81 FR 51394 - Appraisals for Higher-Priced Mortgage Loans Exemption Threshold
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
FEDERAL RESERVE SYSTEM
BUREAU OF CONSUMER FINANCIAL PROTECTION Federal Register Volume 81, Issue 150 (August 4, 2016)
Office of the Comptroller of the Currency
FEDERAL RESERVE SYSTEM
BUREAU OF CONSUMER FINANCIAL PROTECTION
Federal Register Volume 81, Issue 150 (August 4, 2016)
| Page Range | 51394-51400 | |
| FR Document | 2016-18058 |
[Federal Register Volume 81, Number 150 (Thursday, August 4, 2016)] [Proposed Rules] [Pages 51394-51400] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-18058] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF THE TREASURY Office of the Comptroller of the Currency 12 CFR Part 34 [Docket No. OCC-2015-0021] RIN 1557-AD99 FEDERAL RESERVE SYSTEM 12 CFR Part 226 [Docket No. R-1443] RIN 7100-AD 90 BUREAU OF CONSUMER FINANCIAL PROTECTION 12 CFR Part 1026 [Docket No. CFPB-2016-0035] RIN 3170-AA11 Appraisals for Higher-Priced Mortgage Loans Exemption Threshold AGENCY: Board of Governors of the Federal Reserve System (Board); Bureau of Consumer Financial Protection (Bureau); and Office of the Comptroller of the Currency, Treasury (OCC). ACTION: Proposed rule; request for public comment. ----------------------------------------------------------------------- SUMMARY: The OCC, the Board and the Bureau are publishing proposed rules amending the official interpretations for their regulations that implement section 129H of the Truth in Lending Act (TILA). Section 129H of TILA establishes special appraisal requirements for ``higher-risk mortgages,'' termed ``higher-priced mortgage loans'' or ``HPMLs'' in the agencies' regulations. The OCC, the Board, the Bureau, the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA) and the Federal Housing Finance Agency (FHFA) (collectively, the Agencies) issued joint final rules implementing these requirements, effective January 18, 2014. The Agencies' rules exempted, among other loan types, transactions of $25,000 or less, and required that this loan amount be adjusted annually based on any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). If there is no annual percentage increase in the CPI-W, the OCC, the Board and the Bureau will not adjust this exemption threshold from the prior year. The proposal would memorialize this as well as the agencies' calculation method for determining the adjustment in years following a year in which there is no annual percentage increase in the CPI-W. DATES: Comments must be received on or before September 6, 2016. ADDRESSES: Interested parties are encouraged to submit written comments jointly to the OCC, the Board, and the Bureau. Commenters are encouraged to use the title ``Appraisals for Higher-Priced Mortgage Loans'' to facilitate the organization and distribution of comments among the agencies. Interested parties are invited to submit written comments to: OCC: Because paper mail in the Washington, DC area and at the OCC is subject to delay, commenters are encouraged to submit comments by the Federal eRulemaking Portal or email, if possible. Please use the title ``Appraisals for Higher-Priced Mortgage Loans'' to facilitate the organization and distribution of the comments. You may submit comments by any of the following methods:Federal eRulemaking Portal--``regulations.gov'': Go to http://www.regulations.gov. Enter ``Docket ID OCC-2015-0021'' in the Search box and click ``Search.'' Results can be filtered using the filtering tools on the left side of the screen. Click on ``Comment Now'' to submit public comments. Click on the ``Help'' tab on the Regulations.gov home page to get information on using Regulations.gov, including instructions for submitting public comments. Email: [email protected]. Mail: Legislative and Regulatory Activities Division, 400 7th Street SW., suite 3E-218, mail stop 9W-11, Washington, DC 20219. Hand Delivery/Courier: 400 7th Street SW., suite 3E-218, mail stop 9W-11, Washington, DC 20219. Fax: (571) 465-4326. Instructions: You must include ``OCC'' as the agency name and ``Docket ID OCC-2015-0021'' in your comment. In general, OCC will enter all comments received into the docket and publish them on the Regulations.gov Web site without change, including any business or personal information that you provide such as name and address information, email addresses, or phone numbers. Comments received, including attachments and other supporting materials, are part of the public record and subject to public disclosure. Do not enclose any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure. You may review comments and other related materials that pertain to this notice of proposed rulemaking by any of the following methods: Viewing Comments Electronically: Go to http://www.regulations.gov. Enter ``Docket ID OCC-2015-0021'' in the Search box and click ``Search.'' Comments can be filtered by Agency using the filtering tools on the left side of the screen. Click on the ``Help'' tab on the Regulations.gov home page to get information on using Regulations.gov, including instructions for viewing public comments, viewing other supporting and related materials, and viewing the docket after the close of the comment period. Viewing Comments Personally: You may personally inspect and photocopy comments at the OCC, 400 7th Street SW., Washington, DC. For security reasons, the OCC requires that visitors make an appointment to inspect comments. You may do so by calling (202) 649- 6700 or, for persons who are deaf or hard of hearing, TTY, (202) 649- 5597. Upon arrival, visitors will be required to present valid government-issued photo identification and submit to security screening in order to inspect and photocopy comments. Docket: You may also view or request available background documents and project summaries using the methods described above. Board: You may submit comments, identified by Docket No. R-1443 or RIN 7100 AD-90, by any of the following methods: Agency Web site: http://www.federalreserve.gov. Follow the instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm. Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. Email: [email protected]. Include the docket number in the subject line of the message. Fax: (202) 452-3819 or (202) 452-3102. Mail: Robert deV. Frierson, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue NW., Washington, DC 20551. [[Page 51395]] All public comments will be made available on the Board's Web site at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, unless modified for technical reasons. Accordingly, comments will not be edited to remove any identifying or contact information. Public comments may also be viewed electronically or in paper in Room MP-500 of the Board's Martin Building (20th and C Streets NW.) between 9:00 a.m. and 5:00 p.m. on weekdays. Bureau: You may submit comments, identified by Docket No. CFPB- 2016-0035 or RIN 3170-AA11, by any of the following methods: Email: [email protected]. Include Docket No. CFPB-2016-0035 or RIN 3170-AA11 in the subject line of the email. Electronic: http://www.regulations.gov. Follow the instructions for submitting comments. Mail: Monica Jackson, Office of the Executive Secretary, Consumer Financial Protection Bureau, 1700 G Street NW., Washington, DC 20552. Hand Delivery/Courier: Monica Jackson, Office of the Executive Secretary, Consumer Financial Protection Bureau, 1275 First Street NE., Washington, DC 20002. Instructions: All submissions should include the agency name and docket number or Regulatory Information Number (RIN) for this rulemaking. Because paper mail in the Washington, DC area and at the Bureau is subject to delay, commenters are encouraged to submit comments electronically. In general, all comments received will be posted without change to http://www.regulations.gov. In addition, comments will be available for public inspection and copying at 1275 First Street NE., Washington, DC 20002, on official business days between the hours of 10 a.m. and 5 p.m. eastern time. You can make an appointment to inspect the documents by telephoning (202) 435-7275. All comments, including attachments and other supporting materials, will become part of the public record and subject to public disclosure. Sensitive personal information, such as account numbers or Social Security numbers, should not be included. Comments will not be edited to remove any identifying or contact information. FOR FURTHER INFORMATION CONTACT: OCC: MaryAnn Nash, Counsel, Legislative and Regulatory Affairs Division, (202) 649-6287; for persons who are deaf and hard of hearing TTY, (202) 649-5597. Board: Lorna M. Neill, Senior Counsel, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, at (202) 452-3667; for users of Telecommunications Device for the Deaf (TDD) only, contact (202) 263-4869. Bureau: Shaakira Gold-Ramirez, Paralegal Specialist, Jaclyn Maier, Counsel, Office of Regulations, Consumer Financial Protection Bureau, at (202) 435-7700. SUPPLEMENTARY INFORMATION: I. Background The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) amended the Truth in Lending Act (TILA) to add special appraisal requirements for ``higher-risk mortgages.'' \1\ In January 2013, the Agencies issued a joint final rule implementing these requirements and adopted the term ``higher-priced mortgage loan'' (HPML) instead of ``higher-risk mortgage'' (the January 2013 Final Rule).\2\ In July 2013, the Agencies proposed additional exemptions from the January 2013 Final Rule (the 2013 Supplemental Proposed Rule).\3\ In December 2013, the Agencies issued a supplemental final rule with additional exemptions from the January 2013 Final Rule (the December 2013 Supplemental Final Rule).\4\ Among other exemptions, the Agencies adopted an exemption from the new HPML appraisal rules for transactions of $25,000 or less, to be adjusted annually for inflation. --------------------------------------------------------------------------- \1\ Public Law 111-203 section 1471, 124 Stat. 1376 (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 Bureau's, the OCC's, and the Board'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). --------------------------------------------------------------------------- Section 34.203(b)(2) of subpart G of part 34 of the OCC's regulations, Sec. 226.43(b)(2) of the Board's Regulation Z, and Sec. 1026.35(c)(2)(ii) of the Bureau's Regulation Z, and their accompanying interpretations,\6\ provide that the exemption threshold for smaller loans will be adjusted effective January 1 of each year based on any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) that was in effect on the preceding June 1. Any increase in the threshold amount will be rounded to the nearest $100 increment. For example, if the annual percentage increase in the CPI-W would result in a $950 increase in the threshold amount, the threshold amount will be increased by $1,000. However, if the annual percentage increase in the CPI-W would result in a $949 increase in the threshold amount, the threshold amount will be increased by $900. If there is no annual percentage increase in the CPI-W, the OCC, the Board, and the Bureau will not adjust the threshold amounts from the prior year.\7\ --------------------------------------------------------------------------- \6\ See 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). \7\ See 78 FR 48548, 48565 (Aug. 8, 2013) (``Thus, under the proposal, if the CPI-W decreases in an annual period, the percentage increase would be zero, and the dollar amount threshold for the exemption would not change.''). --------------------------------------------------------------------------- II. Commentary Revision The OCC, the Board and the Bureau are proposing new commentary to memorialize the calculation method used by the agencies each year to adjust the exemption threshold. The new commentary is substantively identical for Sec. 34.203(b)(2) of subpart G of part 34 of the OCC's regulations, Sec. 226.43(b)(2) of the Board's Regulation Z, and Sec. 1026.35(c)(2)(ii) of the Bureau's Regulation Z. For ease of reference, the ``Commentary Revision'' refers only to the section numbers of the commentary that will published in the Bureau's Regulation Z at 12 CFR part 1026, Supplement I. Comment 35(c)(2)(ii)-1 to the Bureau's Regulation Z currently provides the threshold amount in effect during a particular period and details the rules the agencies use for rounding the threshold calculation to the nearest $100 or $1,000 increment, as discussed above in part I, ``Background.'' The OCC, the Board and the Bureau are proposing to revise comment 35(c)(2)(ii)-1 by moving the text regarding the threshold amount that is in effect during a particular period to a new proposed comment 35(c)(2)(ii)-3. The discussion of how the agencies round the threshold calculation would remain in comment 35(c)(2)(ii)-1. Current comments 35(c)(2)(ii)-2 and 35(c)(2)(ii)-3 would be renumbered as proposed comments 35(c)(2)(ii)-5 and 35(c)(2)(ii)-6, respectively. [[Page 51396]] As the Agencies have stated previously,\8\ 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. This position is consistent with the Board's and the Bureau's approach in adjusting the coverage thresholds for the Consumer Leasing Act (CLA) and TILA, based on Section 1100E(b) of the Dodd-Frank Act, which states that the threshold must be adjusted by the ``annual percentage increase'' in the CPI-W (emphasis added). The Board and the Bureau are publishing similar amendments to the commentaries to each of their respective regulations implementing the CLA (Regulation M) and TILA (Regulation Z) elsewhere in the Federal Register.