: ‘‘The counseling § 1024.20(a)(1)(i) that include this text counseling requirement for high-cost
agencies on this list are approved by the above. By including this information, mortgages. Specifically, this rule
U.S. Department of Housing and Urban lenders generating lists under clarifies the qualifications necessary to
Development (HUD), and they can offer § 1024.20(a)(1)(ii) will comply with provide high-cost mortgage counseling
independent advice about whether a § 1024.20(a)(1). This will ensure that and to provide guidance on the issue of
particular set of mortgage loan terms is information provided under this lender participation in the counseling.
a good fit based on your objectives and provision is consistent with information A. Counseling Qualifications
circumstances, often at little or no cost accompanying lists generated by the
to you. This list shows you several Bureau’s Web site, thus ensuring Regulation Z § 1026.34(a)(5)(i)
approved agencies in your area. You can consistency. provides that a creditor ‘‘shall not
find other approved counseling agencies extend a high-cost mortgage to a
at the Consumer Financial Protection E. Combining the List With Other consumer unless the creditor receives
Bureau’s (CFPB) Web site: Disclosures. written certification that the consumer
consumerfinance.gov/mortgagehelp or Section 5(c) of RESPA does not has obtained counseling on the
by calling 1–855–411–CFPB (2372). You specify whether the written list may be advisability of the mortgage from a
can also access a list of nationwide combined with other disclosures. In the counselor that is approved to provide
HUD-approved counseling 2013 HOEPA Final Rule, the Bureau such counseling by the Secretary of the
intermediaries at http://portal.hud.gov/ noted it did not receive any comments U.S. Department of Housing and Urban
hudportal/HUD?src=/ohc_nint.’’ concerning the ability to combine Development or, if permitted by the
Including information about where disclosures. The Bureau finalized the Secretary, by a State housing finance
loan applicants can gain additional combined disclosure allowance in authority.’’ The Bureau has heard
information is consistent with the § 1024.20(a)(2), which provides that the informally that there has been some
Bureau’s preamble discussion of how it ‘‘list of homeownership counseling concern among creditors and counselors
envisioned implementing the organizations provided under this regarding both the necessary
§ 1024.20(a)(1) list requirement in the section may be combined and provided qualifications for providing high-cost
RESPA Homeownership Counseling with other mortgage loan disclosures mortgage counseling and what
Amendments.12 Giving loan applicants required pursuant to Regulation Z, 12 constitutes ‘‘high-cost mortgage
the link to HUD-approved national CFR part 1026, or this part [1024] unless counseling.’’
prohibited by Regulation Z or this part.’’ Regulation Z comment 34(a)(5)(iv)–1
11 A data dictionary for the Field ‘‘Services’’ can Since the 2013 HOEPA Final Rule describes what is necessary for a
be found at http://data.hud.gov/Housing_ went into effect, the Bureau has consumer to have received counseling
Counselor/getServices, and a data dictionary for received questions as to whether the list on the advisability of the high-cost
‘‘Languages’’ can be found at http://data.hud.gov/
of counseling organizations may be mortgage. The counseling must cover:
tkelley on DSK3SPTVN1PROD with RULES
Housing_Counselor/getLanguages.
12 See 78 FR 6855 (Jan. 31, 2013) (‘‘The Bureau combined with other disclosures ‘‘key terms of the mortgage transaction’’
anticipates the lists generated through its tool will besides those required pursuant to as set out in the relevant disclosure
also include information enabling the consumer to Regulations X and Z. Although only (usually the Good Faith Estimate or,
access the Bureau or HUD list of homeownership
counseling organizations, so that an applicant who
disclosures pursuant to Regulations X after August 1, 2015, the Loan Estimate);
receives the list can obtain information about and Z are specifically referenced in the ‘‘the consumer’s budget, including the
additional counseling organizations if desired.’’). rule, the Bureau does not consider consumer’s income, assets, financial
VerDate Sep<11>2014 16:29 Apr 20, 2015 Jkt 235001 PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 E:\FR\FM\21APR1.SGM 21APR1](https://thefederalregister.org/doc/80_FR_22167/page/3.svg)
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obligations, and expenses; . . . and the and prevent[ing] conflicts of interest loan applicants with a written list of
affordability of the mortgage transaction that may arise. . .’’.16 homeownership counseling
for the consumer.’’ Consistent with the purpose of the organizations in the loan applicants’
The Bureau understands that these high-cost mortgage counseling location are currently approved by OMB
topics are currently covered by requirement and with the anti-steering and assigned the OMB control number
counseling agencies approved by HUD provision at § 1026.34(a)(5)(vi) in 3170–0025. The related TILA
in providing counseling to prospective particular, the Bureau is issuing this requirements are approved under OMB
borrowers. As stated in the preamble for interpretive rule, in part, to clarify that control number 3170–0023. Generally,
the 2013 HOEPA Final Rule, ‘‘HUD a creditor may be steering, that is the collections of information contained
already requires counselors to analyze directing, if the creditor insists on in Regulation X are assigned the OMB
the financial situation of their clients participating or listening in to a control number 3170–0016, and the
and establish a household budget for counseling call or session if such collections of information contained in
their clients when providing housing behavior results in a consumer’s Regulation Z are assigned the OMB
counseling.’’ 13 To the extent that a selection of a particular counselor. control number 3170–0015.
counselor from a HUD-approved Under these circumstances, creditors
Dated: April 15, 2015.
counseling agency covers the matters comply with the anti-steering provision
if a counselor is allowed to request that Richard Cordray,
described in comment 34(a)(5)(iv)–1, the Director, Bureau of Consumer Financial
counseling requirement of the creditor not participate or listen on
the call. A counselor also is allowed to Protection.
