81 FR 8667 - Regulation C Home Mortgage Disclosure

FEDERAL RESERVE SYSTEM

Federal Register Volume 81, Issue 34 (February 22, 2016)

The Board of Governors of the Federal Reserve System (Board) is proposing to repeal its Regulation C, which was issued to implement the Home Mortgage Disclosure Act (HMDA). Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) transferred rulemaking authority for a number of consumer financial protection laws, including HMDA, from the Board to the Bureau of Consumer Financial Protection (Bureau). In December 2011, the Bureau published an interim final rule establishing its own Regulation C to implement HMDA, which substantially duplicated the Board's Regulation C. In October 2015, the Bureau finalized the interim final rule and expanded and revised its Regulation C, pursuant to the Dodd-Frank Act. HMDA requires covered financial institutions to collect and report loan data in connection with residential mortgage applications and loans. Although the Board retains authority to issue some consumer financial protection rules, all rulemaking authority under HMDA concerning mortgage loan transactions was transferred to the Bureau. Accordingly, the Board is proposing to repeal its Regulation C and the Official Staff Commentary that accompanies the regulation.

[Federal Register Volume 81, Number 34 (Monday, February 22, 2016)]
[Proposed Rules]
[Pages 8667-8668]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-03229]


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FEDERAL RESERVE SYSTEM

12 CFR Part 203

[Docket No. R-1532]
RIN 7100 AE-46


Regulation C Home Mortgage Disclosure

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Notice of proposed rulemaking; request for public comment.

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SUMMARY: The Board of Governors of the Federal Reserve System (Board) 
is proposing to repeal its Regulation C, which was issued to implement 
the Home Mortgage Disclosure Act (HMDA). Title X of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act (Dodd-Frank Act) transferred 
rulemaking authority for a number of consumer financial protection 
laws, including HMDA, from the Board to the Bureau of Consumer 
Financial Protection (Bureau). In December 2011, the Bureau published 
an interim final rule establishing its own Regulation C to implement 
HMDA, which substantially duplicated the Board's Regulation C. In 
October 2015, the Bureau finalized the interim final rule and expanded 
and revised its Regulation C, pursuant to the Dodd-Frank Act.
    HMDA requires covered financial institutions to collect and report 
loan data in connection with residential mortgage applications and 
loans. Although the Board retains authority to issue some consumer 
financial protection rules, all rulemaking authority under HMDA 
concerning mortgage loan transactions was transferred to the Bureau. 
Accordingly, the Board is proposing to repeal its Regulation C and the 
Official Staff Commentary that accompanies the regulation.

DATES: Comments must be received on or before April 27, 2016.

ADDRESSES: You may submit comments, identified by Docket No. R-1532 and 
RIN 7100 AE-46, 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.
    All public comments are available from the Board's Web site at 
http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as 
submitted, unless modified for technical reasons. Accordingly, your 
comments will not be edited to remove any identifying or contact 
information. Public comments may also be viewed electronically or in 
paper form 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.

FOR FURTHER INFORMATION CONTACT: Nikita M. Pastor, Counsel, Division of 
Consumer and Community Affairs, at (202) 452-3667, Board of Governors 
of the Federal Reserve System, 20th and C Streets NW., Washington, DC 
20551. For users of Telecommunications Device for the Deaf (TDD) only, 
contact (202) 263-4869.

SUPPLEMENTARY INFORMATION:

I. Background

    The Home Mortgage Disclosure Act (HMDA), 12 U.S.C. 2801 et seq., 
historically was implemented by the Board's Regulation C, published at 
12 CFR part 203. The purpose of the act and regulation is to provide 
the public with sufficient information about mortgage loans to 
determine whether financial institutions are serving the housing credit 
needs of their communities; encourage private investments to areas in 
need; and collect and report applicant and borrower characteristic data 
to identify potential lending discrimination. Accordingly, HMDA 
requires covered financial institutions to report loan data in 
connection with mortgage loan applications.
    Title X of the Dodd-Frank Act transferred rulemaking authority for 
a number of consumer financial protection laws from the Board to the 
Bureau, effective July 21, 2011, with some exceptions. In connection 
with the transfer of the Board's rulemaking authority for HMDA, the 
Bureau published an interim final rule to establish its own Regulation 
C, 12 CFR part 1003, to implement HMDA (Bureau Interim Final Rule).\1\ 
In October 2015, the Bureau finalized its own Regulation C, including 
rules that expand and revise the data collection and reporting regime 
required under HMDA, as amended by the Dodd-Frank Act.\2\
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    \1\ 76 FR 78465 (Dec. 19, 2011).
    \2\ See Home Mortgage Disclosure (Regulation C), 80 FR 66128 
(Oct. 28, 2015).
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    Under Section 1029(a) of the Dodd-Frank Act, the Board generally 
retains authority to issue rules for certain motor vehicle dealers that 
are predominantly engaged in the sale and servicing of motor vehicles, 
the leasing and servicing of motor vehicles, or both. For purposes of 
Section 1029, a ``motor vehicle'' is defined to include, among other 
things, motor homes, recreational vehicle trailers (RVs) and 
recreational boats.\3\ The Dodd-Frank Act also provided several 
exceptions to the Board's rulemaking authority over motor vehicle 
dealers. Specifically, Section 1029(b)(1) of the Dodd-Frank Act 
provides that the Board's rulemaking authority does not apply to any 
motor vehicle dealer to the extent that the motor vehicle dealer 
``provides consumers with any services related to residential or 
commercial mortgages or self-financing transactions involving real 
property.'' \4\ Accordingly, all rulemaking authority under HMDA 
concerning mortgage loan transactions was transferred to the Bureau.
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    \3\ Dodd-Frank Act, Public Law 111-2033, Section 1029(f)(1).
    \4\ Dodd-Frank Act, Public Law 111-2033, Section 1029(b)(1).
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II. Discussion