\9\ --------------------------------------------------------------------------- \8\ See 78 FR 48548, 48565 (Aug. 8, 2013) and 80 FR 73943, 73944 (Nov. 27, 2015). \9\ 76 FR 18354, 18355 n.1 (Apr. 4, 2011) (``[A]n annual period of deflation or no inflation would not require a change in the threshold amount.''). --------------------------------------------------------------------------- For the HPML appraisal rule exemption for smaller loans, the OCC, the Board, and the Bureau are proposing to memorialize this concept in proposed comment 35(c)(2)(ii)-2, which would provide that 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. For example, if the threshold in effect from January 1, 2019, through December 31, 2019, is $27,500 and the CPI-W in effect on June 1 of 2019, indicates a 1.1 percent decrease from the CPI-W in effect on June 1, 2018, the threshold in effect for January 1, 2020, through December 31, 2020, will remain $27,500. Proposed comment 35(c)(2)(ii)-2 would further set forth the calculation method the agencies would use in years following a year in which the exemption threshold was not adjusted because there was no increase in the CPI-W from the previous year. Specifically, as set forth under proposed comment 35(c)(2)(ii)-2, for the years after a year in which the threshold did not change because the CPI-W in effect on June 1 decreased from the CPI-W in effect on June 1 of 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 if the decreases and any subsequent increases in the CPI-W had been taken into account. Proposed comment 35(c)(2)(ii)-2.i further states that, if the resulting amount is greater than the current threshold, then the threshold effective January 1 the following year will increase accordingly. For example, assume that the threshold in effect from January 1, 2019, through December 31, 2019, is $27,500 and that, due to a 1.1 percent decrease from the CPI-W in effect on June 1, 2018, to the CPI-W in effect on June 1, 2019, the threshold in effect from January 1, 2020, through December 31, 2020, remains at $27,500. If, however, the threshold had been adjusted downward to reflect the decrease in the CPI-W over that time period, the threshold in effect from January 1, 2020, through December 31, 2020, would have been $27,200. Further assume that the CPI-W in effect on June 1, 2020, increased by 1.6 percent from the CPI-W in effect on June 1, 2019. The calculation for the threshold that will be in effect from January 1, 2021, through December 31, 2021, is based on the impact of a 1.6 percent increase in the CPI-W on $27,200, rather than $27,500, resulting in a 2021 threshold of $27,600. Furthermore, comment 35(c)(2)(ii)-2.ii states that, if the resulting amount calculated 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. To illustrate, assume in the example above that the CPI-W in effect on June 1, 2020, increased by only 0.6 percent from the CPI-W in effect on June 1, 2019. The calculation for the threshold that will be in effect from January 1, 2021, through December 31, 2021, is based on the impact of a 0.6 percent increase in the CPI-W on $27,200. The resulting amount is $27,400, which is lower than $27,500, the threshold in effect from January 1, 2020, through December 31, 2020. Therefore, the threshold in effect from January 1, 2021, through December 31, 2021, will remain $27,500. However, the calculation for the threshold that will be in effect from January 1, 2022, through December 31, 2022, will apply the percentage change in the CPI-W to $27,400, the amount that would have resulted based on the 0.6 percent change from the CPI-W in effect on June 1, 2019, to the CPI-W in effect on June 1, 2020. The agencies request comment on all aspects of the proposed rule. III. Regulatory Analysis Bureau's Dodd-Frank Act Section 1022(b)(2) Analysis In developing this proposal, the Bureau has considered potential benefits, costs, and impacts.\10\ In addition, the Bureau has consulted, or offered to consult with, the prudential regulators, the Securities and Exchange Commission, the Department of Housing and Urban Development, the Federal Housing Finance Agency, the Federal Trade Commission, and the Department of the Treasury, including regarding consistency with any prudential, market, or systemic objectives administered by such agencies. --------------------------------------------------------------------------- \10\ Specifically, section 1022(b)(2)(A) calls for the Bureau to consider the potential benefits and costs of a regulation to consumers and covered persons, including the potential reduction of access by consumers to consumer financial products or services; the impact on depository institutions and credit unions with $10 billion or less in total assets as described in section 1026 of the Act; and the impact on consumers in rural areas. --------------------------------------------------------------------------- The Bureau has chosen to evaluate the benefits, costs and impacts of the proposed commentary against the current state of the world, which takes into account the current regulatory regime. The Bureau is not aware of any significant benefits or costs to consumers or covered persons associated with the proposal relative to the baseline. The OCC, the Board, and the Bureau previously stated that if there is no annual percentage increase in the CPI-W, then the agencies will not adjust the exemption threshold from the prior year.\11\ The proposal memorializes this in official commentary. The proposal also clarifies how the threshold would be calculated for years after a year in which the threshold did not change. The Bureau believes that this clarification memorializes the method that the Bureau would be expected to use: This method holds the threshold fixed until a notional threshold calculated using the Bureau's methodology, but taking into account both decreases and increases in the CPI-W, exceeds the actual threshold. The Bureau requests comment on this point. Thus, the Bureau believes that the proposed rule does not change the regulatory regime relative to the baseline and creates no significant benefits, costs, or impacts. --------------------------------------------------------------------------- \11\ 78 FR 48547, 48565 (Aug. 8, 2013) and 80 FR 73943, 73944 (Nov. 27, 2015). --------------------------------------------------------------------------- The proposed rule will have no unique impact on depository institutions or credit unions with $10 billion or less in assets as described in section 1026(a) of the Dodd-Frank Act or on rural consumers. The Bureau does not expect this final rule to affect consumers' access to credit. Regulatory Flexibility Act OCC: The Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (RFA) requires an agency, in connection with a proposed [[Page 51397]] rule, to prepare an Initial Regulatory Flexibility Analysis describing the impact of the proposed rule on small entities (defined by the Small Business Administration for purposes of the RFA to include banking entities with total assets of $550 million or less) or to certify that the proposed rule would not have a significant economic impact on a substantial number of small entities. As explained in the Commentary Revision section of the preamble, this proposed rule memorializes the calculation method used by the OCC, the Board, and the Bureau each year to adjust the threshold for exemption from the special appraisal requirements for HPMLs and clarifies the agencies' calculation method for determining the adjustment in the years following a year in which there is no annual percentage increase in the CPI-W. The economic impact of this proposed rule on national banks and Federal savings associations, regardless of size, is not expected to be significant. Accordingly, the OCC certifies that the proposed rule would not have a significant economic impact on a substantial number of OCC-supervised small entities. Board: The Regulatory Flexibility Act (RFA) requires an agency to publish an initial regulatory flexibility analysis with a proposed rule or certify that the proposed rule will not have a significant economic impact on a substantial number of small entities.