§ 1026.34(a)(5)(i) is met. Unless and [FR Doc. 2015–09244 Filed 4–20–15; 8:45 am]
request that a creditor participate in a
until HUD limits the current scope of
call or a portion of a call. For example, BILLING CODE 4810–AM–P
counseling in some way that would not
a counselor may request that a creditor
include elements of the comment,
participate in part of the counseling
counseling agencies that are already
session to provide additional DEPARTMENT OF TRANSPORTATION
approved by HUD to offer
information related to the loan.
homeownership counseling are also The Bureau believes that counselor Federal Aviation Administration
qualified to provide the counseling independence and impartiality, which
required for high-cost mortgages, the anti-steering provision seeks to 14 CFR Part 39
provided such counseling does indeed preserve, may be adversely affected by
cover the topics prescribed by comment a concern that another counselor may be [Docket No. FAA–2014–0528; Directorate
34(a)(5)(iv)–1. Further, the Bureau selected or the content of the counseling Identifier 2014–NM–060–AD; Amendment
encourages creditors, counselors, and 39–18139; AD 2015–08–03]
influenced if the counselor requests that
consumers to facilitate provision of the the creditor not listen to the counseling RIN 2120–AA64
required counseling as early as feasible and the creditor does not agree.
in the loan application process to help Counselor independence and Airworthiness Directives; Bombardier,
ensure the consumer ultimately makes impartiality may also be compromised Inc. Airplanes
an informed and considered decision. by the knowledge that the creditor is
AGENCY: Federal Aviation
B. Lender Participation listening-in to the advice given.
Administration (FAA), Department of
Moreover, creditor participation in such
The Bureau has also received Transportation (DOT).
conversations may influence loan
information that consumers may be applicants away from a full and frank ACTION: Final rule.
receiving high-cost mortgage counseling conversation with an independent and
by telephone in a creditor’s office while SUMMARY: We are adopting a new
impartial counselor, thus undermining airworthiness directive (AD) for certain
the creditor is present and listening-in. the purpose of the rule.
Such listening in may be objectionable Bombardier, Inc. Model DHC–8–400
by certain counselors, as it could IV. Regulatory Requirements series airplanes. This AD was prompted
diminish the quality of counseling. In This rule articulates the Bureau’s by a report that during production, an
the 2013 HOEPA Final Rule, the Bureau official interpretations of the Bureau’s incorrect clevis was used, resulting in
expressed a desire to implement the Regulation X and Regulation Z. It is improper installation onto the alternate
counseling requirement in a way that therefore exempt from the APA’s notice release cable of the main landing gear
‘‘ensures that borrowers will receive and comment rulemaking requirements (MLG). This AD requires a detailed
meaningful counseling, and at the same pursuant to 5 U.S.C. 553(b). visual inspection of the emergency
time that the required counseling can be Because no notice of proposed release clevis of the MLG to determine
provided in a manner that minimizes rulemaking is required, the Regulatory if an incorrect clevis has been installed,
operational challenges.’’ 14 The Bureau Flexibility Act does not require an and if necessary, replacing the clevis
added an anti-steering provision to the initial or final regulatory flexibility with a correct clevis and clevis pin. We
counseling requirement in analysis. 5 U.S.C. 603(a), 604(a). are issuing this AD to detect and correct
§ 1026.34(a)(5)(vi) that provides that a The Bureau has determined that this improper installation of the clevis,
creditor ‘‘shall not steer or otherwise rule does not impose any new or revise which could cause loss of the alternate
direct a consumer to choose a particular any existing recordkeeping, reporting, or release system and prevent the MLG
counselor or counseling organization for disclosure requirements on covered from extending and retracting, and
the counseling required. . . .’’ 15 The entities or members of the public that could consequently affect the airplane’s
2013 HOEPA Final Rule described the would be collections of information continued safe flight and landing.
tkelley on DSK3SPTVN1PROD with RULES
rationale behind this provision as requiring OMB approval under the DATES: This AD becomes effective May
‘‘preserv[ing] counselor independence Paperwork Reduction Act, 44 U.S.C. 26, 2015.
3501, et seq. The RESPA requirements The Director of the Federal Register
13 78 FR 6931 (Jan. 31, 2013). under Regulation X that lenders provide approved the incorporation by reference
14 78 FR 6928 (Jan. 31, 2013). of a certain publication listed in this AD
15 12 CFR 1026.34(a)(5)(vi). 16 78 FR 6933 (Jan. 31, 2013). as of May 26, 2015.
VerDate Sep<11>2014 16:29 Apr 20, 2015 Jkt 235001 PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 E:\FR\FM\21APR1.SGM 21APR1](https://thefederalregister.org/doc/80_FR_22167/page/4.svg)
Document Created: 2015-12-16 08:33:23
Document Modified: 2015-12-16 08:33:23
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule. | |
| Dates | This rule is effective April 21, 2015. | |
| Contact | Rachel Ross, Special Assistant; Nicholas Hluchyj, Senior Counsel; Office of Regulations, Consumer Financial Protection Bureau, 1700 G Street NW., at (202) 435-7700. | |
| FR Citation | 80 FR 22091 | |
| RIN Number | 3170-AA52 | |
| CFR Citation | 12
CFR
1024 12 CFR 1026 |
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