    HMDA and Regulation C apply to covered financial institutions. For 
this purpose, financial institutions include depository institutions, 
such as a bank, savings institution, or credit union that meet certain 
coverage tests. Financial institutions also include non-depository, 
mortgage lending institutions that have an office in a metropolitan 
statistical area and meet certain asset and home lending thresholds. 
See 12 U.S.C. 2802; 12 CFR 203.2 and 12 CFR 1003.2. Entities that are 
subject to HMDA must collect and report loan data to the appropriate 
federal agency on its housing-related

[[Page 8668]]

loan activities (i.e., mortgage loan applications). HMDA's requirements 
concerning mortgage loans were implemented in Regulation C to apply to 
home purchase loans secured by a dwelling (or refinancings) and home 
improvement loans.\5\
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    \5\ Regulation C covers loans secured by a ``dwelling,'' which 
is defined as any residential structure, whether or not it is 
attached to real property, which would include mobile homes or 
manufactured homes. 12 CFR 1003.2. Under the Bureau's 2015 final 
rule, however, recreational vehicles used as a residence are not 
covered as dwellings for purposes of HMDA. See 80 FR 66128, 66145 
(Oct. 28, 2015).
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    As noted above, the Dodd-Frank Act transferred the Board's 
rulemaking authority under HMDA and other enumerated consumer 
protection laws to the Bureau, but Section 1029 of the Dodd-Frank Act 
also preserved the Board's rulemaking authority over certain motor 
vehicle dealers, with some exceptions. The rulemaking authority 
retained by the Board under Section 1029 does not extend to residential 
or commercial mortgages or self-financing transactions involving real 
property.\6\ Thus, all rulemaking authority under HMDA, which pertains 
only to mortgage loan transactions, was transferred to the Bureau. 
Consequently, the Board is publishing a proposal to repeal the Board's 
Regulation C, 12 CFR part 203.
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    \6\ Section 1029(b)(1) of the Dodd-Frank Act states: Subsection 
(a) shall not apply to any person, to the extent such person (1) 
provides consumers with any services related to residential or 
commercial mortgages or self-financing transaction involving real 
property. . . .'' 12 U.S.C. 5519(b).
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    The Board requests comment on any technical issues raised by the 
proposed repeal of the Board's Regulation C.

III. Initial Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) 
generally requires an agency to perform an assessment of the impact a 
rule is expected to have on small entities. Based on its analysis, and 
for the reasons stated below, the Board believes that this proposed 
rule will not have a significant economic impact on a substantial 
number of small entities. A final regulatory flexibility analysis will 
be conducted after consideration of comments received during the public 
comment period.
    1. Statement of the need for, and objectives of, the proposed rule. 
Title X of the Dodd-Frank Act transferred rulemaking authority for HMDA 
and other enumerated consumer financial protection laws from the Board 
to the Bureau, effective July 21, 2011. In December 2011, the Bureau 
issued an Interim Final Rule to implement HMDA pursuant to the transfer 
of rulemaking authority. Although the Board retains authority to issue 
some consumer financial protection rules, all rulemaking authority 
under HMDA concerning mortgage loan transactions was transferred to the 
Bureau. Consequently, the Board is proposing to repeal the Board's 
Regulation C, 12 CFR part 203.
    2. Small entities affected by the proposed rule. Any entity that is 
currently covered by HMDA is subject to the rules issued by the Bureau, 
located in 12 CFR part 1003. Therefore the Board's repeal of its 
Regulation C would not affect any entity, including small entities.
    3. Recordkeeping, reporting, and compliance requirements. The 
proposed rule would repeal the Board's Regulation C, 12 CFR part 203, 
and would therefore not impose any recordkeeping, reporting, or 
compliance requirements on any entities.
    4. Other federal rules. The Board has not identified any federal 
rules that duplicate, overlap, or conflict with the proposed repeal of 
the Board's Regulation C, 12 CFR part 203.
    5. Significant alternatives to the proposed revisions. The Board is 
not aware of any significant alternatives that would further minimize 
the impact on small entities of the proposed repeal, but solicits 
comment on this approach.

IV. Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act (PRA) of 1995 (44 
U.S.C. 3506; 5 CFR 1320 Appendix A.1), the Board reviewed the rule 
under the authority delegated to the Federal Reserve by the Office of 
Management and Budget (OMB). The proposed rule contains no collections 
of information under the PRA. See 44 U.S.C. 3502(3). Accordingly, there 
is no paperwork burden associated with the proposed rule.

List of Subjects in 12 CFR Part 203

    Banks, Banking, Federal Reserve System, Mortgages, and Reporting 
and recordkeeping requirements.

Authority and Issuance

    For the reasons set forth in the preamble, the Board proposes to 
amend Regulation C, 12 CFR part 203, and the Official Staff Commentary, 
as set forth below:

PART 203--HOME MORTGAGE DISCLOSURE (REGULATION C)

0
1. Part 203 is removed and reserved.

    By order of the Board of Governors of the Federal Reserve 
System, February 11, 2016.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2016-03229 Filed 2-19-16; 8:45 am]
 BILLING CODE P