\12\ Based on its analysis, and for the reasons stated below, the Board believes that the rule will not have a significant economic impact on a substantial number of small entities. Nevertheless, the Board is publishing an initial regulatory flexibility analysis and requests public comment on all aspects of its analysis. The Board will, if necessary, conduct a final regulatory flexibility analysis after considering the comments received during the public comment period. --------------------------------------------------------------------------- \12\ See 5 U.S.C. 601 et seq. --------------------------------------------------------------------------- 1. Statement of the need for, and objectives of, the proposed rule. The proposed rule would memorialize the calculation method used by the Board each year to adjust the exemption threshold in accordance with Regulation Z, 12 CFR 226.43(b)(2). 2. Small entities affected by the proposed rule. The Board invites comment on the effect of the proposed rule on small entities. For purposes of the RFA, the Small Business Administration defines small entities to include banking entities with total assets of $550 million or less. Of Board supervised institutions with an asset size of $550 million or less as of March 2016, 223 reported making 5,135 higher- priced mortgage loans in 2015.\13\ --------------------------------------------------------------------------- \13\ Board supervised institutions include State Member Banks, uninsured state branches and agencies of foreign banks. The number of institutions making higher-priced mortgage loans and the number of higher-priced mortgage loans is based on data reported pursuant to the Home Mortgage Disclosure Act (HMDA), 12 U.S.C. 2801 et seq. --------------------------------------------------------------------------- 3. Recordkeeping, reporting, and compliance requirements. The proposed rule would not impose any recordkeeping, reporting, or compliance requirements. 4. Other Federal rules. The Board has not identified any likely duplication, overlap and/or potential conflict between the proposed rule and any Federal rule. 5. Significant alternatives to the proposed revisions. The Board solicits comment on any significant alternatives that would reduce the regulatory burden on small entities associated with this proposed rule. Bureau: The RFA generally requires an agency to conduct an initial regulatory flexibility analysis (IRFA) and a final regulatory flexibility analysis (FRFA) of any rule subject to notice-and-comment rulemaking requirements.\14\ These analyses must ``describe the impact of the proposed rule on small entities''.\15\ An IRFA or FRFA is not required if the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities.\16\ The Bureau also is subject to certain additional procedures under the RFA involving the convening of a panel to consult with small business representatives prior to proposing a rule for which an IRFA is required.\17\ --------------------------------------------------------------------------- \14\ 5 U.S.C. 601 et seq. \15\ Id. at 603(a). For purposes of assessing the impacts of the proposed rule on small entities, ``small entities'' is defined in the RFA to include small businesses, small not-for-profit organizations, and small government jurisdictions. Id. at 601(6). A ``small business'' is determined by application of Small Business Administration regulations and reference to the North American Industry Classification System (NAICS) classifications and size standards. Id. at 601(3). A ``small organization'' is any ``not-for- profit enterprise which is independently owned and operated and is not dominant in its field.'' Id. at 601(4). A ``small governmental jurisdiction'' is the government of a city, county, town, township, village, school district, or special district with a population of less than 50,000. Id. at 601(5). \16\ Id. at 605(b). \17\ Id. at 609. --------------------------------------------------------------------------- An IRFA is not required for this proposal because if adopted it would not have a significant economic impact on a substantial number of small entities. As discussed in the Bureau's Section 1022(b)(2) Analysis above, this proposal does not introduce costs or benefits to covered persons because the proposal seeks only to clarify the method of threshold adjustment which has already been established in previous Agency rules. Therefore this proposed rule would not have a significant impact on small entities. Certification Accordingly, the Bureau Director, by signing below, certifies that this proposal, if adopted, would not have a significant economic impact on a substantial number of small entities. Paperwork Reduction Act In accordance with the Paperwork Reduction Act of 1995,\18\ the agencies reviewed this proposed rule. No collections of information pursuant to the Paperwork Reduction Act are contained in the proposed rule. --------------------------------------------------------------------------- \18\ 44 U.S.C. 3506; 5 CFR 1320. --------------------------------------------------------------------------- Unfunded Mandates Reform Act The OCC has analyzed the notice of proposed rulemaking under the factors set forth in the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1532). Under this analysis, the OCC considered whether the proposed rule 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 (adjusted annually for inflation). The proposed rule memorializes the calculation method used by the OCC, the Board, and the Bureau each year to adjust the threshold for exemption from the special appraisal requirements for HPMLs and clarifies the agencies' calculation method for determining the adjustment in the years following a year in which there is no annual percentage increase in the CPI-W. Because the proposed rule is designed to clarify existing rules, and does not introduce any new requirements, the OCC has determined that it would not result in expenditures by State, local, and Tribal governments or by the private sector, of $100 million or more. Accordingly, the OCC has not prepared a written statement to accompany its proposed rule. List of Subjects 12 CFR Part 34 Appraisal, Appraiser, Banks, Banking, Consumer protection, Credit, Mortgages, National banks, Reporting and recordkeeping requirements, Savings associations, Truth in lending. 12 CFR Part 226 Advertising, Appraisal, Appraiser, Consumer protection, Credit, Federal [[Page 51398]] Reserve System, Mortgages, Reporting and recordkeeping requirements, Truth in lending. 12 CFR Part 1026 Advertising, Appraisal, Appraiser, Banking, Banks, Consumer protection, Credit, Credit unions, Mortgages, National banks, Reporting and recordkeeping requirements, Savings associations, Truth in lending. Department of the Treasury Office of the Comptroller of the Currency Authority and Issuance For the reasons set forth in the preamble, the OCC proposes to amend 12 CFR part 34 as set forth below: PART 34--REAL ESTATE LENDING AND APPRAISALS 0 1. The authority citation for part 34 is revised to read as follows: Authority: 12 U.S.C. 1 et seq., 25b, 29, 93a, 371, 1463, 1464, 1465, 1701j-3, 1828(o), 3331 et seq., 5101 et seq., 5412(b)(2)(B) and 15 U.S.C. 1639h. Subpart G--Appraisals for Higher-Priced Mortgage Loans 0 2. In Appendix C to Subpart G, under Section 34.203--Appraisals for Higher-Priced Mortgage Loans, under paragraph (b)(2): 0 i. Paragraph 1 is revised; 0 ii. Paragraphs 2 and 3 are re-designated as paragraphs 4 and 5, respectively; and 0 iii. Paragraphs 2 and 3 are added. The additions and revisions read as follows: Appendix C to Subpart G--OCC Interpretations * * * * * Section 34.203--Appraisals for Higher-Priced Mortgage Loans * * * * * 34.203(b) Exemptions * * * * * 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 if decreases and any subsequent increases in the CPI-W had been taken into account. i. Net increases. If the resulting amount 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 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. 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 proposes to amend 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, under paragraph 43(b)(2), paragraph 1 is revised, paragraphs 2 and 3 are re-numbered paragraphs 4 and 5, respectively, and new paragraphs 2 and 3 are added, to read as follows: Supplement I to Part 226--Official Staff Interpretations * * * * * Subpart E--Special Rules for Certain Home Mortgage Transactions * * * * * Section 226.43--Appraisals for Higher-Risk Mortgage Loans * * * * * 43(b) Exemptions * * * * * 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 [[Page 51399]] 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 if decreases and any subsequent increases in the CPI-W had been taken into account. i. Net increases. If the resulting amount 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 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. 4. Qualifying for exemption--in general. A transaction is exempt under Sec. 226.43(b)(2) if the creditor makes an extension of credit at consummation that is equal to or below the threshold amount in effect at the time of consummation. 5. Qualifying for exemption--subsequent changes. A transaction does not meet the condition for an exemption under Sec. 226.43(b)(2) merely because it is used to satisfy and replace an existing exempt loan, unless the amount of the new extension of credit is equal to or less than the applicable threshold amount. For example, assume a closed-end loan that qualified for a Sec. 226.43(b)(2) exemption at consummation in year one is refinanced in year ten and that the new loan amount is greater than the threshold amount in effect in year ten. In these circumstances, the creditor must comply with all of the applicable requirements of Sec. 226.43 with respect to the year ten transaction if the original loan is satisfied and replaced by the new loan, unless another exemption from the requirements of Sec. 226.43 applies. See Sec. 226.43(b) and (d)(7). * * * * * Bureau of Consumer Financial Protection Authority and Issuance For the reasons set forth in the preamble, the Bureau proposes to amend 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, under paragraph 35(c)(2)(ii), paragraphs 1 through 3 are revised, and paragraphs 4 and 5 are added, to read as follows: Supplement I to Part 1026--Official Interpretations * * * * * Subpart E--Special Rules for Certain Home Mortgage Transactions * * * * * Section 1026.35--Requirements for Higher-Priced Mortgage Loans * * * * * 35(c) Appraisals * * * * * 35(c)(2) Exemptions * * * * * 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 if decreases and any subsequent increases in the CPI-W had been taken into account. i. Net increases. If the resulting amount 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 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. 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. [[Page 51400]] 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) applies. See Sec. 1026.35(c)(2) and (c)(4)(vii). * * * * * Thomas J. Curry, Comptroller of the Currency. By order of the Board of Governors of the Federal Reserve System, July 19, 2016. Robert deV. Frierson, Secretary of the Board. Dated: July 13, 2016. Richard Cordray, Director, Bureau of Consumer Financial Protection. [FR Doc. 2016-18058 Filed 8-3-16; 8:45 am] BILLING CODE 4810-33-P; 6210-01-P; 4810-AM-P
![51394 Federal Register / Vol. 81, No. 150 / Thursday, August 4, 2016 / Proposed Rules
Done in Washington, DC, this 29th day of Consumer Price Index for Urban Wage numbers. Comments received, including
July 2016. Earners and Clerical Workers (CPI–W). attachments and other supporting
Edward Avalos, If there is no annual percentage increase materials, are part of the public record
Under Secretary for Marketing and Regulatory in the CPI–W, the OCC, the Board and and subject to public disclosure. Do not
Programs. the Bureau will not adjust this enclose any information in your
[FR Doc. 2016–18452 Filed 8–3–16; 8:45 am] exemption threshold from the prior comment or supporting materials that
BILLING CODE 3410–34–P year. The proposal would memorialize you consider confidential or
this as well as the agencies’ calculation inappropriate for public disclosure.
method for determining the adjustment You may review comments and other
DEPARTMENT OF THE TREASURY in years following a year in which there related materials that pertain to this
is no annual percentage increase in the notice of proposed rulemaking by any of
Office of the Comptroller of the CPI–W. the following methods:
Currency DATES: Comments must be received on • Viewing Comments Electronically:
or before September 6, 2016. Go to http://www.regulations.gov. Enter
12 CFR Part 34 ADDRESSES: Interested parties are ‘‘Docket ID OCC–2015–0021’’ in the
encouraged to submit written comments Search box and click ‘‘Search.’’
[Docket No. OCC–2015–0021]
jointly to the OCC, the Board, and the Comments can be filtered by Agency
RIN 1557–AD99 Bureau. Commenters are encouraged to using the filtering tools on the left side
use the title ‘‘Appraisals for Higher- of the screen.
FEDERAL RESERVE SYSTEM Priced Mortgage Loans’’ to facilitate the • Click on the ‘‘Help’’ tab on the
organization and distribution of Regulations.gov home page to get
12 CFR Part 226 comments among the agencies. information on using Regulations.gov,
[Docket No. R–1443] Interested parties are invited to submit including instructions for viewing
written comments to: public comments, viewing other
RIN 7100–AD 90 OCC: Because paper mail in the supporting and related materials, and
Washington, DC area and at the OCC is viewing the docket after the close of the
BUREAU OF CONSUMER FINANCIAL comment period.
subject to delay, commenters are
PROTECTION • Viewing Comments Personally: You
encouraged to submit comments by the
Federal eRulemaking Portal or email, if may personally inspect and photocopy
12 CFR Part 1026 comments at the OCC, 400 7th Street
possible. Please use the title ‘‘Appraisals
[Docket No. CFPB–2016–0035] for Higher-Priced Mortgage Loans’’ to SW., Washington, DC. For security
facilitate the organization and reasons, the OCC requires that visitors
RIN 3170–AA11 make an appointment to inspect
distribution of the comments. You may
submit comments by any of the comments. You may do so by calling
Appraisals for Higher-Priced Mortgage (202) 649–6700 or, for persons who are
Loans Exemption Threshold following methods:
• Federal eRulemaking Portal— deaf or hard of hearing, TTY, (202) 649–
AGENCY: Board of Governors of the ‘‘regulations.gov’’: Go to http:// 5597. Upon arrival, visitors will be
Federal Reserve System (Board); Bureau www.regulations.gov. Enter ‘‘Docket ID required to present valid government-
of Consumer Financial Protection OCC–2015–0021’’ in the Search box and issued photo identification and submit
(Bureau); and Office of the Comptroller click ‘‘Search.’’ Results can be filtered to security screening in order to inspect
of the Currency, Treasury (OCC). using the filtering tools on the left side and photocopy comments.
ACTION: Proposed rule; request for of the screen. Click on ‘‘Comment Now’’ Docket: You may also view or request
public comment. to submit public comments. available background documents and
• Click on the ‘‘Help’’ tab on the project summaries using the methods
SUMMARY: The OCC, the Board and the Regulations.gov home page to get described above.
Bureau are publishing proposed rules information on using Regulations.gov, Board: You may submit comments,
amending the official interpretations for including instructions for submitting identified by Docket No. R–1443 or RIN
their regulations that implement section public comments. 7100 AD–90, by any of the following
129H of the Truth in Lending Act • Email: methods:
(TILA). Section 129H of TILA regs.comments@occ.treas.gov. • Agency Web site: http://
establishes special appraisal • Mail: Legislative and Regulatory www.federalreserve.gov. Follow the
requirements for ‘‘higher-risk Activities Division, 400 7th Street SW., instructions for submitting comments at
mortgages,’’ termed ‘‘higher-priced suite 3E–218, mail stop 9W–11, http://www.federalreserve.gov/
mortgage loans’’ or ‘‘HPMLs’’ in the Washington, DC 20219. generalinfo/foia/ProposedRegs.cfm.
agencies’ regulations. The OCC, the • Hand Delivery/Courier: 400 7th • Federal eRulemaking Portal: http://
Board, the Bureau, the Federal Deposit Street SW., suite 3E–218, mail stop 9W– www.regulations.gov. Follow the
Insurance Corporation (FDIC), the 11, Washington, DC 20219. instructions for submitting comments.
National Credit Union Administration • Fax: (571) 465–4326. • Email:
(NCUA) and the Federal Housing Instructions: You must include regs.comments@federalreserve.gov.
Finance Agency (FHFA) (collectively, ‘‘OCC’’ as the agency name and ‘‘Docket Include the docket number in the
rmajette on DSK2TPTVN1PROD with PROPOSALS
the Agencies) issued joint final rules ID OCC–2015–0021’’ in your comment. subject line of the message.
implementing these requirements, In general, OCC will enter all comments • Fax: (202) 452–3819 or (202) 452–
effective January 18, 2014. The received into the docket and publish 3102.
Agencies’ rules exempted, among other them on the Regulations.gov Web site • Mail: Robert deV. Frierson,
loan types, transactions of $25,000 or without change, including any business Secretary, Board of Governors of the
less, and required that this loan amount or personal information that you Federal Reserve System, 20th Street and
be adjusted annually based on any provide such as name and address Constitution Avenue NW., Washington,
annual percentage increase in the information, email addresses, or phone DC 20551.
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![51396 Federal Register / Vol. 81, No. 150 / Thursday, August 4, 2016 / Proposed Rules
As the Agencies have stated following year will increase benefits, costs, and impacts.10 In
previously,8 if there is no annual accordingly. addition, the Bureau has consulted, or
percentage increase in the CPI–W, the For example, assume that the offered to consult with, the prudential
OCC, the Board, and the Bureau will not threshold in effect from January 1, 2019, regulators, the Securities and Exchange
adjust the exemption threshold from the through December 31, 2019, is $27,500 Commission, the Department of Housing
prior year. This position is consistent and that, due to a 1.1 percent decrease and Urban Development, the Federal
with the Board’s and the Bureau’s from the CPI–W in effect on June 1, Housing Finance Agency, the Federal
approach in adjusting the coverage 2018, to the CPI–W in effect on June 1, Trade Commission, and the Department
thresholds for the Consumer Leasing of the Treasury, including regarding
2019, the threshold in effect from
Act (CLA) and TILA, based on Section consistency with any prudential,
January 1, 2020, through December 31,
1100E(b) of the Dodd-Frank Act, which market, or systemic objectives
2020, remains at $27,500. If, however,
states that the threshold must be administered by such agencies.
the threshold had been adjusted The Bureau has chosen to evaluate the
adjusted by the ‘‘annual percentage downward to reflect the decrease in the
increase’’ in the CPI–W (emphasis benefits, costs and impacts of the
CPI–W over that time period, the proposed commentary against the
added). The Board and the Bureau are threshold in effect from January 1, 2020,
publishing similar amendments to the current state of the world, which takes
through December 31, 2020, would have into account the current regulatory
commentaries to each of their respective
been $27,200. Further assume that the regime. The Bureau is not aware of any
regulations implementing the CLA
CPI–W in effect on June 1, 2020, significant benefits or costs to
(Regulation M) and TILA (Regulation Z)
increased by 1.6 percent from the CPI– consumers or covered persons
elsewhere in the Federal Register.9
W in effect on June 1, 2019. The associated with the proposal relative to
For the HPML appraisal rule
calculation for the threshold that will be the baseline. The OCC, the Board, and
exemption for smaller loans, the OCC,
in effect from January 1, 2021, through the Bureau previously stated that if
the Board, and the Bureau are proposing
December 31, 2021, is based on the there is no annual percentage increase
to memorialize this concept in proposed
impact of a 1.6 percent increase in the in the CPI–W, then the agencies will not
comment 35(c)(2)(ii)–2, which would
CPI–W on $27,200, rather than $27,500, adjust the exemption threshold from the
provide that if the CPI–W in effect on
resulting in a 2021 threshold of $27,600. prior year.11 The proposal memorializes
June 1 does not increase from the CPI–
W in effect on June 1 of the previous Furthermore, comment 35(c)(2)(ii)– this in official commentary. The
year, the threshold amount effective the 2.ii states that, if the resulting amount proposal also clarifies how the
following January 1 through December calculated is equal to or less than the threshold would be calculated for years
31 will not change from the previous current threshold, then the threshold after a year in which the threshold did
year. For example, if the threshold in effective January 1 the following year not change. The Bureau believes that
effect from January 1, 2019, through will not change, but future increases this clarification memorializes the
December 31, 2019, is $27,500 and the will be calculated based on the amount method that the Bureau would be
CPI–W in effect on June 1 of 2019, that would have resulted. To illustrate, expected to use: This method holds the
indicates a 1.1 percent decrease from assume in the example above that the threshold fixed until a notional
the CPI–W in effect on June 1, 2018, the CPI–W in effect on June 1, 2020, threshold calculated using the Bureau’s
threshold in effect for January 1, 2020, increased by only 0.6 percent from the methodology, but taking into account
through December 31, 2020, will remain CPI–W in effect on June 1, 2019. The both decreases and increases in the CPI–
calculation for the threshold that will be W, exceeds the actual threshold. The
$27,500.
in effect from January 1, 2021, through Bureau requests comment on this point.
Proposed comment 35(c)(2)(ii)–2
December 31, 2021, is based on the Thus, the Bureau believes that the
would further set forth the calculation
impact of a 0.6 percent increase in the proposed rule does not change the
method the agencies would use in years
CPI–W on $27,200. The resulting regulatory regime relative to the
following a year in which the exemption
amount is $27,400, which is lower than baseline and creates no significant
threshold was not adjusted because
$27,500, the threshold in effect from benefits, costs, or impacts.
there was no increase in the CPI–W The proposed rule will have no
from the previous year. Specifically, as January 1, 2020, through December 31,
2020. Therefore, the threshold in effect unique impact on depository
set forth under proposed comment institutions or credit unions with $10
35(c)(2)(ii)–2, for the years after a year from January 1, 2021, through December
31, 2021, will remain $27,500. However, billion or less in assets as described in
in which the threshold did not change section 1026(a) of the Dodd-Frank Act
because the CPI–W in effect on June 1 the calculation for the threshold that
will be in effect from January 1, 2022, or on rural consumers. The Bureau does
decreased from the CPI–W in effect on not expect this final rule to affect
June 1 of the previous year, the through December 31, 2022, will apply
the percentage change in the CPI–W to consumers’ access to credit.
threshold is calculated by applying the
annual percentage change in the CPI–W $27,400, the amount that would have Regulatory Flexibility Act
to the dollar amount that would have resulted based on the 0.6 percent change OCC: The Regulatory Flexibility Act,
resulted if the decreases and any from the CPI–W in effect on June 1, 5 U.S.C. 601 et seq. (RFA) requires an
subsequent increases in the CPI–W had 2019, to the CPI–W in effect on June 1, agency, in connection with a proposed
been taken into account. Proposed 2020.
comment 35(c)(2)(ii)–2.i further states The agencies request comment on all 10 Specifically, section 1022(b)(2)(A) calls for the
rmajette on DSK2TPTVN1PROD with PROPOSALS
that, if the resulting amount is greater aspects of the proposed rule. Bureau to consider the potential benefits and costs
than the current threshold, then the of a regulation to consumers and covered persons,
III. Regulatory Analysis including the potential reduction of access by
threshold effective January 1 the consumers to consumer financial products or
Bureau’s Dodd-Frank Act Section services; the impact on depository institutions and
8 See 78 FR 48548, 48565 (Aug. 8, 2013) and 80 credit unions with $10 billion or less in total assets
FR 73943, 73944 (Nov. 27, 2015).
1022(b)(2) Analysis as described in section 1026 of the Act; and the
9 76 FR 18354, 18355 n.1 (Apr. 4, 2011) (‘‘[A]n impact on consumers in rural areas.
annual period of deflation or no inflation would not
In developing this proposal, the 11 78 FR 48547, 48565 (Aug. 8, 2013) and 80 FR
require a change in the threshold amount.’’). Bureau has considered potential 73943, 73944 (Nov. 27, 2015).
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![51400 Federal Register / Vol. 81, No. 150 / Thursday, August 4, 2016 / Proposed Rules
5. Qualifying for exemption— Act) amended the CLA by requiring that comments may also be viewed
subsequent changes. A transaction does the dollar threshold for exempt electronically or in paper in Room MP–
not meet the condition for an exemption consumer credit transactions be 500 of the Board’s Martin Building (20th
under § 1026.35(c)(2)(ii) merely because adjusted annually by the annual and C Streets NW.,) between 9:00 a.m.
it is used to satisfy and replace an percentage increase in the Consumer and 5:00 p.m. on weekdays.
existing exempt loan, unless the amount Price Index for Urban Wage Earners and Bureau: You may submit comments,
of the new extension of credit is equal Clerical Workers (CPI–W). If there is no identified by Docket No. CFPB–2016–
to or less than the applicable threshold annual percentage increase in the CPI– 0036 by any of the following methods:
amount. For example, assume a closed- W, the Board and Bureau will not adjust • Email: FederalRegisterComments@
end loan that qualified for a this exemption threshold from the prior cfpb.gov. Include Docket No. CFPB–
§ 1026.35(c)(2)(ii) exemption at year. The proposal would memorialize 2016–0036 in the subject line of the
consummation in year one is refinanced this as well as the agencies’ calculation email.
in year ten and that the new loan method for determining the adjustment
• Electronic: http://
amount is greater than the threshold in years following a year in which there
www.regulations.gov. Follow the
amount in effect in year ten. In these is no annual percentage increase in the
instructions for submitting comments.
circumstances, the creditor must CPI–W.
comply with all of the applicable Because the Dodd-Frank Act also • Mail: Monica Jackson, Office of the
requirements of § 1026.35(c) with requires similar adjustments in the Executive Secretary, Consumer
respect to the year ten transaction if the Truth in Lending Act’s threshold for Financial Protection Bureau, 1700 G
original loan is satisfied and replaced by exempt consumer credit transactions, Street NW., Washington, DC 20552.
the new loan, unless another exemption the Board and the Bureau are proposing • Hand Delivery/Courier: Monica
from the requirements of § 1026.35(c) similar amendments to the Jackson, Office of the Executive
applies. See § 1026.35(c)(2) and commentaries to each of their respective Secretary, Consumer Financial
(c)(4)(vii). regulations implementing the Truth in Protection Bureau, 1275 First Street NE.,
* * * * * Lending Act elsewhere in the Federal Washington, DC 20002.
Register. Instructions: All submissions should
Thomas J. Curry, include the agency name and docket
Comptroller of the Currency.
DATES: Comments must be received on
or before September 6, 2016. number or Regulatory Information
By order of the Board of Governors of the Number (RIN) for this rulemaking.
Federal Reserve System, July 19, 2016. ADDRESSES: Interested parties are
encouraged to submit written comments Because paper mail in the Washington,
Robert deV. Frierson, DC area and at the Bureau is subject to
jointly to the Board and the Bureau.
Secretary of the Board. delay, commenters are encouraged to
Commenters are encouraged to use the
Dated: July 13, 2016.
title ‘‘Consumer Leasing (Regulation submit comments electronically. In
Richard Cordray, M)’’ to facilitate the organization and general, all comments received will be
Director, Bureau of Consumer Financial distribution of comments among the posted without change to http://
Protection. agencies. Interested parties are invited www.regulations.gov. In addition,
[FR Doc. 2016–18058 Filed 8–3–16; 8:45 am] to submit written comments to: comments will be available for public
BILLING CODE 4810–33–P; 6210–01–P; 4810–AM–P Board: You may submit comments, inspection and copying at 1275 First
identified by Docket No. R–1545 or RIN Street NE., Washington, DC 20002, on
7100 AE–56, by any of the following official business days between the hours
FEDERAL RESERVE SYSTEM methods: of 10 a.m. and 5 p.m. eastern time. You
• Agency Web site: http:// can make an appointment to inspect the
12 CFR Part 213 www.federalreserve.gov. Follow the documents by telephoning (202) 435–
[Docket No. R–1545] instructions for submitting comments at 7275.
http://www.federalreserve.gov/ All comments, including attachments
RIN 7100 AE–56 and other supporting materials, will
generalinfo/foia/ProposedRegs.cfm.
BUREAU OF CONSUMER FINANCIAL • Federal eRulemaking Portal: http:// become part of the public record and
PROTECTION www.regulations.gov. Follow the subject to public disclosure. Sensitive
instructions for submitting comments. personal information, such as account
12 CFR Part 1013 • Email: regs.comments@ numbers or Social Security numbers,
federalreserve.gov. Include the docket should not be included. Comments will
[Docket No. CFPB–2016–0036] number in the subject line of the not be edited to remove any identifying
message. or contact information.
Consumer Leasing (Regulation M) • Fax: (202) 452–3819 or (202) 452– FOR FURTHER INFORMATION CONTACT:
AGENCY: Board of Governors of the 3102. Board: Vivian W. Wong, Senior
Federal Reserve System (Board); and • Mail: Robert deV. Frierson, Counsel, Division of Consumer and
Bureau of Consumer Financial Secretary, Board of Governors of the Community Affairs, Board of Governors
Protection (Bureau). Federal Reserve System, 20th Street and of the Federal Reserve System, at (202)
ACTION: Proposed rule; official Constitution Avenue NW., Washington, 452–3667; for users of
interpretations. DC 20551. Telecommunications Device for the Deaf
rmajette on DSK2TPTVN1PROD with PROPOSALS
All public comments will be made (TDD) only, contact (202) 263–4869.
SUMMARY: The Board and the Bureau are available on the Board’s Web site at
proposing to amend the official http://www.federalreserve.gov/ Bureau: Shaakira Gold-Ramirez,
interpretations and commentary for the generalinfo/foia/ProposedRegs.cfm as Paralegal Specialist, Jaclyn Maier,
agencies’ regulations that implement the submitted, unless modified for technical Counsel, Office of Regulations,
Consumer Leasing Act (CLA). The reasons. Accordingly, comments will Consumer Financial Protection Bureau,
Dodd-Frank Wall Street Reform and not be edited to remove any identifying at (202) 435–7700.
Consumer Protection Act (Dodd-Frank or contact information. Public SUPPLEMENTARY INFORMATION:
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Document Created: 2016-08-04 02:53:25
Document Modified: 2016-08-04 02:53:25
| 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 | Proposed Rules | |
| Action | Proposed rule; request for public comment. | |
| Dates | Comments must be received on or before September 6, 2016. | |
| Contact | OCC: MaryAnn Nash, Counsel, Legislative and Regulatory Affairs Division, (202) 649-6287; for persons who are deaf and hard of hearing TTY, (202) 649-5597. Board: Lorna M. Neill, Senior Counsel, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, at (202) 452-3667; for users of Telecommunications Device for the Deaf (TDD) only, contact (202) 263-4869. | |
| FR Citation | 81 FR 51394 | |
| RIN Number | 1557-AD99 and 3170-AA11 | |
| CFR Citation | 12
CFR
1026 12 CFR 226 12 CFR 34 | |
| CFR Associated | Credit Unions; Advertising; Federal Reserve System; Appraisal; Appraiser; Banks; Banking; Consumer Protection; Credit; Mortgages; National Banks; Reporting and Recordkeeping Requirements; Savings Associations and Truth in Lending |
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